Right, that sounds as if he is dealing in the course of his business so you will have terms implied in to the contract by the Sale of Goods Act 1979. If you did not take the vehicle back to the dealer to give him an opportunity to repair the damage then you will not be able to claim the cost of the works carried out by the merc dealer.
If the merc dealer after making the repairs is still telling you that it is in disrepair and you should not drive it then you should get a written statement to that effect from him. Get him to specify fault and if he considers the fault to have been present before you purchased the car.
The law states that up until 6 months after the sale of the vehicle, it's up to the dealer to prove that the fault wasn't there when he sold it to the purchaser. This is called the "Reversed Burden of Proof". They will know this and you can cite it to them if they claim "it's your fault"
If you have bought from a dealer in the course of his business then the Sale of Goods Act 1979 implies certain terms in to your contract with the dealer for the purchase of the car. Go back to them in writing, state that the car is not of a satisfactory quality under s14(2) of Sale of Goods Act 1979 and give them a copy of the mechanics statement. If the mechanic states it is no roadworthy then you can claim it as a repudiatory breach of the above clause, this is a breach of a fundemental term that it does to the root of the contract and denies you the benefit of it thus entitling you terminate the contract/receive and refund. State you are prepared to issue a claim at Court to recover the monies if he does not refund you the money and give him a time limit within which to respond.
State that you wish to deal with them only by way of written correspondence. Keep copies of everything. If they do not respond then you will be forced to issue a claim to recover the monies.
The key though is establishing he sold you it in the course of his business, if he did then you have a claim, if he didn't not then you don't I regret to say.
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