Cancelled New Car Order - Lease, £7k penalty help!

[gregh286]

hi guys,
my wife ordered a new car to lease in 02/02/19, its a lease job over 48 months, the contract doesnt have a delivery date.
To cut a long story short, as delivery kept getting delayed we got fed up and cancelled it.
Next thing the leasing company want 7k (15% of the P11D) for the order cancel.
Surely an agreement cant be open ended with dates like this, means it would never expire?
The agreement does look a bit shady and we were never explained to that this would be so penal or extortianate cancellation costs.
The agreement was not countersigned by the lease company, maybe that is a valid "out"?

Is we had taken the car eventually and returned it on distance selling act, within 14 day cooling period, then we wouldnt have to pay any costs?

Any ideas guys, my wife ready to explode.
I attached the agreement without names.

its look like they slipped in section12 amongst all other used car stuff to mask it.
Any help really really appreciate.

[gregh286]

any ideas anyone?

[Amethyst]

Who are the finance company ? ( V4B are just a broker )

It does seem you are right, if you waited and took delivery you could just return it for a full refund immediately under consumer protection regs - assuming it was distance selling ? Bizarre way of doing things.

Have you made any payments / deposits ?

When was the initial delivery date meant to be ?

[R0b]

How many times was it actually delayed?

Did you at any point say that unless its delivered by X then you will cancel or any words to that effect?

Those terms look like a one size fits all for business and consumer customers but it does look like there is a get out clause in the 3rd paragraph at the beginning of the terms and conditions - that if delivery is not completed within 28 days of estimated delivery, you need to put in writing that you require the leasing company to deliver up the car otherwise the agreement is cancelled and a deposit refunded.

That seems fair enough to me but based on what you've described, that isn't what you had done in which case, it seems like you'll need to rely on something in the Consumer Rights Act.

Section 28 of the CRA relates to the delivery of goods and it says the following:

28. Delivery of goods

(6) If the circumstances are that—

(a) the trader has refused to deliver the goods,

(b) delivery of the goods at the agreed time or within the agreed period is essential taking into account all the relevant circumstances at the time the contract was entered into, or

(c) the consumer told the trader before the contract was entered into that delivery in accordance with subsection (3), or at the agreed time or within the agreed period, was essential,

then the consumer may treat the contract as at an end.

It may be that you could rely on the above underlined provision but it really depends on the facts. Was it essential for your wife to collect the car within the agreed time or did she already have a car to drive around in? If you can point to something suggesting that it was essential that the car ought to be delivered within the agreed period, then you might be able to get away with it and invoke Section 28(6).

It pays to read the terms and conditions especially before deciding to end an agreement that involves a fairly substantial amount of money. Had you done so, I think you would have quite easily been able to get out of it by relying on the contract terms.

The problem now is that if you choose to defend it, you are now (presumably) leaving it to a judge to decide for you, and that's not good because they have wide discretion when it comes to deciding whether the delay of 5 months was a sufficiently serious breach warranting your wife the right to terminate.

[gregh286]

Thanks amethyst
But the charge is coming from v4b....not finance firm. We never activated finance.
But if we took delivery and sent back next day they can activate 12.b and charge us for loss of depreciation car was registered. That kinda conflicts with section 10 on distance selling.
v4b says the dealer is charging them for cancellation and that get passed onto us....which is possibly a lie...not sure.
delivery date was June so vehicle wasn't late.

[gregh286]

I meant to say it wasn't late as never had a real delivery date...it was just left open...

Then kept dragging and dragging on. We kept asking them and they said it would be another few weeks. So essentially not late as there wasn't a promise date

[R0b]

If there was no delivery date given or agreed upon, then Section 28 of the CRA still applies, just a different sub-section.

(3) Unless there is an agreed time or period, the contract is to be treated as including a term that the trader must deliver the goods—
(a)without undue delay, and

(b)in any event, not more than 30 days after the day on which the contract is entered into.

Therefore, the failure to deliver the car within 30 days is a breach entitling you to end the contract as per the above. Their repeated promises that an extra few weeks just adds further weight that you have given them further opportunity to deliver but have failed.

Equally, you could also have an argument as the clause being deemed unfair. The Competition and Markets Authority's guidance on unfair terms says this about delays (see my underlined):

5.9.1 The law requires that goods should be delivered, and services carried out on time. Where the business has set a time in stating its terms to the consumer, it is bound to meet that deadline – where no date was set, any goods ordered generally have to be delivered within the standard 30-day period generally applicable for delivery of goods (see the table of statutory rights in part 4 above), and services must be performed within a reasonable time. A term which allows the trader to fail to meet this fundamental requirement of timeliness is liable to be considered unfair. Because of its likely impact on the consumer’s ability to rely on statutory rights and remedies – see part 4 of the guidance – it may well be blacklisted in any event.

5.9.2 This applies not just to terms which simply exclude all liability for delay, but also to standard terms allowing unduly long periods for delivery or completion of work, or excessive margins of delay after an agreed date. The effect is the same – to allow the business to ignore the convenience of customers, and even its own oral promises as to deadlines.

5.9.3 The fact that delays can be caused by circumstances genuinely beyond the trader’s control does not make it fair to exclude liability for all delays however caused. Such terms protect the business indiscriminately, whether or not it is at fault.

Blacklisted terms are treated as automatically unfair and as you can see, the CMA considers exclusion of liability to be potentially unfair to exclude liability for any delay. If there was no agreed date then you couldn't have relied upon the contract terms that you have to give notice and as such, the statutory consumer rights apply.

I think you ought to be on some solid ground assuming what you told us is accurate and correct. A well-worded letter, outlining your rights and reasons means you should be able to bat this away quite easily, and it may be that they are trying their luck.

Presumably you have the documentation that shows no agreed date (just in case they try to fraudulently add one)?

[gregh286]

If there was no delivery date given or agreed upon, then Section 28 of the CRA still applies, just a different sub-section.



Therefore, the failure to deliver the car within 30 days is a breach entitling you to end the contract as per the above. Their repeated promises that an extra few weeks just adds further weight that you have given them further opportunity to deliver but have failed.

Equally, you could also have an argument as the clause being deemed unfair. The Competition and Markets Authority's guidance on unfair terms says this about delays (see my underlined):



Blacklisted terms are treated as automatically unfair and as you can see, the CMA considers exclusion of liability to be potentially unfair to exclude liability for any delay. If there was no agreed date then you couldn't have relied upon the contract terms that you have to give notice and as such, the statutory consumer rights apply.

I think you ought to be on some solid ground assuming what you told us is accurate and correct. A well-worded letter, outlining your rights and reasons means you should be able to bat this away quite easily, and it may be that they are trying their luck.

Presumably you have the documentation that shows no agreed date (just in case they try to fraudulently add one)?

Hi Rob,
Thanks again.
We dont have any official document that shows agreed date. We have email exchanges without a firm and black/white answer.
agreement was signed on first few days of February without an agreed delivery date, we just were told would be Q2.

In April 10th we asked about status and got:
"Dear Customer,
Thank you for placing your order with V4B. We are currently awaiting a confirmed build week from the dealer. No further updates have been given from the dealer yet."

In april 26th I enquired, we got email, "due to dealer mid/late june. no fixed date."

In june 13th I enquired we got email, "Still showing due to dealer early July mate will keep chasing for you, due to dealer currently 7^th mate."

June 14th June I told them forget it, this is dragging.

On 15th they told me magically the car arrived at the dealer after been told the day before it would be July 7th, and I would be liable for penalty as the dealer would charge them for late cancellation of 15% of P11D. The 7.2K is the cost they (V4b) say the dealer is charging them.

my point is the legal binding agreement doesnt have an agreed delivery date, so in this regard Im not sure if that works in my favour or against me. But on other side of the coin it could be construed it wasnt really late cos dates were very loose.
not to mention a vehicle update on 14th June showed it 3 weeks out, yet arrived next day.

[R0b]

Hmm, well what you've said might change things - this is why we need to know everything up front and not being drip fed certain information.

I don't think you can actually say you don't have an actual agreed delivery date nor can you say it's open-ended. A reference to a Q2 delivery date to me would mean the second quarter of the year, being a delivery date of between 1 April and 30 June. It might not be an exact date but nothing I've seen as yet suggests that an exact date must be given. In fact, my understanding is that if cars are being built from new then it is not unusual in the car industry for manufacturers to give a window of time for delivery and there a due delivery date of Q2 is likely to be seen as an agreed date, it just means delivery could be at any point within those 3 months.

So I think we have to revert back to what I initially said, unless you can prove that you were entitled to terminate for non-delivery. Also I would be challening V4b by asking for the paperwork confirming the car arrived and was signed for by the dealer on 15 July. You can carry out your due diligence and if it transpires that they are lying, then that might be grounds for termination based on fraud, though it does seem very strange that the car suddenly arrive the day after you decide not to proceed.

I would also be asking for evidence that the cancellation fee is £7.5k too, if you haven't already and again, carry out some fact checking.

A lesson learnt next time you or your wife order a new car, be sure to check the terms and any cancellation rights before going off on a whim and then maybe you wouldn't be in such a sticky situation!

[gregh286]

Hi rob.
I asked them for proof of dealership arrival for car and dealership fine to them and this was response. So I think they have panicked and dropped to £1400 as most likely lied through their teeth about car arriving to dealer.


We are under no legal obligation to supply you with any of our dealership details and this agreement is not under negotiation terms in anyway what so ever, we will continue with the contractual agreement as per the previous email. We are prepared to accept reduced penalty of £1400 within 7 days.

[R0b]

I think its an easy response to that.

Whilst they are not under a legal obligation to supply any information about their arrangement with they have indicated to you that they would be charged a £7.5k cancellation fee. If that was the true cancellation fee they would have no issue providing you with the necessary evidence confirming that. Otherwise you consider the cancellation fee to be a penalty charge which is grossly disproportionate, further confirmed by the fact that they've now substantially reduced the fee from £7,500 to £1,400.

Up to you on whether you maintain your position and just repeat what has been said before, that the delivery was due for Q2 and and you were told the date was now into July. Therefore it fell outside the agreed period and you were within your rights to walk away - not only that they've claimed that the car miraculously arrived the following day (which they have on their part refused to provide confirmation of and so you consider dubious and potentially fraudulent).

Or you can try to negotiate the price to something more acceptable if you just want rid of it.