Dispute with dealer over consumer rights act

[Mrtugboat]

Hi all – hoping someone here has dealt with something similar and can offer a steer.




I purchased a used Volvo XC90 (2020 model) from Docklands Motor Company on 4th Feb 2024. Within 6 months, a serious fault developed with the ERAD (Electric Rear Axle Drive) system. I’ve been told by Citizens Advice that this falls under the Consumer Rights Act 2015, meaning the dealer is responsible for the repair or refund, as the fault is considered present at the time of sale.




Here’s the situation:

• The fault was confirmed by Volvo.
• The repair cost from Volvo came to £3,977.46.
• A warranty was sold with the car for £1,200, which I paid at point of sale.
• The warranty provider has capped their hourly labour rate at £65/hr, which doesn’t cover Volvo’s actual rate.
• I’ve approached three independent garages (SJB Autotech, Civic, AT-Automotive) – all refused the job, stating it must go to Volvo due to its specialist nature.
• Docklands are refusing to pay the shortfall between the warranty contribution and the actual cost, effectively leaving me to cover the difference – which seems to breach CRA 2015, as I shouldn’t be out of pocket for a fault that arose so soon after purchase. There issue is the labour rate. I’ve tried hard to negotiate this with Volvo.

I’ve shown I’ve tried to keep costs down and resolve this reasonably, but it’s become time-consuming, stressful, and I’m close to issuing a pre-action letter and heading to small claims court.




Would appreciate advice on:

• Wording for a solid final letter before action
• Whether my case sounds strong from a legal point of view
• Any success stories from people in a similar situation – or pitfalls to avoid!

Thanks for reading – would really value any help.

[Pezza54]

Hi Welcome to LB

Under CRA, after 30 days and less than 6 months from the date of delivery of the vehicle, the consumer must give the dealer one chance to repair or relace the vehicle before the consumer can reject it.
The dealer is entitled to deduct for usage (usually based on miles driven in the vehicle) from the refund

Did you provide the dealer with the chance to repair the car? If you did, did he refuse?

Did you realise the warranty wasn't going to cover the full cost of repair before you authorised the repair work? How much is the shortfall in money?

[Mrtugboat]

Thanks so much for your reply.

So, the current state of play is:

No fix yet. This is booked in for the end of the month.

The fault was found when it went into the main Volvo garage for the service. I was given the quote. I spoke to the dealer I got the car from who said they’d look at contributing after warranty had been approved. That was approved.

The remaining balance is what I am disputing. I’ve tried to keep the costs down and I’ve tried independent garages too. The dealer I got the car from won’t do the fix as it’s a hybrid fix and needs a specialist garage - most won’t touch it either. Only Volvo and a few others.

The push back is Volvos hourly rate. It’s 177. The dealer is making out I’m choosing them so it’s my fault and I should pick up the remaining balance. That’s simply not the case, I’ve spoken to other specialists who won’t touch it as it’s a specialist Volvo part.

The shortfall after the warranty with Volvo is approx 2777. I may have another dealer who maybe willing to help but they’ve advised too that although their rates are cheaper, the parts won’t be as they need to get them directly from Volvo. I’m waiting for that quote next week but it’s going to be a similar price.

I just don’t know where I stand. The garage I got the car from hasn’t made any suggestions or recommendations. I’ve been the one trying to find cheaper quotes so they can pay me back at a lower rate.

I’ve already spoken to Citizens Advice and they’ve referred to trading standards. They are not part of the motor ombudsman though.

[Pezza54]

So the amount of labour Volvo have allowed is just less than 25 hours (£2777 /112) 112 being £177 less £65)

Hopefully the dealer you have spoken to will provide a quote with a significantly reduced labour rate, nearer to £65 hour. The shortfall should be a lot less (the warranty only caps the labour at £65/hour, not the parts). The dealer you bought the car from should then be more amenable to funding the reduced shortfall

£177/hour. Do Volvo really charge that much?

[Mrtugboat]

This was the breakdown Volvo provided to me:

breakdown:

Replace ERAD unit & ERAD motor (6.9 – with or without ERAD motor)
High Voltage Battery Disconnection (1.0)
Isolation Testing High Voltage system (0.5)
Calibration with VIDA (0.1)

Labour rate : £177.00 / hour

The full labour cost on the quote was 1504. Parts was 1810. Excluding VAT which was 662.

Does the garage have to accept this repair? The new quote ( if they can do it ) would be similar just at a reduced labour cost plus VAT. I’m guessing it would be more around this as an estimate:

Parts: 1800
labour: 765
VAT: 516
Total: 3078

The shortfall will be around 1900. Would the garage I got the car from have to cover that?

[Pezza54]

Are you saying that if the garage charges £66 per hour labour, the warranty won't cover any labour?
I thought you meant in post 1 that the warranty would cover the labour time capped at £65/hour

[Mrtugboat]

Yes, but the total from the warranty company is 1000 plus VAT. So they’ll pay for 1200. I’d guess that’s a combo of both labour and parts.

so that leaves a short fall of either 2777 or just under 2000 ( both of these include the VAT).

This is where I’m confused the consumer rights act and citizens advice have advised I shouldn’t be out of pocket. So I’m just just trying to work out from a legal standpoint, I’ve managed to get two quotes. One significantly cheaper, should the dealer I got thr car from cover the gap?

the have complained that the labour rates at Volvo are too high ( yes they are ) so I’ve hopefully sourced a cheaper quote. They have said their own cap is 65PH and the garage I’m waiting for a quote form will be 85PH. So even then it’s going to be 20PH more than what they want to pay

[Pezza54]

The average hourly rate for a garage is £76/hour
I am starting to think the warranty was missold - unfit for purpose
You paid £1200 for the warranty and it doesn't cover the average hourly rate

£1200 pounds for a warranty limited to £1k
Please post the warranty terms that limit the cost of repairs

[Mrtugboat]

Sorry Pezza, I think I’m really confusing everything thing.

the Warranty the garage gave me ( part of the deal ) covered any claim up to 1k plus VAT. Obviously, this would be ok for the standard issues but with this one, it’s a pretty big and serious job, hence why the only people willing to do it is Volvo and one Volvo specialist ( maybe!)

The warranty part I’m ok with as they have already approved the 1k fix plus 200 VAT.

its the remaining with the garage I brought the car from. I’m hoping I’m making sense

[Pezza54]

Having read a Volvo owners forum. £3k to £4k only buys an ERAD rebuild. A new ERAD system is in the region of £10k.
As you have only been quoted for a rebuild and the fault could reappear, have you considered rejecting the car?
You reported the fault to the dealer within 6 months
Did the car pass its MOT?
Are you still able to drive it safely?

[Mrtugboat]

So Volvo have said the diagnosis is just on the ERAD repair. The Electric motor is fine, hence why it’s not 8K and only the 3.9k.

The garage passed its MoT just before I took ownership.

I’ve suggested rejecting the car but citizens advice has said that is only after they have failed to repair the car. I have ti allow them to do that.

Their T&Cs stats it’s 1 pound per mile they’ll claim back l. I bright thr car for 22500 and I’ve done 2500 miles.

I was hoping to not have to go down that route and I’d have hoped they’d have just contributed to the fix. It would be less hassle and less time consuming. They’d also need to pay for the fix when they got the car back… which would be at a cost of 4k. So doesn’t make sense to them.

in terms of the repair. Where do I stand? I think it’s reasonable for them to pick up the shortfall?

[Pezza54]

You bought the car in Feb'24
Was the car MOTd in Jan'25?

[Mrtugboat]

26 January 2025 was the date it had its MOT

[Pezza54]

So the car passed its mot with the fault present|?

[Mrtugboat]

I don’t think that would have been something they’d have checked to be fair to them. Volvo found it when they used their diagnosis tool.

So, looking to next week.

option 1)

ask the garage to cover the approx 2000 shortfall after warranty for the repair?

option 2)

right to reject - ask them to refund me the car and they can arrange picked up

option 3)

partial refund?

option 4)

small claims?

is that about right.