Raymondo v BMW Finance

[Amethyst]

Raymondo - I've set up a thread for you here


Today I received an invoice from BMW Finance for excessive mileage after VT my vehicle about 5 weeks ago.

I used the template letter on your site and had all damage repaired before the vehicle was collected, it was in immediate condition apart from 18,000 miles above the original agreed limit on the paperwork. So I had a 3 year limit of 30,000 Miles but returned it with 46,000 Miles and as I returned it a few months before the 3 year agreement ended. the pro rated allowance was then reduced to reflect the early VT.

I have not been asked for any repair fees as it was I’m immaculate condition which included 4 alloy reconstructions and the rear bumper scuff had a complete respect and a new windscreen due to a chip in the drivers line of sight.

BMW are stating the excess mileage charge is a pre termination liability and is therefore payable under section 99 (2) of the consumer credit act which states that any pre termination liability is not effected by termination under the voluntary termination provision. They then go on to say please see attached invoice for excessive mileage charges.

I remember saying to the salesman at the time 10,000 Miles per year is quite low as I do between 15,000-20,000 per year and he said don’t worry it’s just an estimate to calculate a buyback price for later it won’t matter. Only it seems to matter now. I feel over the almost 3 years I had the vehicle it was serviced on a regular basis and looked after, I have repaired and replaced any thing under what I see as perfect condition to give it back in immediate condition and feel 46,000 miles over 3 years is not an excessive amount of miles for the age of the vehicle therefore wouldn’t effect its resale.

I’m willing to ignore the letter and let them battle me for the charges but wanted to ask, so far do you think I’m doing the right thing and should I ignore them or reply saying I disagree with their charges and I’m not willing to pay?

Any advice would be most welcome.

I’m not effected by a credit score as I’m in the position I’ve fully purchased my house and have no loans, this was my last car loan as I’ve just purchased my next car outright to prevent this happening again, so I’m not worried if they threat with that side of things.

[Wallace85]

Hi - I am in the same position with them. I have referred my case to the Financial Ombudsman, however, from what I have read they are unlikely to rule in my favour. I have spoken with their collections department and made it clear I am disputing the charges. They are threatening me with penalty interest charges and damage to my credit rating so I am not sure if I should stick to my guns or not.

[Raymondo]

I read on here before starting my VT, excessive mileage was not enforceable in law if it’s not excessive mileage for the average car of the same age, for example BMW allow you 10,000 miles per year but on average we drive 15,000 miles as a nation motorists. Maybe we could get some help on clarifying this from someone in the know?

[R0b]

I read on here before starting my VT, excessive mileage was not enforceable in law

That is my opinion of things and its just that, an opinion. Lenders will of course take a different view to support their arguments. The reason why I say its not enforceable is because the CCA caps your liability at 50% of the total price and the definition of 'total price' does not include compensation or damages for breaching the agreement. Excess mileage is a contractual term which is secondary to the main purpose of the contract i.e. the provision of credit and any breach of the term will usually allow for damages or compensation but the total price definition excludes recovery of that - hence that is why I say it can't be enforced.

However, lenders are now taking the view that excess mileage puts the car in an unreasonable condition and so they can claw back the excess mileage charges. Their claims for excess mileage charges are what are known as 'pure economic losses' which in other words means losses that arise from a negligent act but the act does not cause physical damage i.e. financial losses. The law has been clear for decades in that pure economic losses are not recoverable for negligent acts. Section 100(4) of the CCA says you have to take 'reasonable care of the goods' which implies physical damage to the car, not financial otherwise the duty of care will rise from 'reasonable' to something much higher. Also, if Parliament intended this provision to include economic losses, then it would have included wording along the lines of 'take reasonable care not to cause loss or damage to the goods'.

It's technical legal arguments and all about interpretation of the legal framework, only which a judge can decided on that. The link below is the case where Mercedes took someone to court and lost, I think she was over her mileage by about 10k.

http://legalbeagles.info/forums/foru...larke-pls-help

If you aren't really bothered about your credit history and BMW applying adverse entries, then I would suggest you respond and tell them (politely) where to go but do bear in mind that the markers will last for 6 years and in theory, BMW could keep on reporting those adverse entries until it decides to close the account. Clearly its an abuse of process but someone at some point needs to challenge this and take it to court.

[Raymondo]

Thanks! Rob

I will use the info you have given me and reply (Politely).

Is it worth me inviting them to take this further, if they wish as I will not be paying the unreasonable charges and include the link to the Mercedes case that they lost and use it as a direct comparison.

my wife had an idea of searching for the resale of the car to prove it has not lost value? bearing in mind it was a 15 plate that was in the showroom and was reduced as the 65 plate was out and the car wasn’t registered and only had 10 miles on the clock so 3 years of me driving it and it’s actually 3.5 years and 46,000 miles I’d say that’s low mileage for the age of the car and not an economic loss to them.

[R0b]

I don't think its worth including the link because they will just ignore it anyway. If you really want to mention the case then you could simply keep it short and brief by saying, there has been a recent county court decision where Mercedes lost their case against the hirer for excess mileage where she had exceeded the amount by X miles. The Court found that there was no correlation between the excess mileage and the condition.

There are plenty of car valuation websites that will give you an idea of what the car might be worth based on its condition and mileage e.g. WhatCar, Parkers, AutoTrader etc. most will require you to register first though. Car auctions are obviously going to fetch the lowest value depending on the day but in reality, the excess mileage might be negligible in terms of value and most dealers/private owners will still sell their cars at a usual value or maybe less a couple hundred quid. Unless of course you have a 2 year old car that's done 100,000 miles already, then the value might be somewhat different.

Sure, it's reasonable to say that the mileage of the car might affect its value (perhaps because of wear and tear) but that is only one of the factors to take into account. If the car has been well-looked after, maintained and service in accordance with manufacturer guidelines then its still likely to attract a decent value.

Some might say that age of the vehicle is more important than the mileage and this is subjective depending on the buyer.

[Raymondo]

Rob,
I have just written to BMW to inform them (politely) I will not be making payment for excess mileage, I also told them I will not respond to any more letters therefore don’t send anymore.

can they instruct a debt collector to contact me or does it have to go to court before they can do that?

[R0b]

Rob,
I have just written to BMW to inform them (politely) I will not be making payment for excess mileage, I also told them I will not respond to any more letters therefore don’t send anymore.

can they instruct a debt collector to contact me or does it have to go to court before they can do that?

Yes, they will argue that there is a legitimate interest in doing so. The reality is that they might not bother with debt collectors and instead mark your credit report with adverse entries. The link below might be of interest in relation to BMW and their conduct.

http://legalbeagles.info/forums/foru...excess-mileage

[Raymondo]

Rob,
I received a reply from BMW Financial services a few days ago and they are obviously arguing their side of the case saying When reviewing the CCA 1974, it needs to be taken into account as a whole. In section 100(4) it expands on this and specifically states:
”if the debtor has contravened an obligation to take reasonable care of the goods of land, the ammo but arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly”
they then go on to tell me that by going above my agreed millage allowance by 16,000 miles over 3 years so 46,000 instead of 30,000 (which for a 15 plate car is still classed as low millage) they are saying This has put the vehicle out of good condition.
But the CCA 1974 says to take reasonable care nothing about what good condition is deemed to be. A car in pristine condition with a bit of extra miles on it but still classed as low millage for the year of Male surely can’t be classed as not in good condition?
They then threaten me by stating any payment outstanding for 28 days or more may have a negative impact on your credit file.
do you think I should reply to this or just start to ignore them and let it go to court if that’s what it takes? Like I said before I’m happy to battle them and don’t need a credit score

[Raymondo]

[R0b]

First of all, the duty to take reasonable care (in my opinion) is a lower standard than to keep the car in "good condition". Even if it were classed as being in the same category, you are not liable for wear and tear of the vehicle. The whole purpose of a vehicle is to drive and the more it is driven then vehicle components will wear down over time. If you have had the car serviced at regular intervals and components replaced as and when they are needed then you have discharged that duty to take reasonable care. Exceeding an agreed mileage does not on its own create an automatic presumption that the car's condition is less than reasonable and I presume they have supplied no evidence that you have negligently driven the car?

I can see that Lucy has very selectively referred to Section 173 about adding additional liability. The full text actually says:

(1) A term contained in a regulated agreement or linked transaction, or in any other agreement relating to an actual or prospective regulated agreement or linked transaction, is void if, and to the extent that, it is inconsistent with a provision for the protection of the debtor or hirer or his relative or any surety contained in this Act or in any regulation made under this Act.
(2) Where a provision specifies the duty or liability of the debtor or hirer or his relative or any surety in certain circumstances, a term is inconsistent with that provision if it purports to impose, directly or indirectly, an additional duty or liability on him in those circumstances.

As per my underlining of the above, Section 100(1) is a protective provision that limits the liability to one half of the total price and total price of course has a definition excluding damages or compensation for breach of the agreement - excess mileage is a contractual breach and therefore not recoverable. Equally, the excess mileage clause purports to add additional liability beyond that 50% of the total price and in accordance with 173, that term is void because it is inconsistent with the provisions set out in the CCA i.e. Section 100(1).

For some reason, you can't get through to these people because they all seem to think that the HP contract supersedes the CCA when it doesn't. My view is that if you are going to go nowhere, take it to court but I don't think you can do that until they actually apply a late payment marker. What you could do however, is send a letter before action saying that if they do decide to apply a late payment marker on your credit file post 28 days, you will issue a claim against them without further notice for breach of data protection and breach of the CCA.

[Raymondo]

Rob,
Thank you!

Ill write to them informing them of the above and see what happened next.

im assuming your a solicitor? Do you have contact details/ business card details you can send to me?

[R0b]

Sorry Raymondo, I work in-house for a company so my only client is the company itself - I can’t send you any contact details.

I‘m only here to provide assistance or help from an educational perspective, not to take on anyone’s cases.

[Raymondo]

Thank you for your help,

I do have a family solicitor who I can speak to but in the past he has been reluctant to take on my lesser important cases and referred me to people who seem to also be disinterested.

I’ll keep you informed on how things go

[Raymondo]

R0b,
Iemailed BMW Financial Services as they sent an email informing me they have tried to call but can’t get an answer, (I’ve blocked their number so they won’t)

my email to them was informing them I have sent a letter fully explaining why I will not be paying for the excess mileage and like you suggested I informed them I will take action against them if they put a credit marker on my file for not setteling the excess mileage fees.

BMW Financial Services reply email today is attached, it will be a few days until they receive the letter.