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I recently used the Legal Beagles Voluntary Termination template to successfully Voluntary Terminate my Mercedes Benz Finance (MBFS) Agreement after I had made 34 of the 36 payments on my PCP contract and thus fulfilled the 50% condition for the Voluntary Termination clause. The car was expected by BCA and was confirmed as having no damage. I signed up to 37,500 miles and completed 40,571 and thus had completed 3,071 excess miles that MBFS are requesting 9p/excess mile + VAT, a total of £331.56.
The Termination: Your Rights clause in the contract stated the following;
'You have the right to end this agreement, To do so, you should write to the person you make your payments to. We will then be entitled to the return of the goods and to half of the total amount payable under this agreement, that is £23,006. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will have no more to pay’.
I stated that, under our agreement there cannot be any liability in relation to the alleged outstanding balance for excess mileage, as the Termination clause states ‘you will have no more to pay’. Moreover, I am not liable to pay excess mileage under the terms of the agreement. Section 100(1) confirms that liability is restricted to one half of the total price payable. The CCA defines ‘total price’ as “total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement” (emphasis added).
However, they have stated the following;
'Whether you are returning your car at the end of your agreement or upon use of Voluntary termination (VT) clause, as you have not exercised your right to purchase the car, an excess mileage charge will be raised should your return mileage exceed your total mileage allowance. The obligation is set out within the first page of your agreement, under key information. The provisions of the Consumer Credit Act that cover a customer's right to VT their agreement do permits to include any over mileage when determining what is 'not reasonable' upon return upon cars return. It is stated in your agreement under 'Excess Distance', 'If the vehicle is returned to us (whether at the end of the period hire or an earlier termination), we will calculate the total distance travelled by the vehicle whilst in your possession (the 'Total Distance')... I would also like to kindly refer you to S99 (2) Consumer Credit Act 1974 where it states: 'Termination of an agreement under S (1) does not affect any liability under the agreement which has accrued before the termination.'...As your agreement was a subject to a mileage allowance prior to termination and you have exceeded the allowance of 37,500 miles, the charge has been raised correctly and remains payable.
Therefore, I would be most grateful for any advice on how I can legally not pay this excess mileage charge and if the Voluntary Termination clause without complaining to the Financial Ombudsman who always seem to side with the Finance Company.
The Termination: Your Rights clause in the contract stated the following;
'You have the right to end this agreement, To do so, you should write to the person you make your payments to. We will then be entitled to the return of the goods and to half of the total amount payable under this agreement, that is £23,006. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will have no more to pay’.
I stated that, under our agreement there cannot be any liability in relation to the alleged outstanding balance for excess mileage, as the Termination clause states ‘you will have no more to pay’. Moreover, I am not liable to pay excess mileage under the terms of the agreement. Section 100(1) confirms that liability is restricted to one half of the total price payable. The CCA defines ‘total price’ as “total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement” (emphasis added).
However, they have stated the following;
'Whether you are returning your car at the end of your agreement or upon use of Voluntary termination (VT) clause, as you have not exercised your right to purchase the car, an excess mileage charge will be raised should your return mileage exceed your total mileage allowance. The obligation is set out within the first page of your agreement, under key information. The provisions of the Consumer Credit Act that cover a customer's right to VT their agreement do permits to include any over mileage when determining what is 'not reasonable' upon return upon cars return. It is stated in your agreement under 'Excess Distance', 'If the vehicle is returned to us (whether at the end of the period hire or an earlier termination), we will calculate the total distance travelled by the vehicle whilst in your possession (the 'Total Distance')... I would also like to kindly refer you to S99 (2) Consumer Credit Act 1974 where it states: 'Termination of an agreement under S (1) does not affect any liability under the agreement which has accrued before the termination.'...As your agreement was a subject to a mileage allowance prior to termination and you have exceeded the allowance of 37,500 miles, the charge has been raised correctly and remains payable.
Therefore, I would be most grateful for any advice on how I can legally not pay this excess mileage charge and if the Voluntary Termination clause without complaining to the Financial Ombudsman who always seem to side with the Finance Company.
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