PCP Contract

[gracelogan]

Hi, my wife took out a 3 year pcp contract 3 weeks ago on the belief we was starting a new job, which has now fallen through, my wife works part time earning £700 per month yet Hippo motor group have let her have an Audi and finance for £19,000 repaying £341 per month. Is that legal and can we get out of it? There was no affordability check! No income or expenditure done nothing. So can the contract be legal taking half her earnings? Looking T ways to get out of the contract easy. Thanks for your help if anyone has some advice.

[Amethyst]

Presumably they did run a credit check ?

If your wife declared her income based on her expected salary from the new job as her income then it may be taken at face value. Did she inform them she didn't have the job yet and declare her current income only or did she simply not have to declare her income/employment status at all ?

Do you have a copy of the agreement ?

Where did the agreement get entered into ? on the traders premises ?

When did she pick up the car ?

Any issues with the car? "In the first 30 days of ownership, you now have the right to reject an unsatisfactory car and are entitled to a full refund."

R0b

[gracelogan]

Hi Rob

Thankyou for your reply, they run a credit check but employment and salary was never even mentioned. All contracts was signed online and car delivered to our house. The only issues with the car is we don’t like the leather interior. My thoughts is surely financial regulations mean she cannot enter into an agreement without an affordability check. And using half her wages can’t be right and gives us a way out?

thanks

[Amethyst]

Have you got copies of the agreement ? so it was all done online ? Did she not have to enter that she was employed and salary etc ? home ownership etc ?

https://www.hippomotorfinance.co.uk/quick-quote/ these brokers or https://hippomotorgroup.com/ / https://www.hippousedcars.co.uk/ ?

( re the leather interior - did you not go and see the car or is it a brand new one?)

https://www.handbook.fca.org.uk/handbook/CONC/5/2.html might assist ( R is rules and G is guidance ) as might https://www.fca.org.uk/publication/c...bility-web.pdf

( I was tagging R0b to have a look, sorry )

CHARGES/ CANCELLATION FEES:

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013: If we deliver a car to a private customer (not a business) without meeting them face to face the sale will be governed by these regulations. This gives you certain rights that are explained below.



Contract: The Company’s Sales Executive that you deal with will send you an order form detailing

• The main characteristics of the goods.
• Our address and contact details.
• The total price of the goods.
• Details of any additional delivery charges or other costs.
• The arrangements for payment and delivery.

Cancellation: You have the right to cancel this contract, in writing within 14 days from the day you take collection. You can do this by contacting your Sales Executive or emailing customerservice@hippomotorgroup.co.uk. You can also call the telephone number at the footer of this document.



Return of Vehicle: On receipt of this notice of cancellation we will contact you to confirm arrangements for collection of the vehicle. You may arrange for the return of the vehicle to us, or we will collect it at a cost of £1 including VAT per mile for the distance recorded between the Company’s premises and your address as shown on a web based distance calculator of the Company’s choice. You are required to make the car available for collection at a pre-determined date and time within 30 days of the delivery date.



Mileage and Condition: On collection the car must not have travelled more than 10 miles since delivery and must be in the same condition as it was when delivered. Any deterioration recorded at the time of collection will be valued when the car arrives at the Company’s premises and details of these costs will be notified to you. Excess mileage over the allowed 10 miles will be charged at 50p per mile.



Refund: Your refund will be executed in the same way that payment was made originally by you and will be made within 30 days following delivery. In all other circumstances, cancellation will only be accepted at the discretion of Hippo Vehicle Solutions Ltd, and subject to payment of all reasonably resulting costs and/or losses. Hippo Vehicle Solutions Ltd reserve the right to charge a cancellation fee of 3 times the monthly payment plus VAT and withhold any deposit. Any costs incurred by debt collection agents in the course of collection of this sum will also be payable. If for any reason the specified vehicle is not delivered, Hippo Motor Group will not be held responsible for any losses incurred.

[gracelogan]

Hi, Have you got copies of the agreement ? Yes but its all online,
so it was all done online ? Yes everything
Did she not have to enter that she was employed and salary etc ? home ownership etc ? No nothing.

[Amethyst]

Bizarre . Have you a copy of the agreement you can post ( think they send an email copy ) please ? ( redact personal details )

[R0b]

Hello

I don't think your wife has any excuse really because she gave out her financial information based on a prospective job when in reality she shouldn't have done so. She should have either given her current financial income or waited until she got the job and started it so at the very least, she would be partly to blame in all of this.

Now, from a legal perspective, yes Hippo Motor Group should have carried out an assessment on whether the repayments were affordable. Traditionally, in the context of credit cards and personal loans, affordability assessments were done by verifying the income amount i.e. by way of payslips and then cross referencing that against other liabilities that showed up on credit checks and then work out whether the person has enough disposable cash to afford the repayments.

However, all of this affordability assessment malarky seems to be new to car finance companies and I will admit that I recently took out a PCP agreement and all I had given was my income. No evidence of what I was earning was required or asked for so I can believe that your wife went through the same process.

So yes, at the very least, Hippo Motor Group ought to have carried out an affordability assessment and perhaps asked your wife other questions such as monthly income, other debt repayments and general expenses. Only then I suppose could they have determined whether the repayment amount was affordable. Chapter 5 of the CONC FCA Handbook is the section on responsible lending and in particular Rule 5.2 is all about assessing someone's creditworthiness before the agreement is entered into (click here for link). Those marked with an "R" are rules and these are mandatory which must be applied by finance companies whereas those marked with a "G" are just guidance and are not binding, but are examples of how a finance company can comply with that provision.

Breaches of rules are actionable as a civil claim for damages under Section 138D of the Financial Services and Markets Act 2000. Obviously in your wife's case, I am not entirely sure how much or what damages she would seek.

An alternative option is to exercise the right to voluntarily terminate the agreement under Section 99 of the Act which means her liability is limited to 50% of the total amount payable. Your wife however, could argue that she does not have to repay 50% because the agreement has yet to start or has only recently started and the value of the vehicle is worth a good percentage of the amount payable under the agreement. Your wife would have to rely on Section 100(3) but produce evidence to that effect. My suggestion would be to get the vehicle appraised by several dealers and see how much they would be willing to pay and then use that as her argument as to why she should not pay 50%. That is however, relying on your wife either making an application to the court or waiting for Hippo Motor Group on bringing a claim and then her counterclaiming.

In my view, I think she should try to go down the irresponsible lending route and make a complaint to them. However, she should also make a subject access request and find out exactly what information they hold about her.

[gracelogan]

Thankyou mate for your help.