Voluntary Termination-excess mileage

[Katep]

Hi,

i have exercised my right to volumtary terminate my agreement for my vehicle. I have paid over 50% of the agreement. They have charged me for damage to the vehicle and excess mileage of £2000.

The original agreement was for 6000 miles a year and we returned it with 57000 after 35 months.
I disputed the excess mileage and they have stated that it’s because I have not taken ‘reasonable care’ of the car.

This is the main part of my response:

I do not consider the mileage limitation to be fair and reasonable. You state that mileage limitation is a measure of what is ‘reasonable care’ of a car. There is also no definition of what constitutes ‘Reasonable Care’. Section 6 of your PCP Agreement terms and conditions clearly state what Care of the Vehicle means, and this does not include any mileage limitation. In addition, my previous vehicle, purchased through PSA, was handed back to the garage with mileage of 65,000 yet nothing was stated to me when handing the vehicle over, yet I was given further finance through PSA to purchase another vehicle. This is irresponsible.

In paragraph 6 of your letter you state that the response form included with the VT letter, mentioned that I may have to pay an additional sum for any excess mileage charge, and you assumed that I was aware of the VT implications, however I was under duress as I could not terminate my contract without signing this form.

With regards to Section 100(4) of the CCA 1974, the duty is to take reasonable care of the vehicle and to avoid any negligent act or omission that causes physical damage to it whilst in my possession. I have yet to see any evidence from PSA which indicates that the excess mileage has resulted in physical damage beyond reasonable wear and tear. I would also point out that the same point was raised in the Mercedes-Benz case (see paragraph below) and failed on the basis that there was no correlation between the excess mileage and a failure to take reasonable care of the vehicle. The vehicle had a full-service agreement with the Peugeot dealership with full service history, and at no point was mileage mentioned as the cause of any physical damage.

The County Court case between Mercedes-Benz Financial Services (UK) Limited v Cahalane (Willesden County Court, 26 February 2018) District Judge Ellington (as she was then) held that excess mileage charges were not recoverable. Her reasons included, that the definition of total price excluded the recoverability of these charges, the statement “Termination: Your Rights” was explicitly clear that liability was limited and, in any event, she was bound by the Court of Appeal decision in Julian Hodge Bank v Hall [1997] EWCA Civ 1852, which established that “total price” excludes compensation and damages for breach of the agreement for the purposes of calculating the total price payable.

have I gone into too much detail? Am I making irrelevant points?

[R0b]

Hello

In PSA's letter, did they explain the reason why the excess mileage amounted to unreasonable care? If not, I would be starting with that as the first question, inviting them to provide an explanation and/or evidence as to how the additional mileage (which is merely a contractual arrangement) has caused the car to become in an unreasonable condition. It sounds like you have also picked up the point on their clause about the definition of reasonable care; does it specify anything in there about excess mileage being part of that definition?

I suspect if the definition of reasonable care doesn't include excess mileage then PSA is likely to say that the additional mileage has caused a reduction in the car's value. Of course if they do say that, it's helpful to you because there's already case law that says the price of the car sold for does not determine if it was returned in a reasonable condition. So if you get that in writing, you can point to that (if it ever went to court) and they can't quite s easily retract that statement.

Also, just as an FYI understanding to you, and without getting too much into the legalities, the duty to take reasonable care of the car under s.100(4) should not be determined by the reasonable care definition under the contract. It is a general principle of law that the parties have the freedom to contract and agree the terms that govern their relationship. So in this case, the standard of care under the contract can create a higher standard of care than that set out in section 100(4), being a lower standard of simply 'reasonable care'. Also, there is case law to support that an obligation undertaken indepedently of the contract is a breach of tort, not contract. For example, Joy v Moy, Davies, Smith, Vandervel & Co. [1936], one judge had said this:

where the breach of duty alleged arises out of a liability independent of the personal obligation undertaken by contract, it is tort, and it may be tort even though there may happen to be a contract between the parties, if the duty in fact arises independently of the contract

In other words, unlike a contract where the terms are fixed by the parties, a tort is fixed by the law, in this case being s.100(4). The duty of care is therefore one of negligence which means any loss to PSA would have to been physical damage, because pure financial losses are not recoverable under breaches of tort except in situations not applying here.

The rest of your response sounds fine.