VWFS - Voluntary termination - Excess mileage charges clarification

[syndrome]

Hello all,

Have read the forum quite regularly and have just had an interesting point raised when VTing my car and thought I should register and pose the question.

I have just VT'd my car and handed it back to VWFS as I took another car from my local dealer, so am a continuing customer with VWFS.
I paid a small shortfall as it was 29 months through a 48 month PCP arrangement with a 10k p/a mileage agreement, no issues handing the car back with BCA as apart for 2 wheels it was in excellent condition, the refurb costs were acceptable for this (£35 per wheel).
When I handed the car back it had just over 30k on the clocks and to my surprise when I got my refurb bill they had also added a pro rata mileage charge on to just over £300.

It all got resolved quickly as I had called them in February for a settlement figure and they told me at this time that mileage charges are not enforceable when VTing a vehicle, the case handler listened to their recording and dropped the charges immediately due to this; however the case handler warned me that future VT's would be subject to mileage charges.
As I'm a continuing customer I asked for some clarification, I had already raised the points of the Consumer Credit Act 1974, specifically Section 99 and 100, and her response was that subsection 2 states "Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination".

I can't find anywhere that clarifies this point specifically, but are her comments on this matter correct and should future charges be enforceable due to sub section 2?

Thanks

[R0b]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

I can't find anywhere that clarifies this point specifically, but are her comments on this matter correct and should future charges be enforceable due to sub section 2?

My view is no, lenders of course will say yes. The reference they are making is section 99(2) of the CCA, however section 99 is qualified by section 100 (the title of this section says it all: Liability of debtor on termination of hire-purchase etc. agreement.). If you haven't read the guide yet I suggest you do so to get a bit of background to this. Particularly the section about the legislation and the last sentence of section 100(1) where it refers to the total price immediately before termination which has a specific definition under section 189.

So section 99(2) taken into context, means that lenders are only able to claw back any instalment arrears, because that falls within the definition of 'total price' but nothing beyond that.

http://legalbeagles.info/forums/showthread.php?77612-A-guide-to-voluntary-termination-Your-rights

[syndrome]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

Thanks R0b, I had read the guide but was unsure if that could be argued as being accrued prior to termination or caught under the section 100 subsection 4 by not "taking reasonable care".

[R0b]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

Well, what VWFS have tried to do is use that wording so it applies for any instance where the agreement terminates early e.g. if you breach and they terminate or you VT etc.
The problem is that section 100 explicitly sets out your liability provided you terminated correctly in accordance with section 99.

So if you VT your agreement, they will argue you are immediately in breach and owe excess mileage. However, section 100 limits that liability by saying you only have to pay any sums in relation to the total price immediately before the termination took place. Because 'total price' excludes damages, compensation or penalty charges, excess mileage charges cannot be recovered (because they are damages for breach and/or compensation). I mentioned in the guide that section 173 goes further to say that if there is any inconsistency between the contract clause and the provisions under the CCA, then the contract clause is void.

As for section 100(4), this is really a question of whether you have been negligent whilst the the car has been in your possession. Breaching the agreed contractual mileage does not, on the face of it, create a presumption that you have been negligent. They are two separate causes of action founded on different principles. There is already case law on what a debtor should be required to do when looking after the car, so even if the agreed mileage has been exceeded the question of negligence will rest on the facts. In my opinion, the excess mileage (which they will argue affects the value of the car), is not sufficient to warrant a court holding a debtor liable for negligence - there has to be some evidence to that effect and that's why I stress that you should ensure it is has a valid MOT and is serviced and repaired when necessary which goes some way to showing that you reasonably looked after the car.

Hope that makes sense.

[syndrome]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

Thanks R0b, excellent response, makes a bit more sense to me now regarding the immediate termination and the total to pay.
I thought it would be a case of them bending it to their will, interesting point about the mileage I wonder if the mileage was truly excessive, say 200%+, if they would have a solid argument; not something I'm looking to test might I add.
Glad to report I had highlighted to them about section 173 and that if it's CCA vs a contract, CCA wins.

Thanks once again.

[R0b]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

VWFS, BMW and Mercedes seem to be the companies that mark defaults or other adverse information on your credit report so do be careful about this which you should take into consideration when defending this on principle. This sort of puts you on the back foot and puts the ball in your court as to what you want to do. I am of the view that excess mileage / damages to vehicle are solely fees or charges and do not form part of the total price payable so they should not be recording adverse information on your credit report (some people have noted that they have marked the account as VT but later on reported missed payments.. which does not make sense). Again, this is something you need to take account of and whether you are prepared to fight your case.

Mercedes seems to be willing to take you to court if the costs warrant it and there are some people on here reporting that they are in the process so it will be interesting to hear of their outcome, if any.

[Joebob]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

Please let me know if this needs a new thread, but it’s only a quick question. I’ve returned a car early on a Lease agreement (contract hire, not PCP). I returned it over 3 weeks ago but have now received a charge from VWFS for excess mileage. Do they have a time limit to send recharges? It’s only for £300 but I really can’t afford it which is partly why I sent the car back early. Many thanks.

VWFS, BMW and Mercedes seem to be the companies that mark defaults or other adverse information on your credit report so do be careful about this which you should take into consideration when defending this on principle. This sort of puts you on the back foot and puts the ball in your court as to what you want to do. I am of the view that excess mileage / damages to vehicle are solely fees or charges and do not form part of the total price payable so they should not be recording adverse information on your credit report (some people have noted that they have marked the account as VT but later on reported missed payments.. which does not make sense). Again, this is something you need to take account of and whether you are prepared to fight your case.

Mercedes seems to be willing to take you to court if the costs warrant it and there are some people on here reporting that they are in the process so it will be interesting to hear of their outcome, if any.

[R0b]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

Please let me know if this needs a new thread, but it’s only a quick question. I’ve returned a car early on a Lease agreement (contract hire, not PCP). I returned it over 3 weeks ago but have now received a charge from VWFS for excess mileage. Do they have a time limit to send recharges? It’s only for £300 but I really can’t afford it which is partly why I sent the car back early. Many thanks.

They have 6 years from the date of demand to bring a court claim to recover those sums unless the contract says otherwise.

[Joebob]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

Thanks, my question was more how long can they take to send a notification that a charge is due. It’s taken them 3 weeks to send an invoice since the car was returned. E.g. I pay the excess mileage, could they then say there is a charge for repairs in 2 weeks, 4 weeks time.

[R0b]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

Usually the terms will state on demand, but you could take the earlier date from the time the amount became due e.g. when you VT. Either way 6 years is still the amount of time they can bring a claim against you. Taking 3 weeks isn't really that long and unless there's something in your agreement to suggest they must invoice you within a certain time frame or they lose their right to recover (which is highly unlikely).

[Joebob]

Re: VWFS - Voluntary termination - Excess mileage charges clarification

Wow, that was quick. Thanks, I’ll just get it paid.