Second-hand car sales by independent traders consistently top the list of gripes according to the Citizens Advice consumer helpline.
Consumer and industry groups are being invited to discuss the trend and report back by the spring next year.
Trade bodies say complaints are dealt with quickly by reputable dealers.
Used car buyers are being given purchasing tips and reminded of their rights as part of National Consumer Week, which starts on Monday.
The campaign is aimed at preventing the kind of situation that 22-year-old graduate Natasha Akintunde found herself in.
She bought a used Nissan Micra, with low mileage, for more than £1,000, only for the clutch to fail within weeks.
She said she found out later that the car had been an insurance write-off.
She was given a replacement, but said the brakes failed when her mother was driving it home from the seller.
"It has put me off driving for a while, because of the worry of what happened. I just want my money back, I don't really want to buy another used car," she said.
Buyers are being encouraged to go through a checklist before they buy a second-hand car. Tips include:
- Checking documents such as the MOT certificate, service history and V5 registration document
- Checking the mileage and other history details, using a free online database
- Getting a mechanic to check the technical aspects of the car
Consumer minister Jo Swinson said it was vital, with seven million used cars sold every year , that consumers were "better equipped to make good decisions" when buying cars.
"Rogue dealers are going to find there is action taken against them. They need to shape up, because they are not going to get away with it," she said.
Stuart James, director of the RMI, agreed there were unscrupulous operators in any business, but said many car sellers were reputable and would deal quickly with genuine complaints.
He said many of the calls to Citizens Advice were from people seeking information about their rights, rather than actual complaints about traders.
There are many approved schemes that have independent arbitration if things go wrong.
The RMI has set up the Trust My Garage scheme that ensures members that carry the badge adhere to a code of practice.
There are certain rights that people can fall back on if they discover a problem soon after driving off the forecourt.
Any purchase must be as described by the seller, of satisfactory quality given its age and the price paid, and be roadworthy.
Andy Foster, director of operations and policy at the Trading Standards Institute, said this meant traders should generally offer a repair if something goes wrong within a few weeks, assuming the problem was not pointed out at the time the car was sold.
A replacement or even a refund could be available.
If the problem occurred after a number of months, then the buyer might have to prove that the fault existed at the time of sale in order to get a repair.
However, buyers have fewer rights if they buy the car from a private individual, such as through an internet auction site.
http://www.motorworldarc.co.uk/news.asp
