Hannah Mary Goodlad MSP
Minister for Public Finance
17th June 2026
Dear Minister,
Investigation into Scotland’s used car market
On 28th October 2025, Consumer Scotland launched an investigation into Scotland’s used car market. In line with section 15(2) of the Consumer Scotland Act, which requires us to send a copy of investigation reports to Scottish Ministers, I am pleased to now provide you with our investigation report, “Consumer Challenges in Scotland’s Used Car Sector”.
Our findings and recommendations identify several areas for improvement, with licensing reform a particularly significant step (including both operational and, possibly, legislative steps). On that basis, this letter is also being copied to:
- Neil Gray MSP, Cabinet Secretary for Justice
- Stephen Flynn MSP, Cabinet Secretary for Economy, Tourism and Transport
- Ivan McKee MSP, Cabinet Secretary for Public Service Reform
- Tom Arthur MSP, Minister for Business and Fair Work
We will also be writing to the Conveners of The Public Service Reform Committee, The Economy, Tourism and Transport Committee and The Equalities, Human Rights and Civil Justice Committee.
Background to the investigation
For many households, a used car is essential for work, family, and daily life, in addition to being one of their most financially significant purchases. While most transactions go smoothly, data from Advice Direct Scotland shows persistently high consumer contacts and the UK Government’s Consumer Detriment Survey 2024 ranked second-hand vehicles among the UK’s leading causes of consumer harm.
Collaborative working
Throughout this investigation, we have engaged closely with various consumer, trade, regulatory and enforcement stakeholders. I would like to take this opportunity to specifically highlight our positive engagement with the Civic Government Licensing Task Force, which was highly constructive and whose input was greatly appreciated.
Key findings
The evidence shows that used cars play a central role in many consumers’ lives. Complaints arise most commonly when faults develop after sale - often involving serious mechanical issues – which can create immediate financial and practical pressures.
Consumer rights are strong in principle, but the evidence indicates that they can be difficult to apply in practice. The redress landscape is fragmented and difficult to navigate, with consumers often required to engage with traders, finance providers, warranty providers, ADR bodies, advice organisations or the courts. Some consumers face greater risks of harm when issues arise, particularly those with lower financial resilience or those buying lower
value vehicles.
The evidence also indicates that most consumers, although they research and identify cars online, still view them in person before buying. However, 12% of our survey sample bought their car entirely at a distance and around a third of sampled Advice Direct Scotland used-car cases involved traders based in England. While many traders operate responsibly, this highlights the need for clearer consumer advice and baseline standards for distance and cross-border purchases.
Finally, Scotland’s second-hand vehicle dealer licensing regime is not aligned with the modern market. Although it provides a basic gatekeeping function, it does not consistently support trader competence, awareness of consumer law or effective complaint handling.
More broadly, voluntary Codes of Practice and Trusted Trader schemes can offer additional protection, but their impact depends on coverage and awareness.
Recommendations
Consumer Scotland has made 10 recommendations, grouped under three connected themes: better information, stronger standards and clearer redress. Taken together, they aim to help improve outcomes for consumers while supporting responsible traders.
- Better information: Improving practical guidance for traders and consumers on rights, responsibilities and remedies in used-car sales.
- Clearer redress: Improving access to effective redress, including through
clearer and more accessible ADR. - Stronger standards: Strengthening Scotland’s approach to licensing,
enforcement and self-regulation to better reflect today’s used-car market, including online, distance and cross-border sales
Next steps
The full set of recommendations detail the practical actions needed across advice, guidance, redress, licensing, standards and stakeholder coordination. Please see the appendix for a summary table of these recommendations.
Consumer Scotland will take the appropriate steps to follow up on our recommendations, using our convening role to bring relevant organisations together, support implementation where appropriate, and monitor progress over the short to medium term. We also intend that our findings will inform ongoing policy development and contribute to improving outcomes for consumers.
We would welcome the opportunity to engage further with you and your officials on the findings.
Yours sincerely
Sam Ghibaldan