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Hi,
I have recently Voluntary terminated my PCP with BMW financial services and they are trying to charge me for excess mileage charges.
I argued the mileage charges due to the consumer credit act, as 50% of the value of the car had been paid for. BMW's response was:
Thank you for your email in connection to the excess mileage and damage invoice raised. We regret that we do not agree with your position that you are not liable to pay the Excess Mileage Invoice rendered following the Voluntary Termination of your Agreement on the basis that your liability was limited to 50 percent of the total price (“Total Amount Payable”) under the Agreement in accordance with Section 100(1) of the Consumer Credit Act 1974 (“the Act”). Section 99(2) of the Act Section 99(2) of the Act provides that termination of an agreement by a customer by way of Voluntary Termination “does not affect any liability under the agreement which has accrued before the termination”. The “Excess Mileage Charges for Depreciation” and “Termination” sections of the Agreement clearly state that Excess Mileage Charges are sums that become payable under the Agreement prior to termination and as such it is clear that they are due and payable by you pursuant to Section 99(2). The “Termination: Your Rights” section of the Agreement does not make specific reference to you having liability for charges incurred prior to termination upon Voluntary Termination of the Agreement, however, the Agreement should be read as a whole and also in the context of Section 99(2) of the Act. You signed a Customer Acknowledgment form prior to entering into the Agreement (copy attached) which contains a section which states “please confirm your estimated mileage is correct on the agreement. Estimating too low may result in an excess mileage charge being payable when the agreement ends”. You ticked the box next to that section, thereby declaring not only that the mileage contained within the Agreement was suitable for your needs, but also acknowledging that an excess mileage charge may be applicable in the event that the mileage given was too low. You therefore have been in no doubt that you would have to pay Excess Mileage Charges in the event that you exceeded the agreed contractual mileage. You then went on to sign the Agreement and by doing so was confirming that you had read and understood the Agreement and was willing to be bound by its Terms and Conditions, to include payment of an applicable Excess Mileage Charges in the event that you choose to Voluntary Terminate the Agreement. Section 100 of the Act Whilst Section 100(1) provides that a customer will be liable to pay a “creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination”, Section 100(1) must be read in conjunction with Section 99(2). A customer’s liability to a creditor upon Voluntary Termination is pursuant to Section 99(2), i.e. payment of any pre-termination charges such as Excess Mileage, in addition to the limit of 50 percent of the Total Amount payable under the Act. Further, Section 100(4) of the CCA provides that “if a debtor has contravened an obligation to take reasonable care of the goods” the amount due upon Voluntary Termination “shall be increased by the sum required to recompense the creditor for that contravention…..”. This supports the “Termination” and “Termination: Your Rights” sections of the Agreement which provide your liability upon Voluntary Termination of the Agreement would be increased if reasonable care had not been taken of the Vehicle. In this instance, mileage limitation is a fair measure of what would constitute “reasonable care” of the Vehicle given that it can affect its value upon resale. Exceeding the Maximum Total Mileage agreed upon commencement of the Agreement, is likely to have caused the Vehicle to have decreased in value more than it otherwise might have done had the agreed mileage been adhered to and you should therefore have to compensate us accordingly. In light of this I am confident that BMW Financial Services have not acted incorrectly by raising this invoice and consider our charge to be an accurate reflection of the additional mileage and will therefore remain payable in full.
After this I then responded using a template which I found on here and they came back with:
In your letter you mention Section 173 of the Credit Consumer Act, whilst this states that a contractual term is unenforceable should it add additional liability. Your duty to pay for the excess mileage invoice is not an additional liability as it is clearly explained you will have to pay for excess mileage under the “Excess Mileage Charges for Depreciation” Section of your agreement should you end the agreement early. I must confirm that we have issued a final response and our position remains the same as outlined in our correspondence dated 16 November 2018. As you disagree with our position I would suggest you contact the Financial Ombudsman.
Does anyone have any advice on what to do next?
I don't want to pay the excess mileage charges for the vehicle.
Any help would be greatly appreciated, I can also dig out and find the letters I responded back to them with if that helps.
Thanks in advance.
I have recently Voluntary terminated my PCP with BMW financial services and they are trying to charge me for excess mileage charges.
I argued the mileage charges due to the consumer credit act, as 50% of the value of the car had been paid for. BMW's response was:
Thank you for your email in connection to the excess mileage and damage invoice raised. We regret that we do not agree with your position that you are not liable to pay the Excess Mileage Invoice rendered following the Voluntary Termination of your Agreement on the basis that your liability was limited to 50 percent of the total price (“Total Amount Payable”) under the Agreement in accordance with Section 100(1) of the Consumer Credit Act 1974 (“the Act”). Section 99(2) of the Act Section 99(2) of the Act provides that termination of an agreement by a customer by way of Voluntary Termination “does not affect any liability under the agreement which has accrued before the termination”. The “Excess Mileage Charges for Depreciation” and “Termination” sections of the Agreement clearly state that Excess Mileage Charges are sums that become payable under the Agreement prior to termination and as such it is clear that they are due and payable by you pursuant to Section 99(2). The “Termination: Your Rights” section of the Agreement does not make specific reference to you having liability for charges incurred prior to termination upon Voluntary Termination of the Agreement, however, the Agreement should be read as a whole and also in the context of Section 99(2) of the Act. You signed a Customer Acknowledgment form prior to entering into the Agreement (copy attached) which contains a section which states “please confirm your estimated mileage is correct on the agreement. Estimating too low may result in an excess mileage charge being payable when the agreement ends”. You ticked the box next to that section, thereby declaring not only that the mileage contained within the Agreement was suitable for your needs, but also acknowledging that an excess mileage charge may be applicable in the event that the mileage given was too low. You therefore have been in no doubt that you would have to pay Excess Mileage Charges in the event that you exceeded the agreed contractual mileage. You then went on to sign the Agreement and by doing so was confirming that you had read and understood the Agreement and was willing to be bound by its Terms and Conditions, to include payment of an applicable Excess Mileage Charges in the event that you choose to Voluntary Terminate the Agreement. Section 100 of the Act Whilst Section 100(1) provides that a customer will be liable to pay a “creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination”, Section 100(1) must be read in conjunction with Section 99(2). A customer’s liability to a creditor upon Voluntary Termination is pursuant to Section 99(2), i.e. payment of any pre-termination charges such as Excess Mileage, in addition to the limit of 50 percent of the Total Amount payable under the Act. Further, Section 100(4) of the CCA provides that “if a debtor has contravened an obligation to take reasonable care of the goods” the amount due upon Voluntary Termination “shall be increased by the sum required to recompense the creditor for that contravention…..”. This supports the “Termination” and “Termination: Your Rights” sections of the Agreement which provide your liability upon Voluntary Termination of the Agreement would be increased if reasonable care had not been taken of the Vehicle. In this instance, mileage limitation is a fair measure of what would constitute “reasonable care” of the Vehicle given that it can affect its value upon resale. Exceeding the Maximum Total Mileage agreed upon commencement of the Agreement, is likely to have caused the Vehicle to have decreased in value more than it otherwise might have done had the agreed mileage been adhered to and you should therefore have to compensate us accordingly. In light of this I am confident that BMW Financial Services have not acted incorrectly by raising this invoice and consider our charge to be an accurate reflection of the additional mileage and will therefore remain payable in full.
After this I then responded using a template which I found on here and they came back with:
In your letter you mention Section 173 of the Credit Consumer Act, whilst this states that a contractual term is unenforceable should it add additional liability. Your duty to pay for the excess mileage invoice is not an additional liability as it is clearly explained you will have to pay for excess mileage under the “Excess Mileage Charges for Depreciation” Section of your agreement should you end the agreement early. I must confirm that we have issued a final response and our position remains the same as outlined in our correspondence dated 16 November 2018. As you disagree with our position I would suggest you contact the Financial Ombudsman.
Does anyone have any advice on what to do next?
I don't want to pay the excess mileage charges for the vehicle.
Any help would be greatly appreciated, I can also dig out and find the letters I responded back to them with if that helps.
Thanks in advance.
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