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Dealer is refusing to refund for work done on a faulty van - what are our options?

I recently purchased a used Volkswagen Transporter T5 automatic from a used car dealer. The van came with very little service history and due to its mileage (130,000) we decided to have the timing belt and water pump done. We had noticed a slight noise when parking and asked our local garage to give it a once over. They recommended that we have a specialist automatic gearbox garage check the gearbox, which I arranged and informed the garage purchased from what was occurring. They've confirmed that the van needs a full rebuild at a cost of £3100 + VAT. The garage the van was brought from have said they will not pay for this repair under any warranty and have instead offered to give me my money back plus our old car which we part exchanged. +They will not give any money towards the works we have already undertaken and the garage is not really local to where we live. We want to keep the van and have the gearbox repaired, what are our options?

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Given that you only bought the van last week, the seller is well within their rights to offer you a full refund instead of a repair. I imagine that the dealer is worried that there are other issues with the van and therefore wants to avoid a series of costly repairs. Unless you can prove that the seller promised to replace the cam belt and water pump prior to you collecting the vehicle, you’ll struggle to legally claim the money back for the work you’ve had done by another garage.

You could try and come to an agreement with the seller in regards to a part refund to pay for the gearbox repair. However, given the money involved, I suspect that the dealer simply wants to take the van back in order to fix it at the lowest possible cost or to get rid of it at auction. I'd push for a settlement where the dealer provides some goodwill payment towards the work you've had done. Tell them you will agree to a full refund, but only if they pay some (or all) of the cam belt costs. If they're desperate to get this van back, they might pay this just to settle the matter. For your legal rights, see: www.honestjohn.co.uk/faq/consumer-rights/
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