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** RESOLVED ** Secured or Unsecured PCP - attempting to VT

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  • ** RESOLVED ** Secured or Unsecured PCP - attempting to VT

    NOW RESOLVED

    First Post

    I've been reading some of the threads regarding VT of PCP agreements. Santander keeps popping up.
    I have a Volvo coming up to 2 years old which is significantly in negative equity and already close, in value, to the guaranteed future value stated on my sales agency agreement.
    Cue the decision to begin exploring VT.
    I believe I can VT from July, but wanted Santander to confirm the payment at which I would owe less than 50% of the total cost of the vehicle. This is where I'm told I have a personal loan, Santander have no financial interest in the vehicle and the best they can offer is voluntary settlement.
    Cue digging for paperwork and phone calls to the dealership. Three pieces of information have surfaced.

    1) my dealership tell me there are two kinds of PCP - SECURED and UNSECURED. One lets you VT, the other doesn't.
    Question: Is this statement true?

    2) my pre-contract credit information document, received 2 days before I placed the order and therefore the foundation upon which I based my decision to opt for PCP (I'd leased my previous 2 cars) clearly states "Type of credit: Conditional Sale" and has vehicle collection fee, due to VT, in the Ts&Cs.
    Question: Is this document suitable to satisfy the Consumer Rights Act 2015 section 50 subsections 1 & 2?

    3) I also have a Fixed Sum Loan agreement, that I signed unaware that Fixed Sum Loan would cause me grief later, sent to the dealer by email on the day before I collected the vehicle. Subsection 4 of Customer Confirmation asks "You have been given a pre-contract credit information document" yes, I have. Used to help me choose PCP a couple of months earlier. The same emailed document then has my signed sales agency agreement that says across the top in big bold letters "Q4 Volvo - S90 6.9% PCP Advantage (SP)" and also states the excess ileage rate and guaranteed price.
    Question: As these documents potentially conflict, and I covered by the Consumer Credit Act 1964 section 99 subsection 1?

    4) It appears that between me receiving the pre-contract credit information (1st Nov 2016), ordering the vehcle (3rd Nov 2016), receiving the vehicle (1st Mar 2017) and yesterday, the type of credit changed without my knowledge or consent from Conditional Sale to Fixed Sum Loan. Indeed, Santander Consumer state on their website ""A Fixed Sum Loan is not available as a standard product choice. We may offer you this product as part of our underwriting conditions. Your dealer will make you aware of this after your application for finance has been received and assessed by us" (source: https://www.santanderconsumer.co.uk/...ixed-sum-loan/).
    Question: Am I the subject of misrepresentation?

    Santander and Volvo are both investigating, a formal complaint may be raised with Santander. If anyone can answer, to the best of their knowledge, the questions above then I would be grateful for your opinions on the understanding it is not formal legal advice.
    Last edited by KittenzaTrio; 25th March 2019, 15:01:PM. Reason: RESOLVED!
    Tags: None

  • #2
    Hello
    1. There's no such thing (I believe) as a secured or unsecured PCP. All PCPs are secured against the car because it is owned by the finance co. until the relevant criteria is met i.e. paying the balloon payment at the end of the hire period. There are secured and unsecured loans, a fixed sum loan agreement is unsecured because the loan isn't secured against an asset and by the same token, a secured loan is one where the loan is secured against an asset in the event of default.

    2. On the face of it, I would agree with you but 50(2)(b) is the crucial point. I suggest you take a read of the attached article on Section 50 and in particular, the section titled Qualifying Representations / Preventing Reliance on page 3. You'll see some commentary about how Section 50(2) is interpreted from the author's perspective and also mentions that many times representations are made prior to the agreement being produced, so a entire agreement clause which excludes any prior representations, may be considered invalid by a court.

    3. I don't think you could rely on 99(1) as a conflict, what you can do is rely on common law misrepresentation as an alternative argument if the second point fails Section 50 CRA is effectively a statutory representation provision whereas common law misrep is based on tort law and could have wider damages implications compared to Section 50.

    4. As per point 3 but not sure you can rely on that statement if it wasn't presented to you at the time. I think there is force in arguing that you were represented with PCP pre-contract information and a credit check was carried out and sold to you on the understanding the agreement would be a PCP.

    5. One other thing to consider is that the Fixed Sum Loan agreement is an entirely new agreement with different terms. That means you should have been supplied with fresh pre-contract information which is a requirement under the Consumer Credit Act. If memory serves me right, the failure to provide that information means that the agreement has been improperly executed and may only be enforced by an order of the court.

    6. The FCA has been investigating the mis-sellng and misrepresentation of PCP agreements and other types of agreements in relation to car finance. Your case would be a prime example to send to the FCA and their enforcement team about being mis-sold the wrong loan product without being given the proper information.

    What outcome are you seeking from Santander, have you suggested any proposed resolution to this? I don't think it would be unreasonable to suggest that you hand the car back to Santander and call it quits. You could try to apply a bit of pressure and mention that you are also considering a complaint directly to the FCA to assist in their investigation into the mis-selling of car finance by dealerships and lenders alike, which from the sounds of things seems to be the case here. That might prompt Santander to agree to recovering the car and retaining the instalments in return for you being discharged from all liabilities under the agreement.

    Or you might have other suggestions, but they need to be sensible.
    Attached Files
    LEGAL DISCLAIMER
    Please be aware that this is a public forum and is therefore accessible to anyone. The content I post on this forum is not intended to be legal advice nor does it establish any client-lawyer type relationship between you and me. Some of the content I post may include example wording, letters, or other similar responses but they are intended purely for informational and educational purposes. Using some or all of the content I post may fail to meet your needs that is specific to your situation. Therefore any use of my content is at your own risk and I cannot be held responsible in any way. It is always recommended that you seek independent legal advice and you can do this through the Law Society's Find a Solicitor database, by contacting your local Citizen's Advice Bureau or legal advice centres such as LawWorks. You may also be able to seek legal advice from your local university who may run a free (but limited) legal advice clinic to members of the public.

    Comment


    • #3
      Thank you for the prompt response. I have revisted my inbox and located the email from Volvo asking me to sign, scan and return the finance docments. In this pack:
      1) Covering letter from Volvo to Volvo Car Credit asking for the money to be released. Signed by the sales executive. Dated 17/02/17 - 10 days before the email is sent to me.
      2) Pre-contract Credit Information showing type of credit as Fixed Sum Loan.
      The change to type of credit was not, to my knowledge, pointed out to me. I'm simply asked to sign and return the forms ASAP.
      Q: Should the change have been explained to me verbally or in writing?
      3) Affordability notice
      4) Fixed Sum Loan Agreement
      5) Sales Agency Agreement - showing the product name "PCP Advantage"
      Interestingly, this agreement form has a slightly different agreement number, beginning 777-1 rather than 100-1 (as is on the fixed sum loan agreement)
      6) Direct Debit instruction

      The email begins: (names replaced with roles)
      On Mon, 27 Feb 2017 at 09:47, SALES <email address@vendor> wrote:
      HI BUYER

      Yes that’s fine, I can pick you up 8:50
      I have also attached finance docs for you to sign as I just checked and it won’t allow me to do it on the computer. If you can sign them where I have put the crosses and scan back to me asap so then we won’t have any issues Wednesday.
      Thanks
      SALES

      From: BUYER [mailto:BUYER@Email]
      Sent: 27 February 2017 09:21
      To: SALES <email address@vendor>
      Subject: Re: AFRL form
      Hi SALES
      I'll do this tonight when I get home (i'm working on a client site today and don't have access to a printer here.)
      Mixed emotions this week, having to say farewell to the XC60 and collecting the S90.
      Might it be possible to get a lift from LOCAL station? I can be there at 8:50 or 9:20 - whichever is more convenient.
      Cheers,
      BUYER
      On Mon, 27 Feb 2017 at 09:13 SALES <email address@vendor> wrote:

      HI BUYER
      Hope you are well, and had a good weekend.
      Can you sign the form I have attached and scan it back to me please. Hope you are excited for Wednesday!


      Thanks
      SALES


      The only outcome I'm seeking is the ability to VT the agreement as and when I wish to, as is my perceived right.

      Comment


      • #4
        The difficulty that might arise is that if you were given all documentation relating to Fixed Sum Loan, I expect Santander to say that you should have had read those documents and that onus was on you, so it is irrelevant as to whether you didn't know, the fact is you signed.

        Countering that argument you would have to point out that you were told the agreement would be on a PCP basis, so why would you have to any reason to doubt that these documents are something entirely different? There is also the fact that nothing in those emails suggest that the Fixed Sum Loan agreement is a different loan product than what you originally applied for, nor does it seem to have been explained to you, other than asking you to sign the documents marked X.

        As already mentioned, PCP agreements and Fixed Sum Loan agreements are are not the same product and have different consumer rights, one of which is the voluntary termination right allowing you to terminate early and return the car after half the price being paid. In the absence of any explanation by the dealership, it would be fair and reasonable for you to think that the agreement is on a PCP basis.

        The problem with you wanting to VT is that the Fixed Sum Loan agreement doesn't allow for it. There would have to be a variation to the terms of the agreement to allow that to happen. So I'm not sure that Santander would be prepared to do that, they might be happier to have the car returned. Otherwise, you would have to seek damages in lieu of termination and that might be difficult to quantify.
        LEGAL DISCLAIMER
        Please be aware that this is a public forum and is therefore accessible to anyone. The content I post on this forum is not intended to be legal advice nor does it establish any client-lawyer type relationship between you and me. Some of the content I post may include example wording, letters, or other similar responses but they are intended purely for informational and educational purposes. Using some or all of the content I post may fail to meet your needs that is specific to your situation. Therefore any use of my content is at your own risk and I cannot be held responsible in any way. It is always recommended that you seek independent legal advice and you can do this through the Law Society's Find a Solicitor database, by contacting your local Citizen's Advice Bureau or legal advice centres such as LawWorks. You may also be able to seek legal advice from your local university who may run a free (but limited) legal advice clinic to members of the public.

        Comment


        • #5
          R0b a formal compaint has been opened by Santander under the premise that I have been mis-sold. I'll keep you posted. Thanks for the advice.

          Comment


          • #6
            back in 2013 i took a car on HP with Santander assuming it was against the car (silly me didnt read all the paperwork at the dealers but then who does) i was told by the salesman it was against the car, turned out it was a personal loan for the car which if i was fully aware at the time i wouldnt have agreed to.

            Comment


            • #7
              RESOLVED!
              Santander uphelp my complaint and offered the facility to VT.
              Meanwhile, Volvo also upheld my complaint and have offered to settle the personal loan persuant to me buying a new vehicle with them, with a decent discount, utilising the incentive money from Santander for a new sale.

              Thank you for all the advice.

              Comment

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