Hello Ray,
I full accept that dealers may not be happy with the situation, but neither are their customers, If dealer's don't want the risk to their profits for warranty claims, then they shouldn't have started dealing!
It has been the case since SoGA was introduced, so it's nothing new, and their legal advisors should have warned them about such risks as part of their due diligence process when setting up their business.
Some companies (one of whom I worked for) actually took out a claims insurance, which could be called on to help cover unusual events such as product recalls, major customers failing to pay invoices (like Lunar going into administration) and other extraordinary events.
I'm not unsympathetic to the problems these sorts administration events create, but its business out there, and if a party see's a way to mitigate any expenses they will take it! - So why shouldn't customers follow through, who have paid their hard earned money for a product that falls within the remit of their legal rights?
There are a few traders who have a very positive approach to dealing with customers, and they tend to be well respected in their field. Caravan dealers should be prepared to handle the problems with products they sell. It's been within their capability to reject faulty goods back to manufacturer's. They have had the opportunity to insure themselves for events such as Lunars demise. If they then make it extra hard for customers to exercise their legal rights, then shame on them. You can be certain the courts would take a dim view of a seller who obstructs a customer's rights.
As for what criteria are used for the definition of "Not fit for purpose" I do recall a case several years ago where from memory, a relatively new caravan had developed water ingress at one end, and the case went to court becasue the customer wanted a full refund on the basis it was not fit for purpose. The court decided the case was not proved becasue despite the presence of damp in the caravan, the caravan could still be towed and used all be it in a restricted manner. The court direct the caravan should not taken back by the seller for a full refund, but it should be repaired and a calculation was done that subtracted the use the owner had had of the caravans against its repaired market value and a compensation adjustment paid to the customer. The CRA may change some aspects of that solution these days.