Voluntary Termination - Blue Motor FInance. Advice needed.

[rosierd]

Good Morning and thank you for taking the time to have a look and offer up any advice.

I am writing on behalf of my fiancee who has a 5 year Hire Purchase through Blue Motor Finance as of December 2016 on a Fiat 500 (2012 Plate). Now we have recently agreed to get a new PCP deal on a vehicle and taking delivery in September as she will require a bigger family car, expanding family.

So we are actually well over 50% i.e. 2 years and 8 months. Never missed a payment. We are wondering how we approach VTing the vehicle as ideally if we could say 1st September take the old vehicle and then we have our new vehicle so no crossover or leaving her without a vehicle for some time but it doesn't look as easy as that, can you future date a voluntary termination? We spoke about it this morning and if that can't be done even giving the vehicle up end of this month and I forfeit my car for a month and get the train to work isn't the end of the world.

However my other point is in the 2 years 8 months she has owned the vehicle it's always been in very good condition had to get two new tyres not an issue and passed every MOT absolutely fine. However we haven't ever serviced the vehicle because it's done very low mileage i.e. 9000 miles in that time. But the paperwork under the voluntary termination states:

"TERMINATION: YOUR RIGHTS You have a 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 £5,230.61. 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."

I highlight taken reasonable care of goods because we have it's in very good condition (No scuffs,marks,dents etc,) not done a lot of mileage and passed every MOT so is in good condition. However further down the agreement on a separate page:

"TERMS OF AGREEMENT

4. Caring for the goods a) You must keep the goods in good working order and condition at your expense and you must have the goods serviced in accordance with the manufacturer's recommendations and any applicable warranty. You are responsible for all loss of, or damage to, the goods even if caused by events beyond your control. However, you are not responsible for loss or damage due to fair wear and tear."

This is the issue for us we haven't had it serviced because of the very low mileage and I appreciate it probably seems ignorant not to service it but we didn't feel the need to since it didn't have an applicable warranty and it isn't a legal requirement to prove road worthiness. The vehicle is now 7 years old.

To summarise what I am asking.

1) Can you future date a voluntary termination
2) Because the vehicle is in good condition and not done a lot of mileage and we haven't serviced the vehicle have we been negligent in terms of 'taking reasonable care'

We could happily go out and give it a major service if it was in our interest to do so?

Kind Regards

[Amethyst]

Just a quickie - as you mention that youve been paying for 2years 8 months - the 50% is based on the amount of the credit agreement NOT time paying ... so check whether the instalments you have paid total over £5,230.61. As if you haven't hit that then there's no point worrying about services etc. Like I say, just checking you are aware of that xxx

[rosierd]

Just a quickie - as you mention that youve been paying for 2years 8 months - the 50% is based on the amount of the credit agreement NOT time paying ... so check whether the instalments you have paid total over £5,230.61. As if you haven't hit that then there's no point worrying about services etc. Like I say, just checking you are aware of that xxx

Apologies for not stating that in there. As of today she has made 30 Payments of £160.02 (£4800.60) plus we paid a deposit of £540.00. My understanding is she has then paid so far £5300.60 so over half way. As of 8th July she pays another £160.02.

[Amethyst]

Ok great Some agreements can mean you don't hit 50% until near the end of the agreement due to balloon payments etc so best to double check.

Ill tag R0b for you on the query over whether a service is essential to meat the reasonable care - services are usually due on mileage rather than time periods so worth checking what those are in the handbook.

Youd wait until when you want to give back the car to notify of the VT - you can't future date it - and you will need to make the payments until after the August payment if you're vt'ing on 1st Sept afaik.

[R0b]

Hello

Whether a failure to get the car serviced is a failure to take reasonable care is probably a moot point at this stage. To put it into context The Court of Appeal in Brady v St Margaret's Trust considered what was meant by keeping the car in "good order, repair and condition" and this is what they had said:

As I read this clause, the hirer's duty is to keep the car in the condition in which it might reasonably be expected to be if he had looked after it properly. He need not put it in a better condition than it was when he hired it. He need only keep it in the condition in which a reasonably minded hirer would keep it. Thus he would repair it if there was an accident, and he would do the immediate repairs in the course of running the car, but no more. The hire-purchase company should give evidence of any default on his part in that duty.

Now, I've always advocated that the duty to take reasonable care is not the same standard as keeping the car in good order, repair and condition which is usually what you'd see written into your contract. The bar for taking reasonable care is not that high at all, but you do have to take into account the circumstances in which the duty arises.

It is plausible to argue that the duty to take reasonable care goes as far as ensuring the car is simply returned in a roadworthy condition e.g. valid MOT certificare, tyres on or above legal limit, brakes working etc. and therefore you are not obliged to have the car serviced as it falls outside that duty. Arguments on the other side might well include the fact that the primary purpose of a service is to carry out a number of checks on the car to ensure it runs smoothly and to identify potential risks that could lead to the the car being in an unroadworthy condition.

At the end of the day, it's a subjective question and if you were to ask a reasonable person that as part of their duty to look after a car, would that entail getting it serviced on an annual basis, the answer is likely to be a yes than a no.

Of course if the car hasn't done the recommended mileage for a service to be triggered, that could help you in arguing against having one done (but manufacturer guidelines tend to state something like the earlier of X miles or 12 months). Choosing to get one done is a decision for you to make and you alone, so I'll leave that up to you but if I were in your position, I would get a service done or alternatively have an independent third party to complete an inspection confirming that the car is in a roadworthy condition and in a reasonable condition - either way, there's a cost element.

As for the point about terminating in the future, I will have to disagree with Ame on this one. Section 99(1) says you can terminate at any time and to me that implies a future termination date. So for example, if you were planning to move out of the country you could write to the lender and tell them you are giving notice to terminate on X date in the future. In doing so, this would mean that:

a. The contract remains alive until the date given.
b. You are lawfully entitled to continue making use of the car.
c. Any instalments due up to the date of termination will need to be paid.
d. Your duty to take reasonable care continues.

[rosierd]

Hello

Whether a failure to get the car serviced is a failure to take reasonable care is probably a moot point at this stage. To put it into context The Court of Appeal in Brady v St Margaret's Trust considered what was meant by keeping the car in "good order, repair and condition" and this is what they had said:



Now, I've always advocated that the duty to take reasonable care is not the same standard as keeping the car in good order, repair and condition which is usually what you'd see written into your contract. The bar for taking reasonable care is not that high at all, but you do have to take into account the circumstances in which the duty arises.

It is plausible to argue that the duty to take reasonable care goes as far as ensuring the car is simply returned in a roadworthy condition e.g. valid MOT certificare, tyres on or above legal limit, brakes working etc. and therefore you are not obliged to have the car serviced as it falls outside that duty. Arguments on the other side might well include the fact that the primary purpose of a service is to carry out a number of checks on the car to ensure it runs smoothly and to identify potential risks that could lead to the the car being in an unroadworthy condition.

At the end of the day, it's a subjective question and if you were to ask a reasonable person that as part of their duty to look after a car, would that entail getting it serviced on an annual basis, the answer is likely to be a yes than a no.

Of course if the car hasn't done the recommended mileage for a service to be triggered, that could help you in arguing against having one done (but manufacturer guidelines tend to state something like the earlier of X miles or 12 months). Choosing to get one done is a decision for you to make and you alone, so I'll leave that up to you but if I were in your position, I would get a service done or alternatively have an independent third party to complete an inspection confirming that the car is in a roadworthy condition and in a reasonable condition - either way, there's a cost element.

As for the point about terminating in the future, I will have to disagree with Ame on this one. Section 99(1) says you can terminate at any time and to me that implies a future termination date. So for example, if you were planning to move out of the country you could write to the lender and tell them you are giving notice to terminate on X date in the future. In doing so, this would mean that:

a. The contract remains alive until the date given.
b. You are lawfully entitled to continue making use of the car.
c. Any instalments due up to the date of termination will need to be paid.
d. Your duty to take reasonable care continues.

I appreciate everything you have said there @R0b and find it to be very useful. I am just wondering given the fact the vehicle hasn't even covered 10,000 miles in 2 years 8 months of owning it whether I could argue the point with them and I do appreciate it is set out 12,000 miles or every year for example with regards to servicing. Do we know what charges they could levy with regards to missing servicing? Plus I do wonder whether if I get a service done July for example they might argue I didn't get one done Dec 2017 (1 year after we took ownership of vehicle) and Dec 2018 so hence we should of had two services?

I am happy to get a service done again unsure whether to go for Minor or Major... but I am not really correcting the fact it should of had two and surely one could say having an MOT done proves it's road-worthiness and therefore I have taken reasonable care of it? I want to do the most cost effective thing i.e. if getting a service done now leaves me in better stead for example or whether they might not argue it with me and I appreciate you can't predict the future so I might be rambling here.

Kind regards

[R0b]

If the car should have had two services carried out in the time it was in your possession then you might want to re-consider getting one done now and look at having a third party inspection done. From my experience and those on the forums, lenders will no doubt charge you for missing service stamps and that's likely to be dealership servicing costs.

As I said above though, the lack of a service does not prove you failed to take reasonable care rather much like an independent inspection, it is a guide as to the current condition of the car and to highlight any potential areas for concern that may need to be addressed in the short or longer term. If you can show from an independent party that the car overall is in a reasonable condition, I would think it be difficult for the lender to argue much, although if you haven't kept up with topping up with the oil and other lubricants then that could be a point of argument i.e. the shelf life of the component or part has been reduced as a result - but again they would need to provide evidence and proof that this was the case.

Getting an indepedent inspection done is likely to cost less than it would for two services on the car or at least what the lender might charge you.

DEKRA offer two types of inspections: (1) Peace of mind and (2) Comprehensive

AA also do similar insepctions (click here) as do RAC (click here)

You can also aks about at your local garage for a price to carry out an inspection which might be cheaper than the above options, but before agreeing to anything you should confirm exactly in writing what the inspection will consist of. The list of checks carried out as well as a road test are probably the minmum you should get but you could also opt for a bodywork inspection too though if you are confident that it's in excellent condition then you could omit that and do your own checks with lots of photos as recommended in my VT guide. The garage should provide you with a final report comprehensive enough to allow the lender or third party to understand what the garage had done and its conclusions about the condition and roadworthiness of the car.

As I said, you could do none of this and call their bluff to see what they do. Some companies like BMW threaten (and quite often recently) mark your credit report as a negative if you don't pay up. I don't know much about Blue Motor Finance so I couldn't comment on their style.

[rosierd]

I take your point on getting the inspection done and this seems like a sensible thing to do.

I note on a previous post you made you said and I quote.

"I would personally argue that the car was returned in a reasonable condition and if they feel that because there was no second service they have a right to charge you then I would ask them to prove that the car was not returned in a reasonable condition. There is no criteria as to what is reasonable but common sense would be the way forward.

They would need to hire an expert to confirm that the car overall was not in a reasonable condition. So in essence, the onus is on the lender to prove their case not you. It would not be commercially viable for them to take you to court for £100 especially if you dispute it, their legal fees will cost at least 10 times that amount and they will not be able to recover them because it will be a small claims issue - legal fees are not recoverable in small claims except for £100." Taken from https://legalbeagles.info/forums/for...ry-termination

I have chopped a bit off there basically the persons vehicle only being 2 years old and the £100 being the missed service charge.

Would it be wise to take a gamble and VT the vehicle and then get them to prove the car isn't in a reasonable condition? (I mean it is in a very good condition and it's 7 years old) Ideally I don't want to drag this out and I maybe I am trying to dodge my liability slightly. I just don't know how much they could charge for missed servicing? and in terms of CAP pricing the vehicle is still valued at £3000 (Rated as good) and they have as above received from me approx £5300 plus the auctioned cost of the car means they have made approx £8000 on a vehicle costing £6500 at the time.

Thanks again R0b

[R0b]

Well that post was in 2016, we are 3 years on, more people becoming aware of this site and in turn lenders are becoming more aggressive and using other means to coerce debtors into paying up, like the example I gave about BMW.

I can't really tell you what you should do because everyone is different. Some like the simple life and therefore paying for a service/inspection will be less hassle whereas others prefer to stand ground on points of principle in which case it is most likely lots of letters back and forth getting nowhere - with the exception of Mercedes who took a case to court for excess mileage and lost, I've yet to see other companies issue legal proceedings for damages or failing to take reasonable care, most likely because it's not commercially viable and in the end they will probably at some point sell it to a debt purchaser in the future.

Whatever you do, it's your risk.

[rosierd]

I understand what you are saying R0b but in all seriousness thank you for your help. It does give me a lot to think about and this site and yourself has been a valuable resource.

So thank you.

[rosierd]

R0b On a quick note and sorry to drag it up again. I happened to have a look at the service book regarding previous services and in the 4 years before I took ownership of the vehicle it was serviced twice and once a few months prior to me taking ownership done by The Carshop where I bought the vehicle but literally stamped no vehicle info (VIN etc) unlike the previous entry from Fiat and no paperwork regarding it included which makes me dubious any service was actually carried out?

Could I argue the vehicle should have had 4 services and only has 2 and that I have no evidence the service carried out a few months before I took ownership was actually carried out, therefore, bringing into doubt the fact it wasn't even regularly serviced before I took ownership which might mitigate my duty to do the same?

If all else fails I think I will service it so it has an up to date service and then argue it wasn't serviced regularly beforehand.

Thanks again.