BMW Financial Services - Voluntary Termination/Excess Mileage

[Antdo492]

Hi!

First of all, Stuckcluckets well done for your perseverance, I haven’t seen a recent update from you and I hope that your situation has been resolved amicably?

I came across this article while reviewing information online regarding VT as am debating doing this with, would you guess it... BMW FS!

My wife has done this previously with Audi FS (Volkswagen) and she was not hassled for any cost in relation to excess mileage that said, it would seem to be very different on here.

Now I am not a legal professional, but I do have some limited understanding of contracts…

My contract is: Hire Purchase Agreement Regulated by the Consumer Credit Act 1974

On my contract there are sections relating to

Termination

“you can terminate this agreement at anytime before your final repayment falls due by giving us written notice. You will have to return the Vehicle and pay

1. Any arrears and any other sums which have become payable under the agreement before the termination (including any Excess Mileage Charge), plus
2. The amount (if any) by which one-half of the total amount payable exceeds the aggregate of the advance payment and repayments you have paid, plus
3. If you do not return the Vehicle in good repair and condition the sum required to compensate us for this. This will be your maximum liability if you comply with these requirements.”

And

Termination: Your Rights

“You have a right to end this agreement. To do so you must write to the person you make you payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £XX,XXX.XX. If you have already paid at least this amount plus any overdue instalment and have taken reasonable care of the goods you will not have to pay anymore.”

BMW FS own agreement stipulates this and even says you will not have to will not have to pay anymore.

Now! Both these items are in the contract and clearly contradict one another, but there is an amount defined under your rights with the contract. As such when executing a VT should you refer to this element of your contract? Additionally, if the VT is agreed/complete prior to the excess mileage charge cost being issued they them selves have no path to claim inline with their own contact?

I’m not sure where the “risk” is if you were to go to court? This is only binding document you should regardless of what is issued you when you VT the vehicle. The people on here seeking (like me) are not contract/legal experts and as such this should your favour. Its black and white in the agreement with your rights under the Consumer Credit Act 1974

If you have already paid at least this amount (50%) plus any overdue instalment and have taken reasonable care of the goods you will not have to pay anymore

This is all my simple view…

I did debate a part EX with BMW for a new car and I think my biggest gripe is how the charge is worked out? There seems to be an element of “double dipping”.

I have found that when speaking with BMW about swapping my car for a new one I would have to pay the negative equity on the vehicle based on its current miles as well as the excess charge…

This is worked out by valuing the vehicle at the time of interest and additional charge (excess mileage), the condition of the vehicle also plays a role here, mine is in very good condition other than a scuff on a wheel.

So! BMW advised me as follows (I am going to make some cost up so my point can be seen and relate this back to my current mileage on a proportional basis).

My agreement was for 12000 miles a year and a 48-month term. Total mileage is 48000 miles.

At 36 months I should have done 36000 but actually have done 63000 miles resulting in a 27,000-mile difference which at 0.0934 pence per mile works out to £2,521.80.

Assume the settle figure is £12,000.00

Now BMW valued the car on its current mileage at £10,000.00
Which is £2,000.00 short of the settlement figure. Then advised my that I have pay the excess mileage despite already depreciating the value of the car already.

I advised them that the current value of the car should be work out on the proportionately @ 36000 as they were already going to bill for the excess miles, and they had worked it out on a proportional basis.

Again in theory if they did it this way my car would be worth £14,000.00. £2000.00 in positive equity meaning I can use this to cover a portion of the excess mileage charge.

Boring and I hope it makes sense but for anyone considered a part EX with excess mileage. Don’t be duped by these corrupt salesmen.

I intend to VT my car similarly to the way me and my wife VT’d our Audi next month stipulating Termination and my rights element of BMW FS Agreement (As was the same with Volkswagen), hopefully I will not be met with the same obstructiveness but if worst comes to worst I am prepared to settle (with negotiation) as I believe (not everyone shares this view) there should be some good morals applied. I should have only done X number of miles and I have gone over…
My professional circumstances changed which is why this occurred… S**t happens…

[Bass Player]

scotstoun

What a helpful chap you are to take your own time out to engage in substantial arguments with no motive what-so-ever.

I never understood why anyone pays debt collectors. Once the finance companies have given up the debt collectors can simply be ignored. Once you’ve blocked the number it’s just a case of recycling the letters.

[GreggM]

My last post on this....

I am not looking for any validation especially not from your good self.
There are other avenue's outwith of consulting a lawyer.
BMW are currently under investigation after receiving many complaints regarding excess mileage.

Its not as clear cut as you make out my friend......

[scotstoun]

^^ You're on here seeking validation for your decision to not pay excess mileage charges, and are clearly annoyed that I'm not giving you the validation that other contributors are.

Don't pay it then. It's your dilemma and your future, not mine. You're obviously unsure of what to do, so go and pay £200 for some initial legal advice on the matter... Personally I'd always value advice from a qualified and experienced law professional over that given by someone on an internet forum who struggles with grammar and punctuation.

I'll bow out of this topic now, and I suspect that in due course you will also bow out when reality eventually dawns.

[GreggM]

You seem very black and white yourself, you sure you don't work with a BMW!

Good luck in your line of work, i can only imagine you must take great pride in what you do.....

[Phaeton]

NH, you say BMW FS aren't above the law.... you're absolutely correct, however they DO operate within the law

That has yet to be proven, personally I don't think they are, I believe they are using their own interpretation which may not be exactly what the legislator intended. But only a court case with prove it.

[scotstoun]

GREGGM and NH1011, I could repeat the same stuff I've said over the past week or two, but I'm already going round in circles. You want 'user friendliness'... as long as it's to your benefit it seems. NH, you say BMW FS aren't above the law.... you're absolutely correct, however they DO operate within the law as you're going to find out. Enjoy your arguments with the finance companies and the future consequences.

[Nh1011]

scotstoun the deliberate abuse of voluntary termination isn't anyone's problem but the finance companies. I have a bill for over £3,000 in excess mileage charges and I won't be paying a penny of it. BMW or any of the other finance companies aren't above the law.

[GreggM]

Scotstoun,

I take your point on the balanced argument and i do see some sense in what you are saying.

On the 'pro rata' calculation I think we will have to agree to disagree.

The amount BMW FS are chasing me for is petty (expensive enough to me) considering the money they have made over the course of my agreement. I appreciate they have to claw back something if the cars value has been hammered with excessive mileage, but there are so many variables to what is excessive comparative to residual value.

I could agrue that depending on the day at auction, even down to the extras fitted to the car will dictate the cars value on that day, not some parkers guide to a 'generic' car, which is what they are basing the 'pro rata' calculation on.

In my circumstance I really dont think their charge is fair, i am sure you would add thats what i did sign for, but its certainly not what I would have signed for in hindsight.

Their underhand way of trying to make you pay, by putting marks on your credit file does nothing to make me want to buy another BMW, in fact quite the opposite.
I did try to come to an arrangement about the charges, but there was no leniency what so ever, in fact the women at BMW FS was down right rude.

I know they are a business and at the end of the day its all about money, but being a bit more 'user' friendly certainly helps you achieve a better loyal customer base. Which in turn brings in more money.

There seems to be a mounting number of complaints against BMW (source ombudsman). Maybe they are big enough not to care, who knows, but thats bad business in anyones book. I certainly wouldn't be in a rush to buy another BMW even although it was a great car. Maybe being bit more sympathetic towards individual cases is the way forward rather than a black and white approach.

Gregg

[scotstoun]

Hi Gregg. My 'angle' is simple... There's many people who post on forums that you can play the system and avoid excess mileage charges by VT'ing a PCP, but as you look further on in the forum topic, the OP invariably 'vanishes'... I assume they have decided to pay the charge (that they agreed & signed a contract to) after all. Meanwhile other contributors are keen to chip-in and encourage people not to pay, to argue their case, and to take the car finance companies to court... talk is cheap when those contributors don't have to put their money where their mouths are. I felt that a bit of balance was required, and having seen it from the 'other side' so to speak, I made my initial post. People can question my motive for posting if they like, but will ultimately (as with everything else in life) choose to believe the person who tells them what they want to hear.

Yes, Rob quotes a successful defence a PCP customer had in a case brought by MBFS, but that would have been in the county court. MBFS obviously decided not to appeal, I don't know the details of the case, whether there was any element of mis-selling or whatever that resulted in the judgement, but the important thing is that it's only ONE county court case and doesn't set a precedence for other country court cases.... where these claims are invariably heard. MBFS, BMW FS and the rest wouldn't be going to the hassle and expense of pursuing any of these cases if they weren't being successful, and having worked in debt collection I know that the MBFS case is a very rare occurrence.

I'm not sure why you feel aggrieved at BMW FS. If your initial contract with them was the same as my wife's one for her X6 then it states that mileage will be pro-rata'd in the event of early termination. Your mileage might vary monthly, but that's irrelevant to it being pro-rata'd... it's your problem, not BMW FS'.
Secondly, how BMW FS (or any finance/fleet company) choose to dispose of end-of-term vehicles is entirely down to them. If there's demand from dealers, sometimes finance companies will trade vehicles straight on to dealers. More often than not, the finance companies put the cars straight to auction... they're finance companies, not car dealers, so are only interested in 'the numbers'. Transportation, storage, advertising, fielding phone-calls from potential buyers, arranging viewings, test-drives etc is not the business they're in. Sometimes the car will sell for book value, other times it will sell for above or below book. It all balances out in the end for the finance co. BMW FS are NOT writing-off any losses due to excess mileage. They're charging YOU for the excess mileage in relation to the age of the car/AGREED mileage, knowing that the car will achieve a lower price at auction than it would otherwise achieve had you kept within your agreed mileage allowance. At 4 years old, my wife's car will be worth £110 less in value for every 1,000 miles travelled over and above 'book'/average. BMW FS are not a charity and are not in the habit of giving people extra free usage of their cars.

I don't get this sense of entitlement that some people have, where they think that a car finance company somehow owes them something. The ONLY people the finance companies have a duty to is to their shareholders.... You are of course free to invest if it's a public limited company and therefore benefit yourself.

To clarify one thing... I'm not against anyone challenging a finance company, but if you're challenging an excess mileage charge upon VT'ing a PCP, don't expect any sympathy when the finance company attempts to hold you to what you've signed up to. Costs, hassle, damaged credit-ratings, wasted time, difficulties in obtaining credit in future - it's down to you. And if you do screw the finance company and they decide that the cost of pursuing you is more than they're due to collect, they'll just write it off and offer you less attractive terms should you ever take out any future finance agreement, thereby recouping their money that way. If you finance a car from another marque, their finance company will check your credit score and when they see the trouble you've had with BMW FS, they will similarly offer you less attractive terms with the expectation that you'll play games at the end of the contract. Either way, they win, you lose, and across all the customers throughout the UK who are financing vehicles, it all balances out for them regardless of whether a tiny minority of customer try to play the system. We're all big boys & girls so feel free to take whatever course of action you like.

[GreggM]

Scotstoun,

I would like to add that of course there are people out there that 'play' the system, but there are people on here that have genuine concerns about how these finance companies behave.

I can only speak for myself but the way BMW FS have behaved with my PCP agreement has been poor.

I was not out to 'cheat' the system in anyway but seem to have fallen foul from it.

On a personal note, when i returned my BMW i had spent considerable time and money to present the car back to BMW, so i would not get charged any fees. In fact the guy that collected the vehicle commented on how well the car was kept!

To my surprise after around 4 weeks I received a letter stating i was over my mileage allowance, which surprise me, as it was under the annual agreed mileage, it was calculated using this 'pro rata' calculation which i think is what makes these PCP agreements so unfair. I mean not all people do the same equal mileage every month?

Thats my first bone of contention with my PCP.

Secondly, which might seem trivial but i cant help but pick up on, is the fact that when BMW took the vehicle back it goes to the BCA, it isn't returned to a BMW forecourt. Any value the car has lost through this 'pro rata' calculation would be further lost through the car going to an auction, and potentially on the day could lose thousands!

So BMW chase these 'pro rata' calculation costs, yet are quite happy to write off any loses off it going to auction.

Or am I missing something here?

[GreggM]

Scotstoun,

Whats your angle?
Are you a concerned member of the public, conncerned we are all being duped on a legal advice forum?

Your intentions seem questionable here IMO.....

[R0b]

I don't think we will ever reach an agreement scotstoun and that's fine by me, everyone is entitled to their own opinion. You keep referring to incorrect advice being given on this forum but you've yet to provide evidence that what I am saying is wrong, despite a County Court decision confirming my position. You don't need to know the facts and intricate details of the case, the real fact is that MBFS tried their luck, had a fairly decent defence and lost. I don't disagree that there will be finance companies who obtain judgments for excess mileage charges but that could be due to a number of reasons, such as the debtor filing a poorly-worded defence or burying their head in the sand. Other occasions may be that the debtor doesn't wish to go to court and would rather settle the case.

None of the above means I am wrong. There is no legally bidning authority on the point of excess mileage but if you care to read the relevant provisions of the CCA, I think you'll find the wording pretty clear cut. I could think of a handful of ways that finance companies could recover excess mileage charges by tweaking the contractual terms but I have yet to see them incorporated and that's not the debtor's fault.

I would have given you more credit had you actually made a valid point but I can't see anything you've written to support the fact that excess mileage charges are enforceable. You still haven't answered my question about why the excess mileage charge isn't a charge per se.

As you said, we could go on and on about this but we won't agree. Yes, it's my own interpretation of the CCA but you could say the same thing about finance companies. The only difference is that there is a fairly decent level of supporrting evidence as to why excess mileage charges are not recoverable.

I don't really have anything further to say but feel free to carry on if you like, I'm just unlikely to respond.

[Phaeton]

Another question for you scotstoun seems as you know all the answers can you quote a case where you have personally chased a debt for the non payment of excess mileage that was the result of a court case?

[JazzJPH]

Just a quick update from my side, as the originator of this thread...

I decided to make BMW FS a without prejudice, "full & final settlement" offer following their offering me a 50% reduction the last time I spoke to them on the phone. I wrote them a very clear letter explaining that I would agree to pay 50%, but only if the following terms were met:

• Neither BMW Financial Services (GB) Limited nor any associate company (including Debt Collection Agencies) will take any further action to attempt to enforce or pursue the alleged balance owing in any way whatsoever and that I will no longer accused of any liability
• BMW Financial Services (GB) Limited will report to all credit reference agencies (Experian, Equifax, CallCredit etc.) to ensure that they update their records to display the account as closed via way of full and final settlement with a balance of £0.00 owing
• BMW Financial Services (GB) Limited will report to all credit reference agencies (Experian, Equifax, CallCredit etc.) to ensure that they correct their records to remove all previously reported missed/late payment entries and amend the account history to show Account Status “0” (Payment up to date) for every month since the account opening, including the months following the date of Voluntary Termination

They came back to me fairly promptly, via email, saying that they would not accept my terms. They explained that, they would accept a payment of 50% of the total alleged balance, but only as a "partial settlement". They said that upon receipt of this sum, they would update credit reference agencies to show the account as partially settled with a balance of £0.00, but they would not remove any prior negatives (missed/late payment entries). They've decided to play hard ball as well, giving me just a few days to make a decision. They had the audacity to refer to their acceptance of a 50% payment as a "goodwill gesture" on their part. Disgraceful.

The only reason I even considered paying 50% of the alleged balance was to ensure that BMW FS corrected the false information that they have submitted to credit reference agencies. If they're refusing to do that, then where's my incentive to pay? Either way, I need to take them to court to get the incorrect information removed.

If you have any advice at all R0b, it'd be much appreciated.

stuckcluckets is this situation resolved yet?