Voluntary Termination with excess mileage

[simon1966]

rob

Hello!

I am posting to explore my daughters options concerning voluntary termination of her Land Rover Financial Services PCP/HP agreement.

She is currently only 16 payments into a 36 payment agreement, and I have calculated she will not have reached the 50% total amount payable for another 14 months. This aside if she waits until she has paid the 50% (Dec 2019) she will still have excess mileage, as currently after 16 months the vehicle has 39k and the contract is based on 36 months with permitted maximum mileage of 36k. Unfortunately her travelling circumstances have completed changed within the last 12 months which she is desperately trying to reduce! However I would expect that come next December being approximately 30 months into her agreement and at the stage when she could execute her right to VT that her mileage would be ~60k+

From reading between the lines on this forum it appears that although the lender will initially come after you for the excess mileage charges, if you hold your nerve these charges cannot be enforced - would this be correct based on our scenario above?

Alternatively she has the option today to return the car to the dealer with settlement of the outstanding agreement with a negative balance of ~£5k

What would your advice be please?

kind regards

Simon

[2222]

What would the excess mileage charge be on the extra 30k miles?

[R0b]

I never dealt with Land Rover before so I have no idea what sort of stance they take in relation to this. BMW and Barclays for example do coerce you into paying by putting late payment markers on your credit file, so you do need to bear that in mind.

My position on excess mileage hasn't changed and there is a recent County Court decision (although not binding) that confirmed excess mileage is not recoverable. Whether your daughter decides to continue and incur further excess mileage charges is up to her but, the higher the charges, the more likely LR could take their chances by going to court.

It might be best for her to VT sooner than later but that is up to her and she takes the risk either way.

One thing your daughter could try is to write to LR and ask that her position has changed in terms of the mileage and could they look to revise the agreed mileage. The reason why I say that is because if your daughter does VT and return the vehicle, at whatever excess mileage and LR decided to pursue her to court, she may have a defence argument of an unfair relationship in so far as the way in which LR have exercised their rights, potentially that if there is no option to re-negotiate could be found to be unfair and a court could decide to write off the whole of that amount or part of it or even tell the lender to pay compensation.

It's more of a cover her own back situation so that she can point out that she tried as she became aware and LR's conduct was unreasonable by (presumably) point blank refusing to consider the option.

2222 excess mileage pence per mile varies usually between 5p to 10p but if you took an average of 7p per mile, you would get £2,100 excess mileage charges based on an extra 30k mileage.

[simon1966]

What would the excess mileage charge be on the extra 30k miles?

For over 5,000 miles or more 28 pence per excess mile + VAT.

[R0b]

28p plus vat seems rather excessive in fact I would say that is bordering an unfair penalty clause.

What is the total amount payable under the agreement? How much have you paid and how much is the vehicle currently valued at as an estimate?

[simon1966]

I never dealt with Land Rover before so I have no idea what sort of stance they take in relation to this. BMW and Barclays for example do coerce you into paying by putting late payment markers on your credit file, so you do need to bear that in mind.

My position on excess mileage hasn't changed and there is a recent County Court decision (although not binding) that confirmed excess mileage is not recoverable. Whether your daughter decides to continue and incur further excess mileage charges is up to her but, the higher the charges, the more likely LR could take their chances by going to court.

It might be best for her to VT sooner than later but that is up to her and she takes the risk either way.

One thing your daughter could try is to write to LR and ask that her position has changed in terms of the mileage and could they look to revise the agreed mileage. The reason why I say that is because if your daughter does VT and return the vehicle, at whatever excess mileage and LR decided to pursue her to court, she may have a defence argument of an unfair relationship in so far as the way in which LR have exercised their rights, potentially that if there is no option to re-negotiate could be found to be unfair and a court could decide to write off the whole of that amount or part of it or even tell the lender to pay compensation.

It's more of a cover her own back situation so that she can point out that she tried as she became aware and LR's conduct was unreasonable by (presumably) point blank refusing to consider the option.

2222 excess mileage pence per mile varies usually between 5p to 10p but if you took an average of 7p per mile, you would get £2,100 excess mileage charges based on an extra 30k mileage.

Many thanks for your comments.

The agreement states excess miles of 5,000 or more are at 28 pence per mile plus VAT. Therefore 30K would be in excess of £10k in excess mileage charges!!!

She has the option of returning the car now at a net cost of £5k (£27k outstanding finance minus £22k resale value of the car). This is somewhat a relief to her to get the pain and experience over and done with now instead of delaying the process, which I can understand but I am just trying to see what options she may have, if any.

[simon1966]

28p plus vat seems rather excessive in fact I would say that is bordering an unfair penalty clause.

What is the total amount payable under the agreement? How much have you paid and how much is the vehicle currently valued at as an estimate?

Total amount payable is £44,373
paid to date deposit of £8,000 plus 16 payments of £477, total paid £15,637
vehicle is currently valued at £22,000

[R0b]

Thank you for that. I think ultimately it is her choice as to what she want's to do but VT is never made easy by lenders so she may need to dig her heels in. Some lenders such as BMW and Barclays have now resorted to issuing late payment markers on people's credit file and calling their bluff in order to exert payment. Unfortunately you'll see from the many threads here, no one has taken lender to court over that so there is also that you need to take into account.