voluntary termination - more than 50%

[Bass Player]

I have been fishing around the web for an answer to a query I have regarding the voluntary termination of my Skoda YETI on a PCP deal (which has been a great car!). Due to it's specific nature I have been unsuccessful in finding the information so would be grateful for any advice I can find here.

I am 38 months into my 42 month agreement and have triggered the VT primarily because I am way over the mileage, am now outside of my service agreement and am just wanting something new.
I understand I will be liable for 50% of the finance but I am in a position where I have paid significantly over 50% yet on the other hand will be looking at a bill of £1224 for the excess mileage.
Where do I stand with regard to offsetting the total above the 50% and the excess mileage fee?

[R0b]

So my first question is, why are you way over the mileage that you agreed to? Going way over the mileage suggests that you may not have been anywhere near accurate in terms of your annual mileage. When you realised you were doing potentially more miles than you should have, did you contact the finance co. to renegotiate?

You could argue that having paid significantly more than 50% to offset the excess mileage but it's just that at the moment, an argument. I don't think it has been tried or tested in court as yet but I would probably say its on the weaker end of arguments.

One other argument might to look at what the total price of the agreement is and if your 38 instalments + the excess mileage charges + the value of the vehicle exceeds the total amount payable, you could argue that there is a case of betterment because, had the agreement run its course, the finance co. would have only been entitled to the total price payable and not a penny more. So any excess mileage amount should be reduced down to reflect that position.

Of course the main argument is that excess mileage isn't recoverable. It's been tested in court of around £600 worth of charges by Mercedes Benz and they lost. So that should be your starting point as opposed to any unique or quirky arguments.

If you haven't done so already and you are still within time, is to make a formal complaint and then trigger a complaint to the Financial Ombudsman. Previously they have been siding with the finance companies on excess mileage however due to the above court case, they are now reviewing that position and hopefully will now side with customers. I've attached a recent letter from the FOS which sounds encouraging.

[Bass Player]

Hi Rob, thank you for the information.

With regards to the excess mileage I was actually running under after year 1 but due to a change of jobs have since caught up and gone beyond. It was apparent 12-18 months ago that I would be landing up over but the general consensus on various car owner forums seemed to be that the excess mileage charge of 6+ VAT was beneficial compared to adding anything to the monthly cost. I am going to be returning the car with 58,000 on agreement of 41,000.

I have read your advice on VT in general and understand it's a grey area, some would even go so far as to say unenforceable (aren't I officially out of the contact when I VT so how can contractual terms still apply?), but I was just interested that seeing as I have paid over the 50% maximum liability I understood that to mean I still had a bit of credit in stock. Your point regarding the total price of the agreement seems to be the same argument worded correctly.

The other thing I might have in my favour is that I will be returning the car in extremely good condition having always been serviced by the dealership and having zero scratches, dents or marking of any kind on the bodywork. Unfortunately children have been let loose on the interior but nothing a good valet can't remedy.

With a house move and another recent change in employment I really can't face a wrangle or lengthy correspondence with this one (I have clocked up 6 hours on the phone to BT over the last fortnight).

If I ignore the bill, will they serve me with a court notice and will it go on against my credit rating?

[Bass Player]

rob - Again, thank you for your previous reply.

I have received the inevitable end of contract invoice for the excess mileage but also some conflicting information.
The date of the letter is 08.01.2019 but I have also received a statement dated 09.01.2019 which still shows me as being within the agreement. This statement also informs me of my termination rights in accordance with section 99 of the CCA 1974.

Confusingly I have an email from Volkswagen Financial Services (UK) Limited dated 10.12.2018 informing me they have terminated my agreement as instructed.

Whilst it is clear the left hand doesn't know what the right hand's doing, does it strengthen any legal stance I can take when fighting my case?

[Bass Player]

Hi R0b

This might sound like a funny question, but will the Ombudsman take a dimmer view of my case if I am explicit that I am seeking to take advantage of a legal loophole?

Obviously, this is morally bad form but it’s no less than that shown by VW.

For example, I told the sales man what I could afford per month and he played around with the mileage until it was in the right ball park.

VW were knowingly giving misleading information on MPG via their factory road testing.

Despite the moral issue there is a genuine inability to pay back the one thousand pounds as we simply haven’t budget for it. I VT’d the car because I wanted a new one, not because I was actively seeking to avoid paying the mileage it just looks like an unexpected benefit.

The article on car expert relating to VT explicitly states that the car finance companies will not pursue a legal case on excess mileage alone. If this is true what benefit is there to be derived from making a complaint via the financial ombudsman?

[R0b]

The FO will take into account all relevant factors and determine what is fair and reasonable based on the evidence provided to him/her. The only cases going to court that I am aware of is Mercedes. They lost recently and guess they might push their luck again depending on the circumstances.

The benefit of trying to go to the FO is that if a decision is found in your favour, it is legally binding on the finance co. Sometimes the finance co. may withdraw any claims if a complaint is submitted. The other added benefit is that if the FO receives a certain number of complaints in any 12 month period, then the finance co. is charged a cost. Whilst it isn't a great deal of money, it's still a cost to them which does add up when you consider how many complaints may be made per year.

[Bass Player]

Thanks R0b

If I go to the Ombudsman, it will only be after I receive a final response to my complaint from VW.

The Ombudsman is there to support those genuine cases where people VT because they are in financial trouble. If someone is obviously abusing a legal loophole in may bias them back toward to financial companies which I wouldn’t want to contribute toward.

If I could knock a few hundred off the price I will probably feel obligated to pay up. It seems you can put a price on morals.