BMW Financial Services - Voluntary Termination/Excess Mileage

[scotstoun]

We give up our time to assist those who cannot afford to pay for legal advice...


why is it that we are not seeing legal proceedings issued by the many who post on here?

^^ You've answered your own question.

With regard to Santander trying to record a Default on your credit record for not paying collection charges, the simple answer is that a 'collection charge' in itself is not integral to the item being purchased whereas excess mileage is. Using your reasoning, the BMW my wife currently has on a 4 yr PCP with a 44,000 mileage allowance, could be VT'd after 3 yrs and 9 months (50%) and 64,000 miles with no penalty. Yes the car can be VT'd under the statutory terms of the CCA with no penalty, but the excess mileage component is separate to this (although rolled-up into the one agreement). This is allowed and the excess mileage is not technically a 'charge' in the sense that you and Stuckcluckets seem to think.

In the case of my wife's car, when it reaches 4 yrs old, CAP notes a £110 difference in value for every 1k miles. If you were correct, anyone taking out a PCP would opt for the lowest mileage allowance possible in order to reduce their monthly rentals, safe in the knowledge that the finance companies couldn't claim for excess mileage if VT'd. (Doesn't really matter if you intend to pay the balloon or trade in back to the dealer for a new agreement)

FWIW, the finance companies raise a number of Simple Procedure Actions (in Scotland) every year for exactly this, and I would assume do similar in England & Wales also. The numbers are relatively small as most people recognise their legal obligation to pay for the excess mileage, and where they're daft enough to believe what they read on forums such as this, the defendant response form dropping through their letterbox from the Sheriff Court (in Scotland) soon focuses their mind. If they're still too arrogant to believe that they have to pay it, and wish to consult their solicitor, a bit of professional legal advice soon ensures that they pay up tout-suite (Stuckcluckets' home insurer recognised his case was going nowhere, but palmed him off with a polite excuse about his policy not covering the relevant periods of his PCP agreement). From the finance company's perspective, the £19/102 cost of raising a Simple Procedure action is just an administrative cost of pursuing the debt. In summary, the claims are being issued, but never reach court because the defendant settles.

With 5,678 posts on this site you clearly fancy yourself as a consumer lawyer... a bit like those people who buy second-hand ambulance service clothing on the 'bay and a scanner, and pretend to be paramedics.

My solicitor charges a flat fee of £185 per hour. Real solicitors, lawyers, and even para-legals don't spend their evenings giving out 'freebies' to randoms on the internet. If readers want to risk their financial and personal reputation off the back of some free 'advice' given by people on this site then they're definitely getting what they pay for. Good luck!

[R0b]

So, if it's a contractual term, but technically not a charge, despite being phrased as an excess mileage charge or words to that effect, then what exactly is it?

It is a contractual term that forms part of the agreement and is not different to a collection charge, administration charge or other similar charges. No matter how much you fluff it up as being something else, it's either a charge or it isnt. If the agreement runs it's full course and the debtor opts to return the car, the excess mileage term would apply because the debtor did not exercise their VT right.

As for your point about anyone opting for the lowest mileage and getting away with it, that is true and no doubt there are some who do that. However, if finance companies were savvy enough (some of them seem to be) they would look at other alternative ways of claiming, such as misrepresentation.

Again, you seem to be making bold statements but lacking the evidence to back it up. I'm not entirely sure the point you are making about your solicitor and his/her charges. There are (I believe) several solicitors, paralegals etc. Who do post on here so your point about 'real lawyers' not spending their time on forums is untrue.

Rather than try to attack me directly and make certain assumptions as well as others, how about we stick to issue which is the excess mileage debate.

There's clear evidence to support excess mileage charges not being enforceable i.e. a court judgment, but still awaiting something concrete from you.

[scotstoun]

You won't get concrete case-history from me as I'm not a lawyer and don't have the time or inclination to trawl case-history to find some. On the other hand, you are relying on YOUR interpretation of elements of the CCA and one piece of case-history involving MBFS. Whilst that case was successful, and I'm not familiar with the individual details of it, I do know from having worked in debt recovery that there have been successful claims made by finance companies for excess mileage costs on VT'd PCPs. I'm not in that line of work anymore, but when I was, whilst my colleagues and I were not involved in the claims or any subsequent court action, we were involved in enforcing the decrees that finance companies obtained against debtors. More than once, we heard the story from some poor punter who had lost his job, was struggling to keep the household finances afloat, so VT'd the car with the expectation that they could dodge charges such as excess mileage... based on stories they'd read online.... only to find out otherwise to their cost.
What it ultimately comes down to is people attempting to defraud the finance company by exceeding the agreed mileage, then expecting the finance company to pick up the tab. Online contributors such as yourself might feel smug that you're 'beating the system' or 'the corporate giants', but ultimately you're promoting fraud and in most cases contributing to a worse outcome for debtors. How many PCP agreements have YOU PERSONALLY taken out and VT'd having exceeded the mileage allowance? How many contributors have YOU PERSONALLY represented in court on cases of excess mileage on a VT'd PCP? And how much of YOUR PERSONAL money have you put up to help a forum contributor defend themselves in this type of case? I'd guess the answer is none in every case.

[Phaeton]

So scotstoun what about where a salesman advises the purchaser to take the lower mileage knowing full well they will exceed it?

[JazzJPH]

Edit: Quoted wrong message, sorry. Ignore this....

[scotstoun]

So scotstoun what about where a salesman advises the purchaser to take the lower mileage knowing full well they will exceed it?

Despite being FCA regulated, car salesmen will always be car salesmen. It's in their interests to advise the customer to take the lower mileage allowance for two reasons: 1) The apparent lower monthly payments will appear more attractive to the potential customer, thereby resulting in a greater chance of a sale; 2) If/when the customer exceeds that mileage, they will either have to pay a charge for the excess mileage OR the 'friendly' salesman offers the customer a respectable 'trade-in' price (i.e. a little excess equity over & above the GMFV) which in effect covers the excess mileage charge and gives enough for a 'deposit' on the new car. It's essentially smoke & mirrors, as it's all been built in to the cost of the car in the first place... years ago a cash-buyer would negotiate a discount for paying cash, but these days the PCP customer is making payments based on the full retail price of the car where an affordable monthly payment is the only important thing to them. The discount for cash buyers was front loaded, but in the case of PCP customers it's held back to give the dealer some margin to help 'recycle' that customer into another PCP agreement.

Personally I wouldn't trust any car sales-person to tell me the time of day. I've worked with many earlier on in my career, and found that it was a job where morals were left at the front door when they went to work (I was a stock buyer, not a salesman).

I could play verbal ping-pong with Rob on here all day, but I doubt we'd ever reach an agreement. I was only motivated to make my initial post yesterday because I see too much incorrect 'advice' being given to consumers over issues like this. At the end-of-the-day, we're all big boys & girls and take responsibility for our own actions... But I've seen it from the other end so to speak, and people thinking that they can play the system to walk away from paying excess mileage charges is not the easy thing that it's made out to be on sites such as this. I notice Stuckcluckets (and similar people on certain 'money saving' websites) has not been back recently to update everyone on the final outcome in his case, but if anyone wants to try their luck then that's their personal decision.

[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?

[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?

[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.

[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.....

[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?

[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 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

[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.

[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.