Use Small Claims to sue them for a full repaint at a cost of up to £10,000. If the dealer that sold you the car is the only previous keeper then he is lying about not being aware of the damage and that is actually an offence. The Sale and Supply of Goods to Consumers Regulations 2002, is derived from EU Directive 1999/44/EU which became Clauses 48A to 48F inclusive of the Sale of Goods act in April 2003. This reverses the burden of proof so that if goods go faulty within six months after purchase it is deemed they were faulty at the time of purchase and the trader has the onus of proving that the item is not defective due to a manufacturing defect. See: www.opsi.gov.uk/si/si2002/20023045.htm

This gives more teeth to the judgement in Bowes v J Richardson & Son. The Consumer Protection from Unfair Trading Regulations May 2008 (CPRs) incorporate The Sale and Supply of Goods to Consumers Regulations 2002 and contain a general prohibition against unfair commercial practices and, in particular prohibitions against misleading actions, misleading omissions and aggressive commercial practices. The Regulations are enforceable through the civil and criminal courts. See These create an offence of misleading omissions which would not previously have been an offence if the consumer had not asked the right questions. So if a salesman knows a car has, for example, been badly damaged and repaired and does not tell the customer, he could later be held liable if the customer subsequently discovered that the car had been damaged and repaired.