VT for a PCP and mileage charges

[pmc60]

I have recently had my car checked and picked up by the Finance Company after I requested a VT as I needed to reduce my monthly costs, & paying +50% of the contract price. I have agreed to excess charges for repairs and a missing key(£500) but they are insisting I pay excess mileage as its specified in the original contract. My limited understanding is that this is not legally enforceable under a VT(after doing some initial research) but they are insisting I pay.the excess at the agreed 0.09 p per mile and I am 20376 over the agreed miles. They have calculated this on a pro rata basis. Any guidance would be appreciated, as to my legal rights and whether this is enforceable by the finance company. Thanks in anticipation

[pmc60]

They have responded to my complaint today(this stated I did not believe they could enforce the mileage when returning the vehicle under a VT referring to the below act and the vehicle being returned in good condition and service history) as follows:

"Background

My understanding of your complaint is that you are unhappy with the excess mileage charge as you believe you are protected by the Consumer Credit act 1974. You have also stated that you have been a loyal Mercedes-Benz customer and would like to be considered.

Investigation

As part of my review, I have reviewed your comments regarding the Consumer Credit Act 1974. Whether you are returning your vehicle at the end of your agreement or by voluntary termination, as you have not exercised your right to purchase the vehicle, an excess mileage charge will be raised should you exceed your pro-rata mileage allowance.

This obligation is explained on page 1 of your agreement under 'Key Information'. The provisions of the Consumer Credit Act 1974 that cover a customer's right to voluntary terminate an agreement does permit us to include any excess mileage when determining what is not reasonable upon the vehicle's return. It is stated in your contractual agreement under '
Excess Distance' that 'If the vehicle is returned to us (whether at the end of the period of hire or on earlier termination), we will calculate the total distance travelled by the vehicle whilst in your possession (the "Total Distance")'. Your mileage allowance has therefore been re-calculated on a pro-rata basis in line with the length of time which the vehicle was in your possession.

Sections 99 (2) of the Consumer Credit Act 1974 states; 'Termination of an agreement under Section 1 does not affect any liability under the agreement which has accrued before the termination'. As your agreement was subject to a mileage allowance prior to termination and you have exceeded this allowance, the charge has been raised correctly and remains payable.

The conditions of the Consumer Credit Act do allow us to determine what is considered reasonable condition. As excess mileage has a negative effect on the vehicle's value, this is not considered as reasonable and we therefore retain the right to pursue for these monies. Mercedes-Benz have confirmed that our position remains firm in this dispute and therefore I am unable to remove the balance.

Should you have any concerns in regard to the dealership, you can raise this with our Customer Assistance Centre who specialise in dealership complaints or you can raise your concerns with the dealership directly. As we were not party to the conversation held with the dealership, we find it hard to comment on this. I will attach a leaflet in regard to the Customer Assistance Centre.

Although Mercedes-Benz appreciate your return custom, we are regulated by the Financial Conduct Authority who pride themselves on treating customer's fairly, along with Mercedes-Benz. I am unfortunately unable to consider this aspect.

For the above reasons, I am unable to uphold your complaint. I can confirm that the amount of £2,700.61 has been raised correctly and remains payable.

Next Steps

I trust that my response has now brought this matter to an amicable resolution and I would like to thank you for taking the time to write to us with your concerns. In the event that you do have any further queries or concerns, please do not hesitate to contact me on the details set out below.

I will place your account on hold for three working days from the date your final response was sent. This will allow you time to look over your response from us before payment is required. If our De-Fleet department have not had any contact from you regarding payment by this time, they will attempt to contact you and your account will no longer be on hold. Please be advised that if payment is not received, this may involve your account being passed to our collection’s agency. You can contact our offices on 0370 240 1110 or defleet@mbfs.uk.com.

As of this point, should you be at all unhappy with my handling of your complaint so far you may have the right to refer your complaint to the Financial Ombudsman Service, free of charge – but you must do so within six months of the date of this response. If you do not refer your complaint in time, the Ombudsman will not have our permission to consider your complaint and so will only be able to do so in very limited circumstances. For example, if the Ombudsman believes that the delay was as a result of exceptional circumstances."

The excess mileage represents all the above less £500 for some paint work and lost key.

I am happy to pay for the £500 charge

Thanks for your response.

[Amethyst]

That's quite a big over limit on the mileage

Have you read rachrads case at all ? https://legalbeagles.info/forums/for...larke-pls-help would recommend that

not sure where the ombudsman are at looking into these complaints but that does sound like a standard reply from mbfs so worth considering -tagging R0b for you xx

[R0b]

I'd like to see the full terms and conditions including that section the refer to under 'key information'. If they have included some wording as they have suggested, that could be a misrepresentation of law.

It takes some effort to go over your mileage allowance by that amount and from my experience, that's down to someone severely underestimating their mileage or they use their car for business purposes like i.e. a taxi. Why have you gone over so much and did you make any attempts to contact the finance co. and see if they will agree to increase your mileage allowance?

[pmc60]

That's quite a big over limit on the mileage

Have you read rachrads case at all ? https://legalbeagles.info/forums/for...larke-pls-help would recommend that

not sure where the ombudsman are at looking into these complaints but that does sound like a standard reply from mbfs so worth considering -tagging R0b for you xx

Hi Rob
Thanks for coming back to me.
I used my car more than I was anticipating when I first took it out and for business use primarily. I didnt realise I could approach MB to do that. I was paying a significant amount per month and then got to a point after 3 and a half years I was spending a lot on the car and could not afford the payments, so have downsized, again taking another Mercedes from MB and down sizing to a lesser amount per month.
I can send a copy of the contract I signed which I have just received a copy of from MB after chasing for 2 months. Would this be agreeable to you? Do you have an email address?
Thanks in anticpation
Regards
Philip

Rob-have now uploaded agreement

[jeffster247]

You might want to redact the uploaded document to remove your personal details , including the registration number of the vehicle and your address

[R0b]

for business use primarily

Based on the above, I don't really have much sympathy for you because these agreements are based on the Consumer Credit Act and you were using it primarily for business.

However that, being said, the excess mileage clause in the contract you've highlighted simply says that when the vehicle is returned Mercedes will calculate the total distance and invoice you if you have exceeded the agreed amount. Those are steps taken after voluntary termination, not before so in my view they have absolutely no leg to stand on there.

Personally, I'd tell them where to go and invite them to bring a claim because their case would be going nowhere however, it is entirely up to you. Also you may want to redact your PDF it has your driving licence on there.

[pmc60]

You might want to redact the uploaded document to remove your personal details , including the registration number of the vehicle and your address

Rob-thanks for your feedback on the above. I have taken the PDF off the site. Can you explain "...the excess mileage clause in the contract you've highlighted simply says that when the vehicle is returned Mercedes will calculate the total distance and invoice you if you have exceeded the agreed amount. Those are steps taken after voluntary termination, not before so in my view they have absolutely no leg to stand on there." Why would they have no leg to stand on? I dont understand. I cannot see the agreed mileage of 10,000 in the contract either? Would the court case* between Mercedes Benx V Cahalane in Feb 2018 be worth referring to ? Doi you act on behalf of Cahalane which Cahalane won? I note this was an HP agreement and mine is a PCP agreement. Does this matter? Thanks in anticipation of* your further advise . Regards

[R0b]

Because s.99(2) says liability does not affect arrears accrued before termination whereas the excess mileage charge is calculated by Mercedes after termination, I don't think I need to say anymore?

Are you sure you have checked the contract properly there will almost definitely be a clause in there that talks about excess mileage charges. PCP agreements are still a hire purchase agreement just a variation of it.

I've recently updated the VT guide and should contain everything you need in there to deal with it yourself until you get to the legal proceedings stage.
https://legalbeagles.info/forums/for...on-your-rights

[Almayo]

Rob. I am also confused on the whole before and after meaning. Can you put it in to lay man terms

[R0b]

Rob. I am also confused on the whole before and after meaning. Can you put it in to lay man terms

The contract is terminated before the charges are invoiced, due and payable.