Voluntary Termination

[Phillip B]

It seems I am one of many people wanting clarity on excess mileage charges after voluntary termination of a PCP agreement for a vehicle. It seems to be a very grey area.

So far I have had a few letters and conversations with BMW finance. Like many people in my position, I am quoting payment beyond 50% is all I need to pay according to the Credit Consumer Act, and that the excess mileage charge doesn't apply in this situation. BMW say it does. We have gone around in circles and finally they seem to be trying to convince me that we let the Financial Ombudsman rule on the decision.

My research suggests the Financial Ombudsman will side with BMW.

I have 2 questions.
- Am I right that I do not have to pay an excess mileage charge?
- What process should I follow/avoid going forward?

Many thanks

[R0b]

Re: Voluntary Termination

Hi Phillip, I would suggest you read the below link as your starting point.

http://www.legalbeagles.info/forums/showthread.php?77612-A-guide-to-voluntary-termination-Your-rights

Excess mileage is a bit of a grey area at the moment in the sense that there is no legally binding authority on this. However, from a purely legal perspective, the CCA prevents creditors from recovering damages for breaches of the contract that fall outside of the scope which is allowed. BMW these days seem to be relying on section 99(2) because it says that liabilities accrued prior to termination are not affected but section 100(1) overrules this by carving out exceptions.

Have a read of the above link it should answer your questions.

Regarding your second question, this is up to you but it seems that lenders like BMW are applying default markers to those who do not pay up and the only way of having it removed is to bring a claim in court. So if you don't have the guts to take it all the way then you might want to consider paying up.

[Jayne Bagshaw]

Re: Voluntary Termination

I wish to terminate my HP early (we have paid far more than 50%)
I am being told that as we have put the agreement in name of a Limited company that we are unable to terminate in this way - is this true or another attempt at get out ?
Many thanks

[Amethyst]

Re: Voluntary Termination

Do you have a copy of the contract and does it make any mention of different terms applying for a ltd company ?

[Jayne Bagshaw]

Re: Voluntary Termination

Do you have a copy of the contract and does it make any mention of different terms applying for a ltd company ?

Well - it just says its an 'unregulated' agreement and therefore the option is not there.

[R0b]

Re: Voluntary Termination

I wish to terminate my HP early (we have paid far more than 50%)
I am being told that as we have put the agreement in name of a Limited company that we are unable to terminate in this way - is this true or another attempt at get out ?
Many thanks

Correct, the option to VT applies to consumers only and if the agreement is in the name of a Ltd company then there is a presumption that it was entered into in the course of business - the Consumer Credit Act doesn't apply to businesses and the title of the legislation is an indicator of that.

[R0b]

Re: Voluntary Termination

I should qualify the point about not applying to businesses, it does in fact apply to partnerships but not Ltd companies.

[jackson030207]

Re: Voluntary Termination

Hi

Can I also ask a question please.

I am going through the same problems with Renault finance. They are pursuing me for damages and excess mileage of £1500. I have referred them to my contract which states
TERMINATION: YOUR RIGHTSYou have a right to end this agreement:To do so, you should write to the person you make your payments to. They willthen be entitled to the return of the goods and to half the total amountpayable under this agreement, that is £10281.80. If you have already paidat least this amount plus any overdue instalments and have taken reasonablecare of the goods, you will not have to pay any more.

They have argued this saying that it refers to rental payments however I have said why would they mention if I have taken reasonable care of the goods within the paragraph?

Do I fight this or give in?

[R0b]

Re: Voluntary Termination

Hello,

The last part of that statement is what is necessary - "If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more."
It's pretty clear cut but whether you choose to fight or give in its up to you.