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Hello,
I have been using this site for guidance looking at other posts and using the templates. I am now being pursued by the finance company Solicitor for excess mileage charges so have joined as a member.
Background:
I recently did a Voluntary Termination after making over 50% of the payments to Porsche Financial Services (VW) on a Porsche Cayenne. It was 3 years old ( 4 year agreement) and over 50% paid so no actual arguments from them on handing the car back and ending the agreement. The car was collected by someone from BCA and their assessment of the car was that it was in perfectly reasonable condition and therefore no bill was issued or requested. I also received notification that the contract had been terminated and have a letter stating this. All good so far.
Then I received a letter from the collections department of VW Financial Services sting I owed them for excess mileage charges.
I responded with an email using the templates provided and received the following response in way of a letter:
Your Complaint
My understanding of your compliant is as follows:
You deny liability for any excess mileage charges under your solutions agreement following the Voluntary Termination, as you do not believe this is chargeable under the Consumer Credit Act 1974 once you have paid 50% of the total amount payable.
My Investigation
You refer to Section 99 and 100 of the Consumer Credit Act 1974 but have failed to note the specific section 99 (2) explicitly states that 'Termination of an agreement under subsection 1 [the right to terminate] does not affect the liability under the agreement which has accrued before the termination.'
As excess mileage is a fundamental contractual term, you are asked to predict your mileage prior to entering into the contractual arrangement and the finance is calculated taking into account the depreciation of the vehicle based on the mileage you selected. This is clearly set out in your pre-contractual information, the front page of your agreement and clause 11 of your terms.
Clause 11 is worded as follows:-
11.1 If the vehicle covers more than:
- the Maximum annual mileage in any succeeding period of 12 months starting from the making of this Agreement and/or
- the Maximum Total mileage:
you will be liable to pay us the excess mileage charge shown on page 1. That liability will accrue with each mile covered by the vehicle in excess of those mileages. You must discharge that liability by paying us on demand.
11.2 If you have paid excess mileage charges in relation to the maximum annual mileage we will deduct this amount from any excess mileage charges payable in relation to the maximum total mileage.
11.4 If this agreement terminates early, we will reduce the maximum total mileage in the proportion which the actual period of hire bears to the period of hire bears to the period of hire originally agreed. Any excess mileage charge will be recalculated using that reduced maximum total mileage.
Clause 11 is worded to ensure that liability for the excess mileage occurs prior to termination and therefore you remain fully liable for any excess mileage which is over and above that which you had originally selected. Our Agreements are drafted by leading counsel in consumer credit therefore we are confident that they are not inconsistent with the Act.
As I also pointed to to them that not only did I tell the Salesman at point of contract that I would do more miles than stated and he said don't worry about it, we will get you out before the end of the contract and it won't matter and also on 2 or 3 separate occasions VT was actually brought up by their Salesman in trying to get me to upgrade early without cost, they have directed me towards the Financial Ombudsman Service.
However they have now passed the 'debt' of excess mileage to their Solicitors, Lester Aldridge.
Any advice please?
Thank you
I have been using this site for guidance looking at other posts and using the templates. I am now being pursued by the finance company Solicitor for excess mileage charges so have joined as a member.
Background:
I recently did a Voluntary Termination after making over 50% of the payments to Porsche Financial Services (VW) on a Porsche Cayenne. It was 3 years old ( 4 year agreement) and over 50% paid so no actual arguments from them on handing the car back and ending the agreement. The car was collected by someone from BCA and their assessment of the car was that it was in perfectly reasonable condition and therefore no bill was issued or requested. I also received notification that the contract had been terminated and have a letter stating this. All good so far.
Then I received a letter from the collections department of VW Financial Services sting I owed them for excess mileage charges.
I responded with an email using the templates provided and received the following response in way of a letter:
Your Complaint
My understanding of your compliant is as follows:
You deny liability for any excess mileage charges under your solutions agreement following the Voluntary Termination, as you do not believe this is chargeable under the Consumer Credit Act 1974 once you have paid 50% of the total amount payable.
My Investigation
You refer to Section 99 and 100 of the Consumer Credit Act 1974 but have failed to note the specific section 99 (2) explicitly states that 'Termination of an agreement under subsection 1 [the right to terminate] does not affect the liability under the agreement which has accrued before the termination.'
As excess mileage is a fundamental contractual term, you are asked to predict your mileage prior to entering into the contractual arrangement and the finance is calculated taking into account the depreciation of the vehicle based on the mileage you selected. This is clearly set out in your pre-contractual information, the front page of your agreement and clause 11 of your terms.
Clause 11 is worded as follows:-
11.1 If the vehicle covers more than:
- the Maximum annual mileage in any succeeding period of 12 months starting from the making of this Agreement and/or
- the Maximum Total mileage:
you will be liable to pay us the excess mileage charge shown on page 1. That liability will accrue with each mile covered by the vehicle in excess of those mileages. You must discharge that liability by paying us on demand.
11.2 If you have paid excess mileage charges in relation to the maximum annual mileage we will deduct this amount from any excess mileage charges payable in relation to the maximum total mileage.
11.4 If this agreement terminates early, we will reduce the maximum total mileage in the proportion which the actual period of hire bears to the period of hire bears to the period of hire originally agreed. Any excess mileage charge will be recalculated using that reduced maximum total mileage.
Clause 11 is worded to ensure that liability for the excess mileage occurs prior to termination and therefore you remain fully liable for any excess mileage which is over and above that which you had originally selected. Our Agreements are drafted by leading counsel in consumer credit therefore we are confident that they are not inconsistent with the Act.
As I also pointed to to them that not only did I tell the Salesman at point of contract that I would do more miles than stated and he said don't worry about it, we will get you out before the end of the contract and it won't matter and also on 2 or 3 separate occasions VT was actually brought up by their Salesman in trying to get me to upgrade early without cost, they have directed me towards the Financial Ombudsman Service.
However they have now passed the 'debt' of excess mileage to their Solicitors, Lester Aldridge.
Any advice please?
Thank you
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