Damage Charges After Voluntary Termination

[SarahMS]

Hello,

Sorry if this has been posted many times before but I just wanted to put my story out to see if I could get some help.

On Friday 2nd November my car was taken to Manheim by my step father as I had paid up to the 50% mark and wanted to hand it back. My step father took it as I was on holiday at the time and the finance company and Manheim were aware that it was not myself bringing the car in and they were ok with that. When he dropped it off it wasn't inspected straight away and he was given a slip that ticked that the V5, Service book, Spare Key etc had been dropped off. At the bottom of the slip it says 'Customer has been made aware that damages have not yet been assessed and will be to follow'.

A couple of weeks later I received a letter from the finance company stating that I owe them over £900 worth of damages. I was absolutely shocked and appalled by this. The car was taken back in more than reasonable condition. The car is coming up to 9 years old so to expect no signs of slight wear and tear is ridiculous. They sent a sheet to me which follows the guidelines of how they have come to this which I feel is way off. The letter also states that the car has now been sold at auction so they are wanting to collect costs they they have lost.

My point here is that for one I don't agree with the damages they are stating. Also, is it legal to even sell a car and then send me a bill without even giving me the opportunity to rectify them if I did agree with it? I purchased the car from a local dealership, obviously secondhand. How can they prove that these ridiculous 'damages' were not already on the car beforehand?

The damages they are talking about are things like a slight scuff on one of the plastic wheel trips, a few chips in the paint towards the bottom which more than likely has come from stones.

I'm wondering if anyone could give me any help at all as I'm going out of my mind over it?

Many thanks.

[R0b]

Hi Sarahms,

Can you tell us who the finance company is so that we can establish who you are dealing with?

I would think based on a car being around 9 years old and having had multiple owners, I doubt that the finance co. will be able to get anything near the £900 they are seeking to recover. Just because the car sold less at auction does not mean there is an automatic right to collect the difference between what was estimated and what it was sold for, nor does it mean that there is a presumption the car was returned in an unreasonable condition.

There seems to be a general practice/arrangement in place between finance companies and Manheim where any damage should be recorded (regardless of who caused the damage) and the cost of repair to put the car in a condition as if it were looking like new.

You are only liable for damage caused whilst in your possession and it is up to the finance co. to prove it happened whilst on your watch. No proof, no costs.

[SarahMS]

Hi Rob,

Many thank you for your reply.

The finance company is Specialist Motor Finance, There was a bit of an accident in the car and it was completely fixed and none of the damages they are saying there is are in relation to that. I now need to reply to the company but unsure on what to say/how to say it/how to approach them. Do you have any advice at all?

Thanks again,
Sarah

[SarahMS]

Hi Rob, just wondering if you have any information that could help me at all?
many thanks
sarah

[R0b]

You only have to take reasonable care of the car so if there was an accident and the damage was repaired, then unless it is blatantly obvious that the work was shoddy or poor, you would have discharged that duty.

There are some more recent examples on the forum about damages especially for a car that is 9 years old but I can't seem to find them. All I can suggest that you draft something yourself and post it up on here. There is a template letter for vehicle damage but you will probably need to expand on it.

At the end of the day, the onus is on Specialist Motor Finance to prove that the damage they are claiming was caused whilst in your possession, which is probably going to be difficult given the age of the vehicle and previous owners.

If you want feedback on your letter, post it up and I'll add any comments.

[SarahMS]

Hi Rob,

Sorry for the late reply. I am trying to find a template letter for this but I am struggling to find it on the site - could you copy me the link at all?

Thank you.

[SarahMS]

Hi Rob I managed to find one. Please could you comment on the below draft and see if you think that it sounds ok?

I am writing to you with reference to the above matter and your letter dated 16^th November 2018 concerning the charges raised for damage you alleged state was caused whilst the vehicle was in my possession.

The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore I do not accept liability for the sum of £969.14 that you are claiming to be owed. I would refer you to the Court of Appeal case Brady v St. Margaret's Trust [1963] 3 W.L.R 1162 which was concerned with the extent of a hirer's duty to take reasonable care of the vehicle. On that point, Lord Denning stated the following:

"There should be evidence by the hire-purchase company to show the condition of the goods at the time the agreement was made and to show how far the hirer has defaulted under it. As I read this clause, the hirer's duty is to keep the car in the condition in which it might reasonably be expected to be if he had looked after it properly. He need not put it in a better condition than it was when he hired it. He need only keep it in the condition in which a reasonably minded hirer would keep it. Thus he would repair it if there was an accident, and he would do the immediate repairs in the course of running the car, but no more. The hire-purchase company should give evidence of any default on his part in that duty."

Therefore, the onus is on you to prove that the damage to the vehicle was specifically caused by me during the time that I had it. Given that the vehicle is 8 years old and has had several owners, I am astounded that you seem to be suggesting that all of the damage listed on the condition report occurred during the period of hire. Photographic evidence was taken prior to the vehicle being collected and it was regularly serviced in accordance with the manufacturer's guidelines and the agent who collected the vehicle commented in particular that the vehicle was in good condition given the age and mileage of it.

Furthermore, the condition report issued by Manheim does not prove that the damage was sustained during the period of time that it was in my possession, rather it simply lists the damage. There is no evidence to suggest that the damage had occurred whilst it was in my custody and I would repeat what I mentioned above in that the vehicle is 8 years old and has had several owners and therefore I require you to provide me with your evidence to back up your claim. I am confident, however, the evidence is non-existent because the damage was already there when I received it and therefore your claim for damages is entirely hopeless.

Notwithstanding the above, I am prepared to pay a reasonable sum of £75.00 in full and final settlement all claims in connection with this agreement. The offer will remain open for a period of 14 days but if I have not heard from you by 28^th January 2019, then the offer will automatically expire. Please note that this is a one time offer only and in the event that offer is not accepted, no further offers will be made.

I look forward to hearing from you in due course.

Yours faithfully,




Thank you.

[R0b]

I'll take a look and let you know my feedback.

[SarahMS]

Thank you Rob, much appreciated.

[R0b]

Morning, the draft looks fine to me but you might want to consider incorporating the suggested wording below. If you google CAP HPI Vehicle Conditions you should find a PDF version of those standards. If you are struggling let me know and I will upload a copy for you.

Also note the Brady quote, I have added one sentence at the very beginning regarding the price of the vehicle is not a guide to the condition of the car. Lenders like to argue the car was undersold at auction which shows the car wasn't in a reasonable condition but that is nonsense. Cars sold at auction are unlikely to fetch the highest price so if the lender chooses to auction it, then they also take the risk knowing it ain't going to get the best return.

--------------------------------------------


The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore I do not accept liability for the sum of £969.14 that you are claiming to be owed and there are two further points I would like to make in support of this position.

First, I note that the vehicle has been appraised using the BVRLA Fair Wear and Tear Standard ("BVRLA Standards"). I have consulted those standards and I do not believe that they are most appropriate given the circumstances. It is generally accepted that a vehicle will, over a prolonged period of time, sustain some damage in addition to reasonable wear and tear. It is unreasonable to expect the vehicle to be kept in 'mint' condition throughout the hire period. In my view, this is what the BVRLA Standards do and fail to take into account the the fact that a vehicle is likely to endure more damage the older it becomes. For example, the same BVRLA Standards will be applied to a vehicle that is nearly new as well as a vehicle that might be five or six years old.

Unlike the BVRLA Standards, The CAP HPI Vehicle Conditions ("CAP Conditions") accepts that you would not expect older vehicles will to be in the same condition as those which are newer. The CAP Conditions therefore adjusts the parameters of what is an acceptable standard according the the age of the vehicle. For these reasons, I consider the CAP Conditions to be a more appropriate method of determining whether a vehicle has been returned in a reasonable condition.

As you will be aware, I took possession of the vehicle when it was [brand new or X years old] and it is now [X years old].[I am not the first user of the vehicle] [and I should also point out that the vehicle is as a family car so I think it is fair to factor that this in too.] I have applied the damage raised in the condition report against the the CAP Conditions and have found that the vehicle would fall into the [Clean / Average] category. On this basis, I believe that the vehicle was returned to you in a reasonable condition.

Second, I would refer you to the Court of Appeal case of Brady v St. Margaret's Trust [1963] 3 W.L.R 1162. The case concerned a hire-purchase agreement that was terminated by the owners and was allegedly returned in a damaged condition. The court considered the meaning of a contractual term "good order, repair and condition" and in light of that term, the extent of the hirer's duty to take care of the vehicle. On that point, the court made the following remarks:

"The price in these hire-purchase agreements is no guide to the condition of a car. There should be evidence by the hire-purchase company to show the condition of the goods at the time the agreement was made and to show how far the hirer has defaulted under it. As I read this clause, the hirer's duty is to keep the car in the condition in which it might reasonably be expected to be if he had looked after it properly. He need not put it in a better condition than it was when he hired it. He need only keep it in the condition in which a reasonably minded hirer would keep it. Thus he would repair it if there was an accident, and he would do the immediate repairs in the course of running the car, but no more. The hire-purchase company should give evidence of any default on his part in that duty."

[SarahMS]

Hi Rob many thanks for the reply. Just to double check as I haven't mentioned it in any other messages, they have appraised the vehicle against the CAP price guide for a clean vehicle. Will this make any difference at all where you mention about CAP being more appropriate? If needed I can upload a image of the letter sent. Thank you.

[R0b]

In which case you can omit the references to BVRLA. For a car to be in a reasonable (not good) condition, I would say that the car has to meet the average category. If it does, then I would say it's been returned in a reasonable condition. For a car to be held in the clean category, I would say that it would be in a better than average condition which in other words, you are likely to fetch the best price possible.

I would question why they have appraised the vehicle against the clean category and not the average one when the car need only be returned in a reasonable condition. Why do they think the clean category is considered to be the reasonable condition standard? If the car has had previous owners then it is also unreasonable to suggest that the clean category is appropriate because it's more likely than not that some of the damage will have been attributed to those drivers, which you should not be penalised for.

Think of the categories like this: Clean (good condition), Average (reasonable condition), Below (poor condition)

[SarahMS]

Hi Rob, I have factored your points in the letter below. How would you suggest to end the letter?


Thank you


I am writing to you with reference to the above matter and your letter dated 16^th November 2018 concerning the charges raised for damage you alleged state was caused whilst the vehicle was in my possession.

The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore I do not accept liability for the sum of £969.14 that you are claiming to be owed and there are two further points I would like to make in support of this position.

As you will be aware, I took possession of the vehicle when it was 7 years old and it is now 8 years old. I am not the first user of the vehicle and I should also point out that the vehicle is as a family car so I think it is fair to factor that this in too. I would like to question why the car has been appraised against the clean category and not average when the car need only be returned in a reasonable condition. Why do you think the clean category is considered to be reasonable condition standard? The car has had previous owners so it is also unreasonable to suggest that the clean category is appropriate because it’s more likely than not that some of the alleged damaged will have been attributed to by those drivers which I should not be penalised for.
I have applied the damage raised in the condition report against the CAP Conditions and have found that the vehicle would fall into the average category. On this basis, I believe that the vehicle was returned to you in a reasonable condition.

Second, I would refer you to the Court of Appeal case of Brady v St. Margaret's Trust [1963] 3 W.L.R 1162. The case concerned a hire-purchase agreement that was terminated by the owners and was allegedly returned in a damaged condition. The court considered the meaning of a contractual term "good order, repair and condition" and in light of that term, the extent of the hirer's duty to take care of the vehicle. On that point, the court made the following remarks:

"The price in these hire-purchase agreements is no guide to the condition of a car. There should be evidence by the hire-purchase company to show the condition of the goods at the time the agreement was made and to show how far the hirer has defaulted under it. As I read this clause, the hirer's duty is to keep the car in the condition in which it might reasonably be expected to be if he had looked after it properly. He need not put it in a better condition than it was when he hired it. He need only keep it in the condition in which a reasonably minded hirer would keep it. Thus he would repair it if there was an accident, and he would do the immediate repairs in the course of running the car, but no more. The hire-purchase company should give evidence of any default on his part in that duty."

[R0b]

Couple of minor points below other than that it looks fine to me. Also, just to be clear the references I made in square brackets i.e. the family part are optional so only need to include them if they are relevant.

that you are claiming to be owed and there are two further points I would like to make in support of this position.

You could probably take the 'and' out and replace it with a full stop.

so I think it is fair to factor that this in too

Remove the word in red.

Please can you explain, with sufficient details, why you consider 'clean' category to be the standard for reasonable condition and not the 'average' category?

Suggested amendment to replace the current sentence.

[Aukey]

As things stand at the moment, i do have a pdf of this but hope this makes some sort of sense. Smart repair if anyone reading isn't aware is when you get the damaged area fixed and gets put back to good as new without having to paint the whole panel etc. All number 2 are clean condition, all 3's average condition and all 4's below average.

Cap hpi Vehicle Condition Standards

1. Age
2. Clean
3. Average
4. Below average

1. 0-12m

2. Maximum of 1 area/panel requiring SMART repair to any part of the vehicle including alloy wheel/glass.

3. Maximum of 2 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 panel that requires minor bodywork repair.

4. More than 2 areas/panels requiring SMART repairs. More than 1 panel requiring minor bodywork repair. Any major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1. 1-2yrs

2. Maximum of 2 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass.

3. Maximum of 3 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 panel that requires minor bodywork repair.

4. More than 3 areas/panels requiring SMART repairs. More than 1 panel requiring minor bodywork repair. Any major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1.2-3yrs

2. Maximum of 3 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass.

3. Maximum of 4 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 panel that
requires minor bodywork repair.

4. More than 4 areas/panels requiring SMART repairs. More than 1 panel requiring minor bodywork repair. Any major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1. 3-4yrs

2. Maximum of 4 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass.

3. Maximum of 5 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 panel that requires minor bodywork repair.

4. More than 5 areas/panels requiring SMART repairs. More than 1 panel requiring minor bodywork repair. Any major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1. 4-5yrs

2. Maximum of 4 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 minor bodyshop repair to an individual area/panel.

3. Maximum of 5 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 2-3 panels that require minor bodywork repair. 1 major bodywork repair required.

4. More than 5 areas/panels requiring SMART repairs. More than 3 panels requiring minor bodywork repair. More than 1 major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1. 5-6yrs

2. Maximum of 5 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 minor bodyshop repair to an individual panel or bumper.

3. Maximum of 6 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 2-3 panels that require minor bodywork repair. 1 major bodywork repair required.

4. More than 6 areas/panels requiring SMART repairs. More than 3 panels requiring minor bodywork repair. More than 1 major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1. 6-7yrs

2.Maximum of 6 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 minor bodyshop repair to an individual panel or bumper.

3.Maximum of 7 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 2-3 panels that require minor bodywork repair. 1 major bodywork repair required.

4.More than 7 areas/panels requiring SMART repairs. More than 3 panels requiring minor bodywork repair. More than 1 major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1. 7-8yrs

2. Maximum of 6 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 minor bodyshop repair to an individual panel or bumper.

3. Maximum of 7 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 2-3 panels that require minor bodywork repair. 1 major bodywork repair required.

4. More than 7 areas/panels requiring SMART repairs. More than 3 panels requiring minor bodywork repair. More than 1 major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1. 8-9yrs

2. Maximum of 7 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 minor bodyshop repair to an individual area/panel.

3. Maximum of 8 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 2-5 panels that require minor bodywork repair. 1 major bodywork repair required.

4. More than 8 areas/panels requiring SMART repairs. More than 5 panels requiring minor bodywork repair. More than 1 major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1.9-10yrs

2. Maximum of 7 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 minor bodyshop repair to an individual area/panel.

3. Maximum of 8 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 2-5 panels that require minor bodywork repair. 1 major bodywork repair required.

4. More than 8 areas/panels requiring SMART repairs. More than 5 panels requiring minor bodywork repair. More than 1 major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1.10+yrs

2. Maximum of 7 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 1 minor bodyshop repair to an individual area/panel.

3. Maximum of 8 areas/panels requiring SMART repairs to any part of the vehicle including alloy wheel/glass. 2-5 panels that require minor bodywork repair. 1 major bodywork repair required.

4. More than 8 areas/panels requiring SMART repairs. More than 5 panels requiring minor bodywork repair. More than 1 major bodywork repair required. Any poor previous repairs recorded. Any major alloy wheel refurbishment required.

1. All Ages (interior)

2. No visible damage to interior trim, carpets not stained beyond repair.

3. Small areas of damage requiring minor cosmetic repair.

4. Damage beyond reasonable repair.

1. All Ages (loose items)

2. V5 Present, service book fully stamped, no mileage discrepency, all loose items present, including spare keys.

3. V5 Present, service book partially stamped, no mileage discrepency, spare key present, may have minor, low-value loose items missing.

4. V5 missing, service book partially or not stamped, mileage discrepency, key missing, other items may be missing.

1. All Ages (Tyres)

2. Maximum of 1 tyre requires replacing

3. 2-4 tyres requiring replacement.

4. N/A

Any car deemed beyond reasonable economic repair to get it to a retailable standard is not valued by cap hpi Black Book and is therefore not covered by these definitions.

If vehicle has both Average “All Ages” criteria (i.e. interior, loose items & tyres) AND Average exterior criteria, vehicle becomes Below