§ Mr. Alasdair MorganTo ask the President of the Board of Trade (1) what monitoring she has undertaken of the effectiveness of non-insurance based warranties for motor vehicles; what assessment she has made of the safety implications of such warranties; and if she will make a statement; [31119]
(2) what is her policy on the sale of non-insurance based warranties; and if she will make a statement; [31120]
(3) what assessment she has made of the impact on consumers of an increase in the sale of non-insurance based warranties sold by the provider of the motor vehicle. [31116]
§ Mr. Nigel Griffiths[holding answer 25 February 1998]: The Government's policy on the sale of non-insurance based motor vehicle warranties was set out by the Financial Secretary in her reply of 12 February 1998, Official Report, column 389.
The supply of Goods and Services Act 1982 requires repairs undertaken under warranty to be carried out with reasonable care and skill. If either these implied terms or the specific conditions of the warranty are breached the consumer may look to the seller for redress.
§ Mr. Alasdair MorganTo ask the President of the Board of Trade (1) if she will make a statement on the risks for car purchasers relying solely on non-insurance based motor vehicle warranties if(a) the vehicle seller goes out of business and (b) there is only limited financial backing behind a non-insurance based warranty scheme; [31118]
(2) if she will estimate the number of motor vehicle sellers who have gone out of business in 1997, indicating the number of purchasers who have lost non-insurance based warranties on their vehicles as a result of such business failures. [31117]
§ Mr. Nigel Griffiths:[holding answer 25 February 1998]: During 1997, there were 132 company insolvencies in the motor vehicle retailing and filling station sector in England and Wales. In addition, there 460W were 276 bankruptcies involving non-limited liability companies in this sector. Comparable figures for Scotland are not available.
No figures are available for the number of purchasers who have lost non-insurance based warranties on their vehicles as a result of these failures.
Motor vehicle suppliers offering non-insurance backed warranties are responsible for ensuring that they are properly financed so that they are able to fulfil their obligations to their customers. Consumers for their part need to weigh up the costs and benefits of competing products taking into account among other things the reputation and financial standing of the company offering the warranty.