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BMW Financial Services - Voluntary Termination/Excess Mileage

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  • BMW Financial Services - Voluntary Termination/Excess Mileage

    Hello all! Just joined the forum after finding some very useful information courtesy of everyone here at LegalBeagles.

    Back in July 2017, I chose to voluntarily terminate my PCP agreement with BMW Financial Services. I was about to venture into the world of home ownership with my first mortgage, and as such, I needed to get myself out of my agreement with immediate effect. I did some research into voluntary termination, and since I'd paid around £3,000 over the 50% mark, it seemed like the best route. Unfortunately, I had exceeded the mileage in my original PCP agreement. My PCP allowed for 9,000 miles per annum, and by the 3 year mark I'd reached a total of 45,000 miles - a total excess of 18,000 miles. My online research had prepared me for the possibility that BMW Financial Services might try and charge me for this excess mileage - I am very aware of my rights in law under the CCA, and as such I was prepared to dispute any potential claims made by BMW Financial Services. Surprise surprise, about 3 weeks after all was said and done (car collected and returned etc.), BMW Financial Services sent me an invoice for excess mileage charges (totalling approx. £2,100) along with a nice long letter full of waffle about why/how they are entitled to charge me for this under the CCA along with a scanned copy of my original financial agreement/contract document with them.

    Needless to say, I chose to dispute their claim as per the advice I read online here at LegalBeagles. Here are the steps that I've followed so far:
    - Completed BMW Financial Services official complaint process, including escalation stage 2. They, of course, rejected my complaint, claiming that I still owe them.
    - Raised a formal complaint to the Financial Ombudsman, also including escalation to stage 2 (official review by an Ombudsman). Stupidly, they found in favour of BMW Financial Services, stating that this was because they "do not consider legislation when making their judgement" and only make an assessment based on what they believe to be "fair and reasonable" (I was aware based on articles I'd read online at LegalBeagles that the Financial Ombudsman were unlikely to find in my favour, but I thought it was worth a go). I, of course, chose to reject their decision.

    So where are we now? There hasn't been a great deal of chasing on BMW Financial Services part in truth. I've received the following from them:
    - A letter stating that my account with them is in arrears and that I must pay immediately or I "risk" further action being taken
    - A couple of phone calls from them asking me whether or not I was aware of the charges outstanding, and whether or not I'd like to make payment over the phone
    - A statement of my account, showing as still open with the balance of £2,100 pending

    Up until recently, I'd pretty much left it be and ignored any contact from BMW Financial Services, but the statement of my account that I received recently prompted me to check whether or not all this fighting had impacted my credit rating at all. Normally I use ClearScore to regularly keep track of my credit file, though I decided on this occasion to get a separate opinion from Experian. What I found made me pretty angry to say the least. BMW Financial Services have marked the account as being voluntary terminated as of 01/07/2017, and updated the balance to show an outstanding amount of £2,100 (as I expected). What I didn't expect, however, is for them to claim that I have missed the last 2 monthly payments. They have added an entry for each month since my voluntary termination saying "missed/late repayment", despite there being no monthly fee to be paid. Interestingly, rather than applying the standard CAIS codes to each of these missed payments (e.g. code 1 for the first month missed, code 2 for the second), each entry shows as having a CAIS code of 0, which is applied where a balance is cleared/satisfied on or before the requested payment date - in other words, this code is applied to normal successful payments.

    The above has had a significant impact on my credit score - it's dropped from around the 970 mark, to the low 600s, taking it into the 'Poor' category. Unsurprisingly, I'm pretty furious about this. So I'm here to ask for some advice r.e. getting my credit file amended and continuing my fight. BMW Financial Services should have marked my account with them as closed/satisfied the moment I chose to voluntary terminate, so keeping this open and effectively 'amending' the balance to try and claim that excess mileage is owed is without doubt entirely illegal, as are the additions to my credit file. I have written to them explaining my reasoning, asking them to amend my credit file accordingly, though they have responded with a refusal to do so. It is on this basis I would like to ask for some advice on:
    - How to go about getting my credit file legally amended
    - How to get BMW Financial Services to close the account as they should have done initially

    I'm very much hoping that court isn't going to be the only solution here, as I'd hate for it to have to go that far, though I do appreciate that this is a realistic possibility at this point.

    Some points to add:
    - I notified BMW Financial Services about my wishing to voluntary terminate in accordance with the advice I read here at LegalBeagles. I wrote to them, stating clearly what I was doing and the date from which it would take effect.
    - The car was reviewed by two BCA inspectors upon collection, both of whom confirmed the car to be in an excellent condition with no damages/marks to note (I have signed copies of paperwork documenting this). BMW Financial Services have not attempted to argue that the car has suffered excessive 'wear and tear' as a direct result of the higher mileage

    Thanks in advance for all your help. I'll do my best to answer any questions you may have!
    Tags: None

  • Ashfox
    So I've just had my latest credit report and the outstanding mileage charge has been flagged as a missed payment (and reduced my credit score) ... Then it contradicts itself with the following commentary underneath.....

    Voluntary Termination

    What does this mean? The lender has reported that the account has been closed under Section 99 of the Consumer Credit Act 1974. This relates to hire-purchase and condition-sale agreements (credit used to buy a car or other vehicle) and allows you to return the car and owe nothing once you have repaid half of the total price.

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  • Dicksonk
    Thanks for coming back to me, grateful if you could let me know what the outcome is from the ombudsman if you don’t mind.


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  • Ashfox
    Just a letter from the ombudsman to say that they have contacted BMW to investigate the claim. No result yet!

    I had a call from BMW debt collectors today to reiterate that if I didn't pay the amount it would be marked on my credit report. And offered that if I make full payment today and the ombudsman finds in my favour, they will refund the amount! How kind. I'm holding out to see what the ombudsman says before deciding what to do.

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  • Dicksonk
    Hi ASHFOX.

    Just wondered if you have had a response yet from the Financial Ombudsman, I’m in a similar position with BMW Finance so would be interested to hear any update. Thanks.

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  • Ashfox
    I followed the process as suggested on this site and am going through the same issues with BMW FS regarding excess mileage charge.

    Currently awaiting a response from the financial ombudsman, but not holding my breath based on other experiences I've read about.

    Have just checked my credit report and the amount of excess mileage BMW claim I owe is now showing as the only outstanding balance (which they've told me will be a black mark next month when it falls more than 28 days due!)

    Considering whether the easy way out is to try and offer a settlement with them as I'm worried about the damage that could be done to my credit score. Legal action would not be worth the cost that BMW are asking for so I don't see much other choice.

    I have a colleague who has some experience in dealing with these kind of claims as a lender who has not seen this interpretation of the CCA used so loosely in order to pursue a charge in what is very much a grey area!

    Just wanted to add my experience in case it benefits anyone considering VTing with BMW....

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  • Antdo492

    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


    “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.”


    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…

    Leave a comment:

  • Bass Player

    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.

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  • 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......

    Leave a comment:

  • 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.

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  • 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.....

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  • Phaeton
    Originally posted by scotstoun View Post
    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.

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  • 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.

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  • 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.

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  • GreggM

    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.


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