Vt with FCA - excess mileage devalued vehicle?

[Campervan999]

After sending the two letter templates from here, I have just received the following email from them.
I voluntarily terminated in November last year and got an email from them 6 months later having heard nothing!
I went 6000 miles over the contractual mileage and vt'd a year early. I have accepted a couple of alloy wheel scrapes and have told them I am willing to pay for those and for the collection of the vehicle.
Hope somebody can help as my legal knowledge is pretty poor.
Anyway here's there reply:

Dear Mr XXXXX

With regards to the excess mileage, had the vehicle returned with 18,000 miles the value at CAP clean ( if in great condition) would have been £5,350.00 ( I have back dated this to when the vehicle sold at auction) We sold it for £4,800.00 therefore a loss of £550.00. The damages would be an additional liability as you can expect, being a consumer if you was purchasing a vehicle that had a few dents/ marks you would expect the price to be lowered. Therefore I hope you can now appreciate that we are within our legal remit to charge for excess mileage and damages as per the Common law of Misrepresentation aswell as the CCA section 100 (4). Moreover the damages are within the terms and conditions of your finance agreement, which I have already advised you of. To understand reasonable condition please be aware that we are guided by the BVRLA guidelines for fair wear and tear. We can expect vehicles to return with damages but anything outside the allowed ‘mm’ from the fair wear and tear guide is chargeable.

Therefore as per my previous email our stance remains the same. We have reduced the damages for you and the charge is less than the loss suffered due to the condition of the vehicle.

I hope you can accept this response and will accept the charges and conclude the matter.

[Kati]

R0b ??

[R0b]

Hello
I am not clear on the full background to your issue but reading between the lines, was the car supposed to have been at 18,000 miles pro-rata when you VT the agreement? I don't know what emails were sent prior to this one so I am only working on the basis of what you've supplied.

Not entirely sure why they make reference misrepresentation but I suspect they are trying to suggest that you gave them a wrong figure in terms of the mileage you would be doing each year and because you exceeded that mileage amount, you misrepresented the mileage causing them to suffer a loss on the vehicle.

Even if that's what they are referring to then it has no relevance anyway and clearly the person writing it doesn't actually know what they are talking about. The person has admitted referred to the common law of misrepresentation, but the right to VT and limit your liability set out in the Consumer Credit Act 1974 and it is well established that legislation prevails over common law in the event of a conflict.

In terms of their valuation for the car at 18k miles and great condition, where have they got that figure from? Also, they have based that valuation on the car falling into the 'clean' category under the CAP HPI conditions. Actually, your obligation is to take reasonable care of the car so arguably you could say that a car in a reasonable condition would fall into the 'average' category and so it should be based on that. So what's figure did they arrive at for a car being in the average category because I would like to think its somewhat closer to the £4,800 they sold it for.

The BVRLA guide doesn't actually take into account the age of the vehicle so it doesn't matter if the car is 2 years old or 10 years old, the same criteria will apply and inevitably, but in any event the older the vehicle, the more likely it is to have sustained damage over time - hence the CAP HPI conditions takes that into account and which is reflected in the maximum number of acceptable repairs.

You are not actually obliged to pay the collection fees but since you've already agreed I don't think you can get out of it without some push back from them. If you are prepared to pay for some scratched alloys then that's your choice as it is subjective. But it's up to you as to your next steps, you either pay them the full asking price or you can write back to them and send a cheque along with your letter denying that you owe anything and that you will only offer pay what you agreed last time in full and final settlement. If you wanted to be brave you could say (which is optional) the payment of the collection fees was as a gesture of goodwill and if they refuse the amount offered by you then you will not offer to pay the collection fees again.

You've not named the lender so it would be helpful to know who that is. If you want any feedback on your letter, post up the draft and I will comment on it when I can

[Campervan999]

Hi Rob,
Many thanks for your speedy and detailed reply.
The car was VT'd 3 years into a 4 year PCP.
In relation to the mileage contract, the salesman kind of skipped over that, and just kept saying don't worry if you go over the 6000 miles per annum as when the 4 years are up, we will give you another brand new car same spec or higher, and you will be paying about £30 per month less! (I can see a lot of dealerships being taken to court for misselling in the future!)
So I handed the car back with 24,000 miles (I was never given the choice to increase the mileage when I signed the contract and I suspect they never mentioned this to keep the payments lower and get the sale).
So it was 6000 miles over.
I have copied the emails from start to finish below:

Dear Sir/Madam

In reply to your letter dated the 16/04/2018, and in relation to the above vehicle that you collected on the 17/11/2017 (5 months between collection and writing to me), I must stress how disappointed I am with the lack of communication from FCA.
To receive a bill for over £600, five months after collecting my vehicle is unreasonable to say the least.

I would also like to point out that the liability in relation to the alleged outstanding balance for excess mileage is denied, as is the “unacceptable damage” that you also list in your letter.
You have suggested in your letter that I am liable to pay excess mileage under the terms of the agreement, however this is not correct. 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”.
The excess mileage is a contractual term of the agreement and therefore cannot be included as an amount which is owed. This position is further clarified under section 173 of the Act in that any contractual term which is inconsistent with any rights under the CCA and imposes additional liability, whether direct or indirect, shall be void and unenforceable.
In relation to the “unreasonable wear and tear”, I strongly dispute the “scuffed rear alloy wheel L” and also the “B Post R dent”.
I am willing to pay the cost of repairs to the “Front alloy wheel L” £60 and also for the collection fee £70 (Total £130).
I have attached photographs of the vehicle that were taken at the time of the inspection (two pictures of the same alloy wheel “rear L” and two pictures of the “B post R”.
Yours faithfully, Mr XXXX

Response from FCA

Dear Mr XXXX

Your dispute has been passed onto myself to review and respond.

Apologies for the delayed response, this was due to unforeseen circumstances which we are trying to rectify internally.

In your dispute email you have advised you do not agree with the damage charges including the excess mileage charge. Furthermore the recharge letter was sent to you months after the vehicle was returned.

Please note the Common Law of Misrepresentation allows the business to recover costs associated with unexpected depreciation in the event that the customer has exceeded the mileage allowance at any point in the contract and terminates early. As such we are within our rights to recover the loss associated with this based on the fact that they potentially misrepresented their intended use of the vehicle. This confirms that we are eligible to charge this for VT customers.

Furthermore it is stated in the terms and conditions of the finance agreement under section 11 (c) you are to “pay us the amount due, if any, calculated in accordance to the terms of the HP agreement ….. any sums due to us for beach of the HP agreement must be made to us when you return or when we collect the goods or, if the amount of those payments is not known at that date, when we ask for them”. therefore we can send the request for payment at any given date.

As advised FCA Auto Services are legally entitled to charge for any loss or damage for vehicle sale due to customers not adhering to the terms of their finance agreement, this is also linked to the above mentioned Common Law of Misrepresentation.

Additional to the above, the law governing VT’s refers specifically to costs resulting in damage or misuse. The relevant section of the law is the CCA 1974, Part V111 section 100 and states the below:



[IMG]content://com.sonymobile.email.attachmentprovider/2/394/RAW[/IMG]Exceeding the agreed mileage allowance can be seen to be the customer contravening the agreement to take care of the goods as agreed. Therefore excess mileage is legally allowed to be charged.

Under the section Termination: your rights from the Finance Agreement you signed, it does state “you have the right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £6,650.00. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more”. Please note reasonable care is in relation to damages and excess mileage.

Therefore as per the above excess mileage and damages are eligible to be charged. In relation to the vehicle damages, please note we are directed by the BVRLA guidelines and have to adhere to them. I have attached your report with this email.

As a gesture of goodwill, I will remove the Rear Alloy wheel L Spoke damage £60.00 and the B Post R dent £48.00, however the excess mileage and the front wheel alloy L charge will remain applicable.

Therefore the new charge will be £501.28. This is now reflected on your account.

My response :

Dear Sir/Madam,

I am writing further to your email dated the 1st June 2018.

You have suggested in your letter that I am liable to pay excess mileage under the terms of the agreement, however this is not correct. 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” .

I note that your letter refers to s.100 of the Consumer Credit Act insofar as the vehicle is not in a reasonable condition as a result of the excess mileage. Despite this claim, you have not provided any evidence outlining specifically the damage caused to the vehicle due to the excess mileage. I am of the opinion that the vehicle was maintained in a reasonable condition throughout the period of the agreement. Therefore, such damage charges you are claiming would amount to fair wear and tear and the vehicle does not need to be returned to you in any better condition other than a reasonable one.

Nonetheless, the excess mileage clause is based on the principle of ascertaining an estimated value of the car, taking into account its age and anticipated mileage at the end of the hire period. The hirer is then offered the option to purchase the vehicle at the suggested price. Mileage which exceeds the stipulated amount under the terms does not however, mean that the vehicle is not in a reasonable condition.

In any event, such sums you are alleging to be owed may only be recovered by a court order only and should you wish to pursue this matter in court, your application will be strongly defended.
As previously stated, I agree to pay the collection fee and for the damaged (scuffed) front alloy wheel. This amount to £130 which I can pay immediately.

Yours faithfully,

Mr XXXX

FCA response:

Dear MrXXXX

Thank you for your email.

With regards to the excess mileage, had the vehicle returned with 18,000 miles the value at CAP clean ( if in great condition) would have been £5,350.00 ( I have back dated this to when the vehicle sold at auction) We sold it for £4,800.00 therefore a loss of £550.00. The damages would be an additional liability as you can expect, being a consumer if you was purchasing a vehicle that had a few dents/ marks you would expect the price to be lowered. Therefore I hope you can now appreciate that we are within our legal remit to charge for excess mileage and damages as per the Common law of Misrepresentation aswell as the CCA section 100 (4). Moreover the damages are within the terms and conditions of your finance agreement, which I have already advised you of. To understand reasonable condition please be aware that we are guided by the BVRLA guidelines for fair wear and tear. We can expect vehicles to return with damages but anything outside the allowed ‘mm’ from the fair wear and tear guide is chargeable.

Therefore as per my previous email our stance remains the same. We have reduced the damages for you and the charge is less than the loss suffered due to the condition of the vehicle.

I hope you can accept this response and will accept the charges and conclude the matter

So Rob... .what do you think? Are they using scare tactics?
Many thanks again in advance.

[R0b]

More than likely scare tactics but you can never be sure. Don't have much knowledge about FCA and as far as I am aware, BMW and Mercedes seem to be the only proactive lenders who actually decide to take things further by issuing adverse entries on your credit file or take you to court. Not aware of anyone else but thats not to say they won't.

Like I said, you can be seen to be reasonable by offering what you were going to agree to pay and see what they say - send the cheque with it too and clarify its full and final settlement.

[Campervan999]

Hi Rob, many thanks for your reply. I have drafted a response to the FCAs last email which is basically all of your advice and observations you have made previously. Is this sufficient would you say?
Dear Sir/Madam

In response to your email dated the 7th of June 2018, I have the following observations to make.
You make reference to the common law of misrepresentation, but my right to VT and limited liability is set out in the Consumer Credit Act 1974. This is well established piece of legislation that prevails over common law in the event of a conflict.

In terms of your valuation for the car at 18k miles and great condition, where have you got that figure from? Also, you have based that valuation on the car falling into the 'clean' category under the CAP HPI conditions.
My only obligation was to take reasonable care of the car so arguably you could say that a car in a reasonable condition would fall into the 'average' category and so it should be based on that.
Can you please tell me what figure did you arrive at for a car being in the average category?

The BVRLA guide doesn't actually take into account the age of the vehicle so it doesn't matter if the car is 2 years old or 10 years old, the same criteria will apply and inevitably, but in any event the older the vehicle, the more likely it is to have sustained damage over time - hence the CAP HPI conditions takes that into account and which is reflected in the maximum number of acceptable repairs.

You may also be aware that I am not actually obliged to pay the collection fees either and this was a gesture of goodwill on my part.
I will only offer to pay what I agreed in my last email, and in full and final settlement of this matter. I will not offer to pay the collection fees again after this.

Yours faithfully

[R0b]

Hi Rob, many thanks for your reply. I have drafted a response to the FCAs last email which is basically all of your advice and observations you have made previously. Is this sufficient would you say?

Dear Sir/Madam

In response to your email dated the 7th of June 2018, I have the following observations to make.

You make reference to the common law of misrepresentation, but my right to VT and limited liability is set out in the Consumer Credit Act 1974. This is well established piece of legislation that prevails over common law in the event of a conflict. Nonetheless, I deny any suggestion that I have in any way misrepresented FCA [rather it appears to be the other way around. I was told by the salesperson in no uncertain terms that I would not be liable for excess mileage if I exercised my right to VT the agreement.]

As regards your valuation for the car at 18k miles and great condition, please can you confirm how you have arrived at that figure? I note that you have based that valuation on the car falling into the 'clean' category under the CAP HPI conditions. As you should already be aware, my obligation under the Consumer Credit Act 1974 was to take reasonable care of the car so upon returning the car back to you, it should, as a minimum, be at least in an 'average' condition under the CAP HPI conditions but I am not required to put it in any better condition. Taking that into account, I assume the value of the car would therefore be lower than the one you have suggested. You have also chosen to sell the car at auction which usually attracts a lower price than if you were to sell it privately or to a dealership.

The BVRLA guide doesn't actually take into account the age of the vehicle so it doesn't matter if the car is 2 years old or 10 years old, the same criteria will apply and inevitably, but in any event the older the vehicle, the more likely it is to have sustained damage over time. Hence the CAP HPI conditions takes that into account and which is reflected in the maximum number of acceptable repairs.

You may also be aware that I am not actually obliged to pay the collection fees either and this was a gesture of goodwill on my part.

I will only offer to pay what I agreed in my last email, and in full and final settlement of this matter and I will not offer to pay the collection fees again after this.

Yours faithfully

Morning,

Looks fine, just a few suggested amendments as highlighted in red.

[Campervan999]

Morning and thankyou! I will update on here as soon as I get a reply.

[Campervan999]

Having sent the above reply, FCA have responded with the following :

Apologies for the delayed response, I have only returned to the office due to unforeseen circumstances.

Thank you for your email. Although you have made a point regarding CAP Clean and Average as a finance lender we will always look to obtain the CAP Clean of the vehicle as we expect our consumers to maintain the vehicle as per the terms and conditions of the finance agreement in a clean condition. If we only receive the CAP Average for the vehicle that is a loss the business suffers as the vehicle was not maintained.

Moreover we are not obliged to re-sell the vehicle privately and not to dealerships. We allow the consumers to do this should they wish too. The moment a consumer returns the vehicle to us, we take the vehicles to Auction.

With regards to the collection fee, this is legally obligated and is stated in your terms and conditions, therefore this is applicable and is within our remit to waiver. Please see the snippet below:

[IMG]content://com.sonymobile.email.attachmentprovider/2/401/RAW[/IMG]Please be aware that within the VT letter that you received in October 2017 you were made aware that charges maybe applicable for vehicle damage and excess mileage. As a company we are within our legal remit to charge for excess mileage for voluntary termination. Moreover I have already advised you of the loss the business has made due to the upkeep of the vehicle. moreover you spoke with an agent on 23rd October 2017 who also discussed all the liabilities and the process of voluntary termination. There was no disagreement regarding the additional liabilities noted but I believe verbal confirmation was provided to continue with the VT process.

As per the previous correspondences, we do not accept the offer of £130.00, but to close the matter I will reduce the charge to only the excess mileage and the collection fee totalling to £441.28

Please contact our office to make payment on0344 5614738, if you need to arrange a payment plan the Collection Team can assist you, alternatively you can make a bank transfer to:

Payee: FCA Automotive Services UK Ltd
Account number: 33072428
Sort code: 20-00-00
Reference: 21047137

Should you still wish to dispute the charges, please contact BVRLA directly athttps://www.bvrla.co.uk/advice/guida...iation-service and we shall liaise with them directly.

Kind Regards,

[R0b]

Typically ill-informed response by FCA. I don't think there is any point in trying to send emails back and forth on this, you either pay up or dispute it and let them take you to court over it - would love to see how far they get with the collection fees.

[Campervan999]

Thanks Rob, I will send one last email back outlining the fact that I have made attempts to be reasonable over the matter and that the dispute will have to be heard in court should they wish to proceed.

[Campervan999]

So FCA Automotive Services have now sent this letter. Has anybody gone down the court route with FCA/Fiat Finance?

[Campervan999]

R0b? Twitchy backside time. Please tell me the bailiffs won't just turn up at my front door? Do I need to respond to this letter at all?
Thanks in advance.

[Amethyst]

No where near bailiffs, so don't worry on that score - that letter is just saying they might consider possibly maybe looking at taking you to court for the alleged unpaid amount ... to get to bailiffs they'd have to do that, you'd have to either ignore it completely or defend and lose in court, then not negotiate a payment within 28 days, then ignore a warrant of control application, then not pay, ignore a letter from the enforcement agent then a couple weeks later you might have a bailiff turn up. It's not something that just happens ...

[Amethyst]

Out of interest - do you have a copy of the agreement ( front page and page with the termination rights on - as well as the page mentioning mileage and reasonable condition ) ( redact your personal details off before posting )