Buying and maintaining a car is a significant investment, so it’s essential to know your rights if something goes wrong. That’s where ADR — Alternative Dispute Resolution — comes in. ADR provides a clear, structured way to resolve disagreements without the time, stress, and cost of going to court. In this article, we’ll explain what ADR is, why it matters in the automotive world, and how you can use it to protect yourself when things don’t go as planned.
What Is ADR and Why It Matters
ADR stands for Alternative Dispute Resolution. It refers to a set of processes designed to settle disputes outside of the court system. In the car industry, ADR plays a crucial role because buying, repairing, and financing vehicles often involves complex agreements. Consumers need a fair and accessible way to seek redress when problems arise.
More importantly, ADR gives buyers confidence. When you know you can escalate a complaint to an impartial body, you’re more comfortable making big decisions. Without ADR, many legitimate issues might never be resolved, leaving consumers frustrated and financially exposed.
ADR in the Motor Retail Sector
In the motor retail sector, ADR can feel complicated at first. However, once you understand the main providers and their roles, the process becomes much clearer. Generally, two key organisations handle complaints depending on the nature of the issue:
- The Motor Ombudsman (TMO) – a voluntary ADR scheme that deals with complaints about vehicle sales, MOTs, repairs, warranties, and servicing.
- The Financial Ombudsman Service (FOS) – a statutory ADR provider that covers complaints involving car finance, leasing, and financial products.
If your complaint involves finance or leasing, the FOS usually has jurisdiction. However, if you bought a vehicle outright, the TMO may be the right path, provided the retailer is accredited.
TMO vs FOS: Key Differences
Understanding the difference between TMO and FOS helps you choose the right path when you have a problem:
| Feature | TMO | FOS |
|---|---|---|
| Voluntary or statutory | Voluntary (retailer must sign up) | Statutory (mandated by law) |
| Scope | Sales, servicing, repairs, warranties | Finance, leasing, plus vehicle quality issues |
| Power to enforce | No direct legal powers, but can withdraw accreditation | Can require compensation and enforce some decisions |
Although the TMO doesn’t have legal enforcement powers, it can still make things difficult for bad retailers by revoking accreditation and naming them publicly. Meanwhile, the FOS has stronger authority and can compel financial compensation in some cases. Therefore, understanding both routes gives you more control over how you resolve your issue.
How to Use ADR When You Face a Problem
If you encounter a problem with a car purchase, service, or finance agreement, ADR can be a powerful tool. Here’s a step-by-step approach:
- Contact the retailer first.
Start by explaining your issue clearly and in writing. Give the retailer the opportunity to resolve the matter. Usually, they have up to eight weeks to respond. - Escalate to an ADR provider.
If the retailer fails to act or their response isn’t satisfactory, escalate the complaint.- If the retailer is TMO-accredited, you can take your case to TMO.
- If your situation involves finance or leasing, you can go to the FOS after the retailer’s response period ends.
- Choose the fastest, most suitable route.
The TMO may handle vehicle quality complaints more quickly, but the FOS has stronger legal powers. Choosing the right provider can save you time and improve your chances of success. - Check trade body schemes.
If your case doesn’t fit the standard routes, look at other schemes. For example, the Finance & Leasing Association’s Business Finance Code or the BVRLA’s ADR scheme might apply depending on your agreement.
By following these steps, you can keep control of the process and increase the likelihood of a fair outcome.
How to Choose a Reputable Car Retailer
While ADR is an excellent safety net, prevention is even better. Choosing the right retailer can significantly reduce the chance of problems later. Here are key things to look for:
- TMO Accreditation – If the retailer is TMO-accredited, you’ll have access to impartial mediation if needed.
- SAF Approved Status – For finance deals, this shows that staff have passed recognised competence tests on how to sell motor finance.
- Online Reputation – Check Trustpilot, Feefo, and other review sites. Look for patterns in customer complaints.
- EV Approved Certification – For electric vehicles, this ensures the retailer has the necessary training.
- Word of Mouth – Ask friends and family for recommendations, especially if they’ve resolved issues successfully.
- Vehicle Provenance Checks – Always run a trusted car history check, such as through Total Car Check, unless the retailer provides a full independent report.
These steps don’t guarantee perfection, but they greatly reduce your risk and give you more leverage if something goes wrong.
Final Thoughts
ADR might sound technical, but it’s actually a straightforward way to protect yourself when buying or financing a car. By understanding how ADR works, knowing which provider to approach, and choosing reputable retailers, you can make the car-buying process safer and less stressful. If a dispute arises, ADR gives you a structured path to resolution without heading straight to court — saving time, money, and unnecessary hassle.
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