PSA Finance - Voluntary Termination charges help

[Venxai]

Hello,

In November I handed my car back to Mainheim auctions after voluntary terminating my agreement. I was hit with £364 in charges for wear and tear, it was a 2016 Peugeot 108. After being hit with these charges, I sent this email to them with use of a template from LegalBeagles as shown below:

"I am writing to you with reference to the above matter and your letter dated 06/01/2020 concerning the charges raised for damage you alleged state was caused whilst the vehicle was in my possession.

The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore I do not accept liability for the sum of £364.00 that you are claiming to be owed. I would refer you to the Court of Appeal case*Brady v St. Margaret's Trust*[1963] 3 W.L.R 1162 which was concerned with the extent of a hirer's duty to take reasonable care of the vehicle. On that point, Lord Denning stated the following:

"There should be evidence by the hire-purchase company to show the condition of the goods at the time the agreement was made and to show how far the hirer has defaulted under it. 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."

Therefore, the onus is on you to prove that the damage to the vehicle was specifically caused by me during the time that I had it. Photographic evidence was taken prior to the vehicle being collected and it was regularly serviced in accordance with the manufacturer's guidelines and the agent who examined the vehicle commented in particular that the vehicle was in great condition given the age and mileage of it.

Furthermore, the condition report issued by Manheim does not prove that the damage was sustained during the period of time that it was in my possession, rather it simply lists the damage. There is no evidence to suggest that the damage had occurred whilst it was in my custody. I am confident, however, the evidence is non-existent and allows me to relate back to my contract of agreement which 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. You will then be entitled to return of the goods and to half of the total amount payable under this agreement, that is £5,109.06. 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." Therefore your claim for damages and charges is entirely hopeless.

Notwithstanding the above, I am prepared to pay a reasonable sum of £70.00 in full and final settlement all claims in connection with this agreement. The offer will remain open for a period of 14 days but if I have not heard from you by 7th February 2020, then the offer will automatically expire. Please note that this is a one time offer only and in the event that offer is not accepted, no further offers will be made.

I look forward to hearing from you in due course.

Yours faithfully,"



I have now received a reply in letter from PSA finance on 10th February which is attached to this forum post.

I honestly don't know where to go from here, and I do not want to pay the charges as I believe the car was handed back in a reasonable condition plus I don't have the funds to do so anyway. Please can I have some guidance in relation to this matter, and what I should do next as I'm stuck.


I hope you can help.

Many thanks

[R0b]

3 options: pay up, ignore them or invite them to take the matter to court.

[Venxai]

3 options: pay up, ignore them or invite them to take the matter to court.

Hi R0b, thanks for the reply. I mean, they've already threatened me with the 'we've given you over to the debt collectors now' - what would happen if I ignore them? What would also happen if I invite them to take the matter to court, because I know court costs a lot so I wouldn't be in a good position to even do that if they agreed to.

[R0b]

First of all, debt collectors have zero powers of enforcement, they are bottom of the chain companies designed to harass you for payment but nothing more than that.

As for ignoring PSA altogether, I don't know what they would do but the worst case scenario is that they take you to court and will then have to prove that they are owed that money. However, don't see that as a bad thing because that also gives you the opportunity to defend yourself.

Legal proceedings these days from start to finish is average 6-8 months and sometimes longer depending on how busy your local court is. Given the amount involved it will likely end up being allocated to the small claims track and so costs are extremely limited, meaning if you lose you don't pay for legal costs. Successful claimants are entitled to have their application fees repaid which is based on the amount being claimed - so if they are seeking £364 then then if they won, they would be entitled to £50 issue fee and £55 for the hearing fee.

So in those 6 to 8 months of time is there not a way for you to put some money aside each month to cover this amount just in case something comes up? Do you not have some extra money available having terminated the agreement and no longer have a need to pay for the instalments?

Having said all of this, you should have really done your homework first before exercising your VT right, because there's plenty of advice online and on this forum. You are up against a finance company who sole reason for existing is to make money, so you would be naive if you were thinking they wouldn't make any attempt to claw back whatever monies they could.

Fortunately, I am not aware of PSA ever issuing legal proceedings but that isn't to say they won't do it. Lenders are not in the business of chasing bad debt so they usually sell it on to a debt purchasing company who might instead choose to issue legal proceedings. Whatever happens, you would be wise to keep all paperwork and correspondence for the next 6 years.

[monty251]

Hi R0bsorry to tag you in here.. It seems the guide document link is broken. EDIT: got it