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Hi all,
Thought I would share my experience with VWFS for anyone's future benefit.
After VT'ing my PCP Finance car after 2 and a half years (£14000 credit , £6300 remaining on the account) I was given an end of contract invoice that requested payment of £1,303.46 including VAT.
The final outcome was me paying £500 in total only for excess mileage - purely because I have lots of other things to focus on at the moment. However, it's worth knowing what to say to save yourself £800.
Below is the thread of emails exchanged.
MY REQUEST FOR THE BREAKDOWN OF CHARGES:
"Dear Sir/Madam,
I write to request a comprehensive breakdown of the End of Contract Invoice charges that I have been sent by yourselves, specifically but not exclusively for the breakdown of the Refurbishment Costs that are quoted.
Please arrange this to be sent across via email.
Regards,"
VWFS RESPONSE:
"Please see below for a breakdown of your end of contract charges. I have also attached a copy of the inspection report provided by British Car Auctions.
Bonnet Front Bird lime £110.40
Door Left Hand Front 1st dent per vehicle £138.00
Wing Left Hand Front Bird lime £110.40
(Prices exclude VAT)
Total refurbishment charge is £588.96 including VAT.
I can confirm that you also have an excess mileage charge of £714.50 including VAT. This is charged on a pro rata basis:
Excess Charge Rate: 6p
Total Contracted Mileage: 75667
Odometer reading: 77762
Pro-Rated Mileage: 22838.4
Start mileage: 45000
Excess Mileage = £595.42 excluding VAT
+ VAT (20%) = £714.50
Your total end of contract charges are £1,303.46 including VAT."
MY RESPONSE:
"Dear Sir/Madam,
I write this email to address the breakdown of charges issued following the voluntary termination of finance relative to the above agreement number.
The charges issued are found to be unreasonable and unfair for the following reasons:
- The car was initially purchased in a used condition. The refurbishment costs being claimed for include a scratch on the Left Hand Front Door. Any further imposed charges for refurbishment of the vehicle must be deemed unreasonable wear and tear on the premise of sale of a preowned vehicle, sold in a used condition.
- I was astonished to see that there was a charge included on breakdown for the replacement of a spare key for £132.00. It should be visible on your records unless it was not recorded from yourselves at the time of purchase that the spare key was found inoperable on purchase of the vehicle, and I was informed by your staff at Lookers Volkswagen that it simply required "new batteries". The charge imposed is deemed unfair.
Further, I would like to address the excess mileage charges imposed.
In a recent 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.
It is clear from the above that upon exercising my voluntary termination right, the ability to recover any sums exceeding one half of the total price payable no longer exist. Had I not exercised this right to terminate, and instead continued the agreement until the hire period expired and opting to return the vehicle, then the excess mileage charges would have applied as the limited liability rule would not be engaged.
With regards to Section 100(4), 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 Volkswagen Financial Services which indicates that the excess mileage itself 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 and failed on the basis that there was no correlation between the excess mileage and a failure to take reasonable care of the vehicle.
I would appreciate any comments to the above and in the absence of a substantive response I have nothing further to add and expect the matter to be closed.
Yours faithfully,"
VWFS RESPONSE:
"Thank you for your communication, I am sorry that you have had cause to complain.
Your Complaint:
I understand you are unhappy having received an invoice for excess mileage charges on the return of the GOLF HATCHBACK. You voluntary terminated the agreement and had a final reading of 77762 miles.
My Investigation:
You have been charged for excess mileage above your allocation as per your signed terms and conditions. Please see the figures below:
Your total contracted mileage was 75.667
Your final reading was 77762
The pro-rated limit was 22838.4
Your excess mileage rate is 6 pence per mile plus VAT
Your excess mileage charge is £714.50 including VAT
When returning your vehicle early through a Voluntary Termination, we recalculate your mileage pro rata. This means we calculate a daily mileage allowance, based on the annual mileage you advised, which we then use to calculate how many miles you should have accrued at the time of returning your vehicle.
I refer you to your signed terms and conditions section 11.4;
11.4 If this Agreement terminates early, we will reduce the Maximum Total Mileage in the proportion which the actual period of hire bears to the period of hire originally agreed. Any excess mileage charge will be recalculated using that reduced Maximum Total Mileage.
I can confirmed, we have reviewed your inspection report from British Car Auctions and we are pleased to inform you, that you will not be charged any of the refurbishment costs.
Please note £714.50 including VAT for the excess mileage charges remains payable to satisfy the account. You can make payment using one of the following methods; "
AT THIS POINT I IGNORED LETTERS BECAUSE I WAS BUSY PAYING MYSELF BEFORE ANYONE ELSE AND IT WAS PASSED ONTO A DEBT RECOVERY AGENCY THAT WORKS IN PARTNERSHIP WITH VWFS.
IT WAS A STANDARD DEBT COLLECTION LETTER WITH BIG LETTERS STATING 'OUTSTANDING AMOUNT OWED' (Scare tactics)
Anyway, I sent them this email:
"Hi,
I have received a request for payment of an outstanding amount that remains on my account with VWFS.
At this current time, I am not happy on paying the full amount due to the nature of the charge and would offer a settlement amount of £400 which can arranged to be transferred to you at any time.
Please arrange a written response to this email with acceptance of full and final closure of the case for the amount stated above.
Thanks"
THIS WAS THEIR RESPONSE:
"Good morning,
Thank you for your email, please accept my apologies for the delay in responding.
Debt and Revenue Services have been instructed to contact you to discuss an overdue balance on your recent Volkswagen Financial Services (UK) Limited account.
There is currently an outstanding balance of £714.50 on your account.
We are able to offer a full and final settlement of your account, however we must ensure this meets the criteria set by our client. The amount needed would be £500.15, please could you confirm is this is acceptable and the date you are able to make this payment?
Alternatively I can confirm that we are able to set up an affordable payment plan to clear your balance via instalments."
I ended up paying this amount and settling the matter.
Hopefully this helps someone else out there so don't worry too much if you're in this situation. I could have continued to fight the case for excess mileage as its still disputable but I didn't want to spend any more time on this issue.
Thought I would share my experience with VWFS for anyone's future benefit.
After VT'ing my PCP Finance car after 2 and a half years (£14000 credit , £6300 remaining on the account) I was given an end of contract invoice that requested payment of £1,303.46 including VAT.
The final outcome was me paying £500 in total only for excess mileage - purely because I have lots of other things to focus on at the moment. However, it's worth knowing what to say to save yourself £800.
Below is the thread of emails exchanged.
MY REQUEST FOR THE BREAKDOWN OF CHARGES:
"Dear Sir/Madam,
I write to request a comprehensive breakdown of the End of Contract Invoice charges that I have been sent by yourselves, specifically but not exclusively for the breakdown of the Refurbishment Costs that are quoted.
Please arrange this to be sent across via email.
Regards,"
VWFS RESPONSE:
"Please see below for a breakdown of your end of contract charges. I have also attached a copy of the inspection report provided by British Car Auctions.
Bonnet Front Bird lime £110.40
Door Left Hand Front 1st dent per vehicle £138.00
Wing Left Hand Front Bird lime £110.40
(Prices exclude VAT)
Total refurbishment charge is £588.96 including VAT.
I can confirm that you also have an excess mileage charge of £714.50 including VAT. This is charged on a pro rata basis:
Excess Charge Rate: 6p
Total Contracted Mileage: 75667
Odometer reading: 77762
Pro-Rated Mileage: 22838.4
Start mileage: 45000
Excess Mileage = £595.42 excluding VAT
+ VAT (20%) = £714.50
Your total end of contract charges are £1,303.46 including VAT."
MY RESPONSE:
"Dear Sir/Madam,
I write this email to address the breakdown of charges issued following the voluntary termination of finance relative to the above agreement number.
The charges issued are found to be unreasonable and unfair for the following reasons:
- The car was initially purchased in a used condition. The refurbishment costs being claimed for include a scratch on the Left Hand Front Door. Any further imposed charges for refurbishment of the vehicle must be deemed unreasonable wear and tear on the premise of sale of a preowned vehicle, sold in a used condition.
- I was astonished to see that there was a charge included on breakdown for the replacement of a spare key for £132.00. It should be visible on your records unless it was not recorded from yourselves at the time of purchase that the spare key was found inoperable on purchase of the vehicle, and I was informed by your staff at Lookers Volkswagen that it simply required "new batteries". The charge imposed is deemed unfair.
Further, I would like to address the excess mileage charges imposed.
In a recent 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.
It is clear from the above that upon exercising my voluntary termination right, the ability to recover any sums exceeding one half of the total price payable no longer exist. Had I not exercised this right to terminate, and instead continued the agreement until the hire period expired and opting to return the vehicle, then the excess mileage charges would have applied as the limited liability rule would not be engaged.
With regards to Section 100(4), 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 Volkswagen Financial Services which indicates that the excess mileage itself 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 and failed on the basis that there was no correlation between the excess mileage and a failure to take reasonable care of the vehicle.
I would appreciate any comments to the above and in the absence of a substantive response I have nothing further to add and expect the matter to be closed.
Yours faithfully,"
VWFS RESPONSE:
"Thank you for your communication, I am sorry that you have had cause to complain.
Your Complaint:
I understand you are unhappy having received an invoice for excess mileage charges on the return of the GOLF HATCHBACK. You voluntary terminated the agreement and had a final reading of 77762 miles.
My Investigation:
You have been charged for excess mileage above your allocation as per your signed terms and conditions. Please see the figures below:
Your total contracted mileage was 75.667
Your final reading was 77762
The pro-rated limit was 22838.4
Your excess mileage rate is 6 pence per mile plus VAT
Your excess mileage charge is £714.50 including VAT
When returning your vehicle early through a Voluntary Termination, we recalculate your mileage pro rata. This means we calculate a daily mileage allowance, based on the annual mileage you advised, which we then use to calculate how many miles you should have accrued at the time of returning your vehicle.
I refer you to your signed terms and conditions section 11.4;
11.4 If this Agreement terminates early, we will reduce the Maximum Total Mileage in the proportion which the actual period of hire bears to the period of hire originally agreed. Any excess mileage charge will be recalculated using that reduced Maximum Total Mileage.
I can confirmed, we have reviewed your inspection report from British Car Auctions and we are pleased to inform you, that you will not be charged any of the refurbishment costs.
Please note £714.50 including VAT for the excess mileage charges remains payable to satisfy the account. You can make payment using one of the following methods; "
AT THIS POINT I IGNORED LETTERS BECAUSE I WAS BUSY PAYING MYSELF BEFORE ANYONE ELSE AND IT WAS PASSED ONTO A DEBT RECOVERY AGENCY THAT WORKS IN PARTNERSHIP WITH VWFS.
IT WAS A STANDARD DEBT COLLECTION LETTER WITH BIG LETTERS STATING 'OUTSTANDING AMOUNT OWED' (Scare tactics)
Anyway, I sent them this email:
"Hi,
I have received a request for payment of an outstanding amount that remains on my account with VWFS.
At this current time, I am not happy on paying the full amount due to the nature of the charge and would offer a settlement amount of £400 which can arranged to be transferred to you at any time.
Please arrange a written response to this email with acceptance of full and final closure of the case for the amount stated above.
Thanks"
THIS WAS THEIR RESPONSE:
"Good morning,
Thank you for your email, please accept my apologies for the delay in responding.
Debt and Revenue Services have been instructed to contact you to discuss an overdue balance on your recent Volkswagen Financial Services (UK) Limited account.
There is currently an outstanding balance of £714.50 on your account.
We are able to offer a full and final settlement of your account, however we must ensure this meets the criteria set by our client. The amount needed would be £500.15, please could you confirm is this is acceptable and the date you are able to make this payment?
Alternatively I can confirm that we are able to set up an affordable payment plan to clear your balance via instalments."
I ended up paying this amount and settling the matter.
Hopefully this helps someone else out there so don't worry too much if you're in this situation. I could have continued to fight the case for excess mileage as its still disputable but I didn't want to spend any more time on this issue.
