A new directive is threatening to destabilise the European retail motor industry. It will force dealers to replace or repair cars - or give a refund to customers who are unhappy with their new or used vehicles.

The EU has decided that there should be a uniform method across all industries, the motor trade included, in the way customer complaints are handled - whether the problem is with a car or a pram.

Although this new directive probably won't be in place before June it is forcing dealers to look at the way they handle complaints.

It is making the traditional way of handling customers a thing of the past. No longer can they be dismissed with any excuse.

Problems have to be resolved and not forgotten about. Regardless of what is sold or where, the new directive will oblige dealers to replace or repair the car - or give a full refund. The rules will be the same whether you are in Spain or Germany.

Many feel that this is unfair, especially those selling used goods. Something that has been used is never as good as new, and never will be.

Consumers are a little unsure about their rights at the moment but once the new ruling appears there is no doubt that the purchaser will be in control.

Used car dealers will have to be doubly sure about the vehicles they are buying and pricing will have to be even keener, as anything that needs attention will have to be considered carefully.

Any mistake on the appraisal could prove to be costly. If a fault develops within a six-month period, it will be assumed that it existed at the time of delivery. And if a dispute arises the onus will be on the dealer to prove that it did not. It appears to be another way of getting older cars off the road.

The aim of the new legislation is standardisation of customer guarantees across borders, in recognition of the fact that many customers are sourcing goods throughout the EC.

It is anticipated to strengthen customer confidence in such trade, so perhaps another outcome will be a further boost to dealing across borders.

However I am informed that some problems are emerging in cross-border car dealing which could undermine that confidence.

At the moment a new car can be bought in any European country and provided it is exported there is no VAT payable in the country where it was purchased.

However, VAT should be paid in the importing country within a fixed period. Problems are arising where the importer neglects to make the VAT payment; some unscrupulous traders are selling vehicles on then disappearing or going into liquidation.

As the law stands the supplying dealer is then left with the VAT bill and the end user could also become liable.