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Dealer didn't notify me of wheel arch damage when I bought a car - is he liable?

I recently bought an Avensis Tourer from a Toyota dealer and, when cleaning it for the first time, I noticed that the rear nearside wheel arch was dented in several places. It had not been pointed out to me when I test-drove the car. The following Monday 19th March I informed the salesman and said I wanted the wheel arch to be repaired, but he said that was not possible. I contacted the dealer again three months later and they offered me £100 as a goodwill gesture. As a guide, I took the car to another branch of the same dealership and asked for an estimate for repair of the bodywork; they quoted £518 including VAT. I again contacted the dealer who sold the car and gave him the figures, but he would not change the offer of £100. is this reasonable?

Asked on 22 September 2012 by WM, via email

Answered by Honest John
The dealer who sold you the car is 100 per cent liable to repair the car and is actually criminally liable for not telling you about the damage under The Consumer Protection from Unfair Trading Regulations 2008/1378 and The Unfair Commercial Practices Directive 2005/29/EC. You should remind the dealer of this.
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