Automobile retailers are gearing up for the unified car purchase contract effective from January. The new contract clearly states the rights of the customers and dealers' obligations in terms of warranties, after sale service and maintenance, among others.
Officials said the unified contract will help the UAE's automobile sector by making buying and selling activity more transparent, for the benefit of customers.
The Ministry of Economy (MoE) will conduct regular inspections to monitor the correct implementation of the new regulations. Car dealers violating the new rule will be fined, according to Federal Law No 24 for the year 2006, for violating consumer rights. Action will vary from warnings and fines to legal proceedings.
The MoE received 7,000 complaints regarding car purchase contracts in 2011. However, officials expect the disputes between car dealers and consumers to drop by 30 per cent with the implementation of the unified contract.
The unified contract is a set of documents which facilitates sales, service and parts transactions between customers and the car dealers.
The unified contract for sales comprises an invoice (containing the vehicle code, vehicle specifications, colour, engine capacity and check list), warranty provided and a delivery acknowledgment from the customer.
All printed documents should be in both Arabic and English.
A service contract must include a service invoice, regular service check sheet, job cards and customer acknowledgment of the documents.
For a parts contract, there should be an invoice with the service provider's name and address, description of the goods or services provided, sales unit, price in local currency and Arabic enabled documentation.
Al Nabooda Automobiles LLC, dealer for Porsche, Audi and Volkswagen in Dubai and the northern emirates, is one of the first dealers to implement the procedures outlined in the Unified Contracts law.
K. Rajaram, Chief Executive of Al Nabooda Automobiles, said, "The Unified Contracts Law ensures fair play. It brings about transparency and simplifies documentation to aid consumer understanding. Since all contractual obligations are put in black and white, there can be no ambiguity and the rights as well as responsibilities of both the customer and the retailer are made absolutely clear."
According to the new contract, statements such as ‘sold goods will not be replaced' cannot be used. The consumer is entitled to request either the replacement of the vehicle with an equivalent one or a refund the price taking into account conditions of the car, depreciation and usage.
One of the contract conditions is that car dealers are required to make vehicle parts available for five years from the date of first registration.
Hashim Al Nuaimi, Director of the Consumer Protection Department in the Ministry of Economy, said, "The main benefit of the unified contracts is that it will create a sort of balance between the rights of the consumer and traders as well."
"In cases of violations the ministry will issue a warning letter to the car dealer.
"However, if there are repeated violations the violators will be fined."
The new regulations will make the consumers more aware of the products they are going to buy as all details and specifications as well as further guarantees will be mentioned in the new forms.
"This step will eliminate the previous vagueness in the old forms of these contracts and it will clarify the service that car dealers will provide from the date of purchase up to five years further."
The Ministry of Economy urges all consumers to be aware of the terms and conditions of the contracts before giving their signature.
They can report violations to the ministry via the hotline — 600522225.