Mercedes Benz VT -

[mfranks1986]

Hi All,

Im currently doing a voluntary termination on my Mercedes C-Class.

I had a 4 year agreement @ 10,000 miles per year, (my vehicle is on 43,364 miles at 42 months of ownership in a 48 month agreement).

I wrote the VT letter using the template provided on here and other sites (citizens advice), Mercedes did send me their own VT pack to sign as I spoke to their finance department to ensure that I had paid at least the 50% amount before I started the process.

I did not sign any of the voluntary termination pack that Mercedes sent, but I did use their prepaid enclosed envelope to send my own VT letter back to them.
Amazingly, after reading many threads on here, Mercedes contacted me fairly quickly, especially considering the lockdown restrictions were still in place.

I sent my VT letter to them on the 30th May 2020, and they responded to me with an email stating my agreement had been terminated due to receiving my VT document (it was just a simple one page letter), on the 9th June 2020.

I am currently sitting waiting for the BCA agent to come and collect my car today, 19th June 2020.

I have taken photos and videos of all documents, both keys, locking wheel nut, V5, service receipts, MOT; and a video of the exterior and interior of the car, along with photos showing front, back and both sides. I have thoroughly cleaned and polished it, put leather balm on the seats, the full monty.

From reading the many threads on here, once the BCA collection agent has been, I will also refuse to sign his/her damage report after inspecting the vehicle.

I will update all on here as to what happens next, and all and any correspondence that I receive.

Any tips from anyone, especially the experts like Rob, it would be greatly appreciated.

[mfranks1986]

The BCA agent came this afternoon and spent around half an hour going around and through the car with an ipad, videoing and photographing everything. He did paint thickness checks to ensure no hidden crash damage, and I went through all of the documents, keys and made sure he had the locking wheel nut.

He then showed me what he had found and went through the damage analysis report with me. He had taken close up photos of stone chips on the front panel, and a scratched alloy wheel.

He showed me the overall cost of all damages incurred, £0.00. Which considering the scratched alloy was quite bad, and in my opinion far beyond the allowed damage, amazed me.

He then went on to say that I didnt need to sign anything, but that was mainly down to covid-19 restrictions. I would have refused to sign anyway.

He has emailed me a one pager saying that costs incurred are zero.

He did not mention anything regarding the mileage, but I guess that will be down to Mercedes.

I will now wait and see what, if anything, I get from Mercedes.

[mfranks1986]

I have received an invoice from Mercedes-Benz Finance asking for a payment of £813.24 for excess mileage.

All other charges are zero.

I now need to know how to respond to Mercedes, obviously I dont wish to pay the excess mileage charges, and would therefore like to argue the costs.

Any help would be greatly appreciated.

R0b*

[R0b]

The VT guide has everything you need to dispute the charges. Or your other option is to pay up.*

A guide to voluntary termination: Your right

[mfranks1986]

I used the excess mileage letter from the VT guide to dispute the charges from MBFS.

I have received a response detailed below:
Thank you for getting in touch and giving us the opportunity to investigate your concerns.

My understanding of your complaint is that you are disputing your end of contract charges for excess mileage. You have voluntarily terminated your vehicle and believe that as you have paid over 50% of the lease agreement, you are only liable for half the excess mileage charged.

I am sorry that you’re unhappy with our service and I’ll do my best to put things right for you.

I’ve recorded your complaint and given you a unique complaint reference number ----- Please quote this number if you need to contact me.

I will now begin investigating your complaint and aim to provide you with a full response within 15 working days. Whilst I will endeavour to provide a response within this time frame, due to the nature of certain cases this is not always achievable. I will however look to make further contact with you should I require any additional information to assist in my review of your complaint.

In any event, I will provide you with a full response within 8 weeks of the date on this email. If I am unable to provide you with a full response by this date you may be able to refer your complaint to the Financial Ombudsman Service and further information on this point can be found on our Complaints Process, a copy of which I have attached for your reference.

I trust the above has provided you with the reassurance that I am investigating your concerns and in the meantime, should you have any questions, please do not hesitate to contact me on:

In the meantime, should you have any questions, please do not hesitate to contact me on:

What I am confused about, is why they think the my initial letter meant I thought Im only liable for half the excess mileage charged. Ive read the letter on the VT guide many times, and it mentions nowhere about half the excess mileage charge.

Before I respond to correct them, is this some sort of trap? Are they trying to get me to agree to half the excess mileage, or do they just want to me engage in a back and forth email conversation?

Please help.

Mark

R0b Kati

[mfranks1986]

Well after this forum going pretty dead on advice, Ive ended up paying Mercedes.

[pt2537]

Why?

The information you need is on here, its a case of reading through the info, if you get stuck you can always private message someone to help. We dont give advice by pm but if you ask one of the team will look at your thread and advise where they can.

Sadly we all have lives off the forum, so its difficult to follow everyone around and answer their questions immediately. The forum is a self help forum not a law centre.

[mfranks1986]

I posted a post regarding a reply from MBFS and asked a question, I got no response.
I dont know each team member and therefore would not know which someone to pm for advice, I tagged two people that I have seen respond to many other posters, but I didnt get any reply, or seemingly was my question forwarded to anyone that could help.

Ive read and re-read the entire VT guide many times, but as not being a legal professional, it can only help so much without being personalised to each individual case. I do really appreciate the forum and that of course people have lives away from it.

Could you please have a look at the last message from MBFS below, I read it as I have no option other than to pay the excess mileage fee.


Thank you for your patience while I have investigated your concerns. I am writing to let you know that I will not be upholding your complaint for reasons I will now explain.


Background

My understanding of your complaint is that you are disputing your end of contract charges for excess mileage. You have voluntarily terminated your vehicle and believe that as you have paid over 50% of the lease agreement, you do not want to pay the excess mileage charged.

Investigation

As part of my review, I have attached copies of your invoice, agreement and your letter advising you wish to Voluntary Terminate your vehicle (VT).

You have been charged an excess mileage of £813.24, this has been calculated on a pro-rata basis due to your Voluntary Termination. This meant that you had a reduced mileage allowance of 35,834 miles. You returned your vehicle with 43,364 miles recorded. This was an excess of 7,530 miles x 0.09 pence per mile = £677.70 + £135.54 VAT = £813.24. This has been correctly raised and charged.

You had qualified to VT your vehicle by paying over 50% of the lease agreement. This enabled you to return your vehicle early, however, this did not entitle you to not pay the end of contract charges. Whether you are returning your car at the end of your agreement or upon use of the Voluntary Termination (VT) clause, as you have not exercised your right to purchase the car, an excess mileage charge will be raised should your return mileage exceed your total mileage allowance. This obligation is set out within the first page of your agreement, under key information. The provisions of the Consumer Credit Act that cover a customer’s right to VT their agreement do permit us to include any over mileage when determining what is 'not reasonable' upon the cars return. It is stated in your agreement under ‘Excess Distance’; ‘If the vehicle is returned to us (whether at the end of the period hire or an 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 you have had the vehicle in your possession

I would also like to kindly refer you to S99 (2) Consumer Credit Act 1974 where it states:

‘Termination of an agreement under S (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 the allowance of 35,834 miles, the charge has been raised correctly and remains payable.

The conditions of the Consumer Credit Act do permit us to determine what is considered reasonable condition. As excess mileage has a negative effect on the value of the vehicle, this is not considered reasonable and Mercedes-Benz therefore retains the right to charge for this following the voluntary termination of an agreement.

Whilst you have sent in your own letter to VT your vehicle, on the original documentation we sent you it stated the following:

"I understand by voluntarily terminated my agreement, my credit file will be updated to reflect this and other lenders can also view this information I also understand that my vehicle needs to be ready for collection when BCA contact me to arrange collection within 5 working days of termination. I understand I am responsible for insuring the vehicle up to the point of collection I also understand that I will be liable for any damage or pro-rata excess mileage charges after inspection of the vehicle."

To aid me in my investigation I have been in contact with our Head Office and passed on your comments regarding your interpretation of the above provisions. Head Office have advised that as per your signed lease agreement you are in fact liable for the charges which have been raised.

Page 1 of your agreement states the following "If you do not exercise your right to purchase the vehicle (including if the agreement terminates early for any reason), an excess distance charge will be payable at the rate of £0.09 pence (plus VAT) for each mile, by which the total distance travelled by the vehicle at the end of the period of hire exceeds the allowed distance, calculated at a rate of 10,000 miles per year, pro-rated for part years".

Subsection 2 of Section 99 of the Consumer Credit Act 1974 (CCA) states "Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination".

The liability regarding excess mileage was accrued before termination of the contract, i.e. at the point you signed your agreement. Head Office have confirmed that the Mercedes-Benz position in this regard remains firm.

Your balance remains £813.24.

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, meaning the hold will expire on the 17th August 2020. This will allow you time to look over your response from us. If our De-Fleet department have not had any contact from you regarding your account by this time, they will attempt to make contact with you. Please be advised, this may involve your account being passed to our collections agency. Please contact our offices on 0370 240 1110 to discuss payment options.


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.

[pt2537]

MBFS lost a case on the excess mileage charges. They do not crystallise before termination contrary to their suggestion as confirmed in the Calahane case. To suggest that the excesss mileage charge constitutes a failure to take reasonable care of the goods is a laughable comment. If you drove 160,000 miles then yes it would devalue the car of course, but if you go 5 or 6k over it doesnt.

their reply is laughable

[mfranks1986]

Thanks you for your reply. Looking through passed posts, especially where MBFS are involved, would it be pertinent to send the response below (lifted from a previous post on here).


Dear Sir or Madam,

Thank you for your email.

In your latest email, you refer to Section 99(2) and suggest that the excess mileage charges accrued prior to termination of the agreement - I disagree. I should point out that that argument was relied upon before Deput District Judge Ellington in the County Court case of Mercedes-Benz Financial Services UK Limited v Cahalane (Willesden County Court, Feb. 28, Claim No. D1CD9N5D). DDJ Ellington rejected Mercedes' argument that the excess mileage charges were rolling throughout the contract on the basis that the excess mileage charges do not accrue at any point in which the mileage was exceeded, but those charges only crystallised on termination of the contract. Her reasons were that:

(a) the factual interpretation of the agreement itself and in particular to the natural reading of the first page which has a heading "default charges";

(b) she was bound by the authority in Julian Hodge Bank v Malcolm John Hall; and

(c) in any event the definition of "total price" as set out in Section 189 of the Consumer Credit Act 1974 excludes any sum payable as a penalty or as compensation or damages for a breach of the agreement and that excess mileage charges do not fall to be included within the definition of total price. DDJ Ellington further supported this point by refering to the wording in the agreement where it states "Termination: Your Rights" which goes on to say that you are only entitled to half the total amount payable as wel las the return of the goods.

The email goes on to say that the Consumer Credit Act allows you determine what is considered a reasonable condition and that because excess mileage has a negative effect on the value of the vehicle, Mercedes is entitled to seek reocver of that lost value. In response to this point, I should point out that the Consumer Credit Act does not allow Mercedes to determine what is and isn't considered to be in a reasonable condition. On the contrary, the duty for the hirer to take reasonable care is an objective one and not, as you suggest, subjective.

It is my understanding that your argument in respect of the vehicle's value is essentially a claim for economic loss, however, the duty to take reasonable care under Section 100(4) is a tortious duty. Put simply, duties in tort are primarily fixed by the law whereas in contract, they are fixed by the parties themselves. I would refer you to a point made by Lord Justice Greer in Jarvis v Moy Davies Smith Vandervell & Co. [1936] 1 K.B. 399 where he stated:

"... where the breach of duty alleged arises out of a liability independently of the personal obligation undertaken by contract, it is tort, and it may be tort even though there may happen to be a contract between the parties, if the duty in fact arises independently of that contract. Breach of contract occurs where that which is complained of is a breach of duty arising out of the obligations undertaken by the contract."

As the duty under Section 100(4) is one of tort, I would also point out that claims for pure economic loss are not recoverable. That poisiton was made clear in White v Jones [1995] 2 A.C. 207 when Lord Browne-Wilkinson said:

"The law of England does not impose any general duty of care to avoid negligent misstatements or to avoid causing pure economic loss even if economic damage to the plaintiff was foreseeable."

In my view, the suggested reasons by Mercedes that excess mileage charges can be recovered are simply flawed in that such arguments have previously been dismissed in court and/or the current law makes it clear that pure economic loss is not recoverable.

I think my position is made clear by the contents of this email but just to be certain, I do not consider the excess mileage charges to be recoverable nor do I intend to pay them. You may wish to consult with your legal team as I am sure they will be aware of the County Court decision I mentioned above.

Now that you know where I stand, I do not expect to hear back from Mercedes in relation to this matter unless the intention is to commence legal proceedings, in which case I expect Mercedes to follow the appropriate pre-action protocols and any claim will be defended with reference to the above case law.

Regards,

[R0b]

I don't see what use it is sending any further response. You said in a previous post that you have ended up paying MBFS so that's the end of things.

[mfranks1986]

Hi Rob,

I wrote that post just as I was going to pay them after receiving the MBFS email that I posted above. It was a last resort to try and get some further advice/ help.

I have now sent the response that I copied above in my last post, albeit with the spelling mistakes corrected.

Do you think that was the correct response to send?

R0b pt2537

[R0b]

I haven't posted because there's nothing more than I can say or do to make this go away, there is no magic cure for this sort of situation - you either have to stick with it our or pay up.

Nothing comes without risk and it is possible that MBFS may take you to court but I'm guessing the fees they are asking for is somewhat lower than the one they took their chances on at court, and lost.

You have 3 options:

1. Pay up.

2. Tell them you aren't going to engage with them any further and if they feel confident that they have a legal right to recover those damages, invite them to issue legal proceedings and let a judge decide. Otherwise stop harassing you and demanding payment when they know what your position is and you aren't willing to pay up.

3. Continue to play ping pong correspondence and waste your time.

Happy to assist where I can if legal proceedings are issued, but until you get to that stage, your case is like everyone else's on here which is back and forth correspondence and I don't think it's necessary for me to regurgitate the same responses that are already well documented on the forum.

[Guest]

Hi Rob,

I wrote that post just as I was going to pay them after receiving the MBFS email that I posted above. It was a last resort to try and get some further advice/ help.

I have now sent the response that I copied above in my last post, albeit with the spelling mistakes corrected.

Do you think that was the correct response to send?

R0b pt2537

Hi MFranks. Pls could you share an update - Im about to VT my MB and am interested to know how you fared please. Thanks Dave

[Guest]

I haven't posted because there's nothing more than I can say or do to make this go away, there is no magic cure for this sort of situation - you either have to stick with it our or pay up.

Nothing comes without risk and it is possible that MBFS may take you to court but I'm guessing the fees they are asking for is somewhat lower than the one they took their chances on at court, and lost.

You have 3 options:

1. Pay up.

2. Tell them you aren't going to engage with them any further and if they feel confident that they have a legal right to recover those damages, invite them to issue legal proceedings and let a judge decide. Otherwise stop harassing you and demanding payment when they know what your position is and you aren't willing to pay up.

3. Continue to play ping pong correspondence and waste your time.

Happy to assist where I can if legal proceedings are issued, but until you get to that stage, your case is like everyone else's on here which is back and forth correspondence and I don't think it's necessary for me to regurgitate the same responses that are already well documented on the forum.

HAPPY 2021 - pls can you share an update on your case, thanks