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Hi All
Was just looking for a bit of advice if possible please - I VT'd my car last year after being impacted by COVID and not being able to continue with payments.
I had fully paid over 50% of the total cost and kept up payments until the VT was processed however after I had chased and not heard anything they eventually sent me a bill for nearly £2000 - there were some mixups where they detailed the wrong amounts and the dealership said the car looked fine and unlikely to cost anything to hand back (granted I wasnt asked to sign anything and GMAC are now claiming the only inspection done was one when they collected the car from the dealership and not when I was there)
Anyway, long story short i did a bit of research as I felt I shouldnt be liable for over £2000 (the bulk of which is noted as excess mileage) so I raised a formal complaint but unsurprisingly they did not uphold it and have said its their final position on the matter and i should contact their recoveries team to arrange payment.
They've also stated that their credit agreements are structured as "Conditional Sale Agreements" and the case law i refer to is for Hire Purchase?
I've pasted the letter in below (apologies its so long), but just wanted some thoughts on what my next steps should be? Just to be clear, I dont feel I should pay this and prepared to take it as far as is required but wondered if there is another letter should type and send etc?
Thanks in advance for any help
LETTER RECEIVED :
We are writing to you regarding a complaint we acknowledged on the 26th January 2021 and all subsequent correspondence regarding your complaint. We are sorry you feel this way and apologise for any inconvenience caused. Having investigated and considered your complaint carefully, your complaint is partially upheld. Further information including a summary of your complaint, our findings and our conclusion is set out below.
Background
We previously acknowledged your dissatisfaction with the service you had received. We understood that you were disputing the charges levied to the finance agreement for excess mileage, additional products and damages identified to the above vehicle; following you exercising your rights to voluntary terminate the finance agreement. In addition to the above, you also explained that you were not given the opportunity to repair the vehicle yourself and you would like our assistance to investigate your concerns.
Findings
Please allow us to explain that all vehicle collections are completed in the same manner and that as part of the voluntary termination process, when the vehicle is returned it is inspected for damage prior to being sold at auction. In determining what amounts to damage, we choose to abide by a strict code of conduct in accordance with the guidelines set out by the British Vehicle Rental and Leasing Association because it gives us an
independent view of what is “fair & reasonable condition”.
We would like to make you aware that under the Consumer Credit Act, we are entitled to recover amounts relating to damage where you have failed to take reasonable care of the vehicle.
May we also refer you to the
Consumer Credit Act Section 100 (4) which details:
If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.
We note that the inspection completed to your vehicle identified the following charges:
Front bonnet scratched: - £38.00 | Near side front door dented: - £90.00
Front bumper scratched: - £38.00 | Off side front door poor repair: - £125.00
Off side front wheel scratched - £60.00 | Incomplete service history: - £270.00
We can confirm the damages identified to the vehicle upon hand back totalled: £621.00.
May we refer you to our voluntary termination pack which confirms the following:
Bodywork
The vehicle body must be sound, well-maintained and free from any panel damage or disfigurement. Any impact damage to the chassis or underbody will not be acceptable. Small areas of chipping are acceptable as are light scratched up to 25mm in length (relative to the vehicle’s age).
Paint work
All paint work on the vehicle, including bodywork, side mirrors and bumpers/moldings should be in their original condition, with no areas of discolouration, rust or corrosion. Some light stone chipping, and very minor dents up to 10mm are acceptable. If chips or scratches have exposed primer or bare metal, the customer should ensure that such damage has been appropriately and professionally repaired before inspection. Minor scuffing to bumpers up to 25mm is acceptable.
Repairs
Repairs which have been made to the vehicle before its return must have been carried out to an expert standard, by professional repairers, and be covered by a warranty which can be transferred. Repairs made to a poor standard are not acceptable (e.g. poor paint match, quality or finish).
Wheels, Tyres & Trims
All wheel trims, where fitted, must be present when the vehicle is returned, and trims and rims must be free from holes and dents. Alloy wheels with minor scuffing are acceptable up to 25mm in length. Scoring and other damage to alloy wheels are outside of fair wear and tear.
May we also refer you to the following clause of your legally binding signed Conditional Sale Agreement:
Clause 20: Care of the Vehicle
20.2. You will keep the Vehicle in good condition and repair which means that the Vehicle must: have a service booklet stamped by an authorised dealer showing that it has been regularly serviced and maintained in accordance with the manufacturer’s or UK distributor’s recommendations; have a valid and current MOT and require little or no work for a new certificate; need no refurbishment for retail sale; be free from mechanical or body damage; in its original paintwork and trim and with its interior matching the original specification free from damage, all subject to fair wear and tear
appropriate to the age and mileage of the Vehicle.
We believe you had the opportunity to read the contract before signing, to acknowledge that it has been read, understood and that he agreed to the terms of the Conditional Sale Agreement. We must also stress that it is the responsibility of the proposed customer to carefully read the documents they are signing. Please allow us to explain we have received the signed documentation with your authorisation from the dealership and have set
up the agreement in good faith.
Please allow us to confirm that there is no legal requirement that repairs are carried out to rectify the damage, as the monies claimed for the damage are intended to compensate us for the deterioration in value of the vehicle. We can confirm that following inspection of the vehicle, it was classed as a Grade 3 (5 being the lowest) under the NAMA Grading Scheme (National Association of Motor Auctions).
As you are aware our voluntary terminations department have reviewed the damages and agreed to remove
the following charges:
Front bonnet scratched: - £38.00
Front bumper scratched: - £38.00
Off side front door poor repair: - £125.00
The removal of the above charge has now reduced the damage liability to £420.00.
The remaining charges have been levied correctly and falls outside our fair wear and tear guide along with the BVRLA’s. In addition to the above charges, we note that the vehicle was also returned with incomplete service history with no service stamps therefore a charge of £270.00 became payable.
As confirmed within your contract with us, the vehicle must be regularly serviced in line with the manufacturers recommendations to insure it is being
maintained accordingly. Also, as confirmed in our Damage Charging Matrix as part of a vehicle handback if the vehicle is returned to us with an incomplete service history a charge of £270.00 becomes payable.
In relation to your concerns raised regarding your photographic evidence showing that there was no damage to the vehicle. Unfortunately due to the distance that the photographs were taken we cannot determine the damages in each image.
Please be advised that any repairs required to your vehicle are your responsibility to undertake, as per Section 20.1 of your signed legally binding contract which states:
20.1. You will only use the Vehicle in accordance with the manufacturer’s instructions and all applicable laws and regulations. All risk in the Vehicle will pass to you on delivery and you will be responsible for any loss or damage to it even if it is not your fault. You will carry out any repairs and replace parts when necessary. All repairs and replacement parts will become part of the Vehicle.
Although we appreciate your comments in relation to you not having the opportunity to repair the damages yourself, please allow us to confirm that at no point before or after the vehicle was collected that we were aware that you wanted the opportunity to carry out the repairs yourself.
Please be advised that any repairs needed should have been carried out before returning the vehicle to us, and must be done in accordance with the
manufacturer.
In relation to the extract you have quoted and comments regarding the mileage charges, we have reviewed this element of your complaint and we can confirm that the excess mileage charge has been levied correctly.
Please find below our legal position on these charges:
The Agreement expressly makes it clear that if you do not keep to the annual and total mileage limits, you will need to pay us £0.09 for each extra mile covered;
Your responsibility for paying these sums either accrued (a) before termination (and therefore falls under Section 99(2) of the CCA) or (b) because you failed to take reasonable care of the Vehicle (and the mileage limit set out our expectations on what reasonable care would be) (and therefore falls under Section 100(4) of the CCA); The liability for excess mileage accrued before termination. This is because:
(a) you told us (and we relied on your promise) that you would not exceed the Vehicle's yearly mileage limit of 6,000 (which was a total of 24,000 miles if you kept the Vehicle for the full four year term). We based our offer of finance on that promise;
(b) your promise (and agreement to the excess mileage charge) meant you incurred a liability for those charges before the Agreement for the financing of the Vehicle was terminated by you.
There can be no other sensible interpretation of the Agreement's terms: you clearly agreed that if "you do not proceed to purchase the vehicle on the Expiry Date you will have to pay an excess mileage charge for every mile in excess of the mileage limit";
(c) the liability was therefore incurred before the Agreement for the financing of the Vehicle terminated; the calculation of that liability was undertaken when the Vehicle was inspected by a third party;
(d) using the same principle, if you had incurred a late fee of £15.00 for an arrears letter before the Agreement terminated, any termination by you under Section 99(1) would not stop you being responsible for paying this late fee to us (because you had incurred that liability before termination);
Your decision to exceed the Vehicle's mileage is evidence of your failure to take reasonable care of the Vehicle. This is because:
(e) when setting the final repayment and the monthly repayments, we took into account the agreed mileage limit. By telling us you wanted a yearly mileage limit of 6,000, this meant your monthly payments were lower than they should have been and the final repayment was higher than it should have been;
(f) if you had told us you wanted a yearly mileage limit of (say) 10,000 (instead of 6,000), you would have needed to pay more each month (but the final payment would have been smaller). You would then have paid more to us for the Vehicle by the time you handed the vehicle back (but you would have been under your mileage limit);
(g) the Agreement's terms made it clear that you must take reasonable care of the Vehicle (see, for example, clause 20.2 of the Agreement). If you fail to do so, you are responsible for our loss.
he Agreement's terms, which clearly state a mileage limit, therefore require you to (amongst other things) not exceed the mileage limit.
If you exceed it, you will have failed to take reasonable care of the Vehicle by using it excessively (and the Vehicle's market value will, of course, be less than it should).
This principle is very common: for example, if you left the Vehicle in an unsafe place meaning it was damaged, you would be responsible for the cost of fixing the Vehicle under Section 100(4) of the CCA (and we assume you accept this principle). Using the same principle, your decision to use the Vehicle more than you said you would means you need to compensate us for failing to keep it in the condition we expected (and you told us) it would be returned to us in;
the County Court's decision in Mercedes-Benz Financial Services (UK) Limited v Cahalane (2018), Unreported, 26 February 2018, County Court at Willesden is not relevant:
(h) it is a decision of the County Court and therefore not binding on any other County
Court;
(i) our position does not rely on an interpretation of the meaning of "total price": our position is either (i) the excess mileage charges accrued before termination and are recoverable under Section 99(2) of the CCA or (ii) you failed to take reasonable care of the Vehicle by exceeding the agreed mileage so the amount recoverable under Section 100(1) was increased by the amount of the excess mileage charges (see Section 100(4) of the CCA).
there are good public policy reasons why our position is right. If it were not, then it would allow a customer to wrongly tell a lender it only intended to cover a very small number of miles (so the monthly repayments would be low), but then significantly exceed that agreed mileage limit, and then exercise their right under Section 99(1) of the CCA to avoid having to pay any excess mileage charges (despite choosing to drive the vehicle more than they agreed to do). However, a customer who did not exercise that right would end up with a vehicle worth less than the parties expected (assuming the customer kept to the mileage limit) it would be worth at the end.
This cannot have been the intention of the CCA to effectively create a windfall for customers who use a system which was designed to help customers in financial difficulties. In relation to the statement you have provided referring to the Court of Appeal case Brady v St. Margaret's Trust [1963] 3 W.L.R 1162 which dealt with the extent of a hirer's duty to take reasonable care of a vehicle.
Please allow us to explain that all of our credit agreements are structured as Conditional Sale Agreements and the case law you have quoted refers to Hire Purchase Agreements and not Conditional Sale Agreements. We would like to refer you to your signed contract which became legally binding on the 14th October 2016 which confirms the following information under clause 5 - Financial details:
If you do not fulfil your obligation to keep within the annual mileage limit of 6,000 and the total return mileage of 24,000 and you do not proceed to purchase the vehicle on the expiry date you will have to pay an excess mileage charge for every mile in excess of the mileage limit. Any excess miles will be charged at 9p/mile inclusive of VAT.
Upon hand-back of your vehicle, you had completed 39,338 miles, however due to an administration error the excess mileage was recorded as 39,075. Please allow us to apologise for this error.
We can confirm that as per Section 6 of your contract, the charge of 9p per mile has been applied, equating to £1,356.75 which has been levied correctly to your agreement.
We can confirm that there is also insurance liability outstanding, we understand that you have previously agreed to pay this amount. However please allow us to explain that when the agreement was set up at point of sale the funds were provided by us to the supplying dealership to pay for the GAP insurance to be purchased.
The amount totalling £299.00 (GAP insurance) was then incorporated into the monthly instalments. The above additional product were paid in full at point of sale and then broken down and repaid as part of the monthly repayments.
May we draw your attention to Section 7 of your signed legally binding contract which details the following:
“Please note that the Termination and Repossession rights set out in the notices above only apply to that part of this Agreement which relates to the Vehicle. The Figures shown in the notices do not include any amounts payable with respect to any GAP insurance or Warranty you have purchased.”
We can confirm that there is a remaining balance of £41.22 left to pay for the additional products.
Conclusions
In conclusion, we can confirm that all remaining charges levied to your finance agreement are payable and have been levied correctly in line with your contract and our Voluntary Termination process. The liability remaining is as follows:
Damage charges: £420.00
Excess mileage: £1,356.75
Additional products: £41.22
The total liability remaining is: £1,817.97
We may only recommend that you contact our Legal & Recoveries Department to discuss a repayment plan affordable to you for the sums remaining at your earliest opportunity.
We appreciate this is not the response you were hoping for and that this news will come as a disappointment to you, but we will now close your complaint. We thank you for contacting us and allowing us the opportunity to investigate and reply.
For the purposes of complaint management and to comply with Financial Conduct Authority guidelines, we respectfully advise this letter constitutes our final response to your complaint. Should you remain dissatisfied you have the right to refer your complaint to the Financial Ombudsman Service, free of charge - but you must do so within six months of the date of this letter. If you do not refer your complaint in time, the Ombudsman
will not have our permission to consider your complaint and so will only be able to do so in very limited circumstances. For example, if the Ombudsman believes that the delay was as a result of exceptional circumstances.
Should you wish to escalate your complaint to the Financial Ombudsman Service, you can action this via their website which is as follows: www.financial-ombudsman.org.uk. Their website will explain your rights and obligations in this regard.
If you require any further assistance with this matter please do not hesitate to contact our Customer Relations
Team on telephone number 0344 871 2222 our opening times are 09.00 – 17.00 Monday to Friday. Alternatively,
you can email us at GBCAR-CSC-Complaints@Vauxhallfinance.com.
@R0B
Was just looking for a bit of advice if possible please - I VT'd my car last year after being impacted by COVID and not being able to continue with payments.
I had fully paid over 50% of the total cost and kept up payments until the VT was processed however after I had chased and not heard anything they eventually sent me a bill for nearly £2000 - there were some mixups where they detailed the wrong amounts and the dealership said the car looked fine and unlikely to cost anything to hand back (granted I wasnt asked to sign anything and GMAC are now claiming the only inspection done was one when they collected the car from the dealership and not when I was there)
Anyway, long story short i did a bit of research as I felt I shouldnt be liable for over £2000 (the bulk of which is noted as excess mileage) so I raised a formal complaint but unsurprisingly they did not uphold it and have said its their final position on the matter and i should contact their recoveries team to arrange payment.
They've also stated that their credit agreements are structured as "Conditional Sale Agreements" and the case law i refer to is for Hire Purchase?
I've pasted the letter in below (apologies its so long), but just wanted some thoughts on what my next steps should be? Just to be clear, I dont feel I should pay this and prepared to take it as far as is required but wondered if there is another letter should type and send etc?
Thanks in advance for any help
LETTER RECEIVED :
We are writing to you regarding a complaint we acknowledged on the 26th January 2021 and all subsequent correspondence regarding your complaint. We are sorry you feel this way and apologise for any inconvenience caused. Having investigated and considered your complaint carefully, your complaint is partially upheld. Further information including a summary of your complaint, our findings and our conclusion is set out below.
Background
We previously acknowledged your dissatisfaction with the service you had received. We understood that you were disputing the charges levied to the finance agreement for excess mileage, additional products and damages identified to the above vehicle; following you exercising your rights to voluntary terminate the finance agreement. In addition to the above, you also explained that you were not given the opportunity to repair the vehicle yourself and you would like our assistance to investigate your concerns.
Findings
Please allow us to explain that all vehicle collections are completed in the same manner and that as part of the voluntary termination process, when the vehicle is returned it is inspected for damage prior to being sold at auction. In determining what amounts to damage, we choose to abide by a strict code of conduct in accordance with the guidelines set out by the British Vehicle Rental and Leasing Association because it gives us an
independent view of what is “fair & reasonable condition”.
We would like to make you aware that under the Consumer Credit Act, we are entitled to recover amounts relating to damage where you have failed to take reasonable care of the vehicle.
May we also refer you to the
Consumer Credit Act Section 100 (4) which details:
If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.
We note that the inspection completed to your vehicle identified the following charges:
Front bonnet scratched: - £38.00 | Near side front door dented: - £90.00
Front bumper scratched: - £38.00 | Off side front door poor repair: - £125.00
Off side front wheel scratched - £60.00 | Incomplete service history: - £270.00
We can confirm the damages identified to the vehicle upon hand back totalled: £621.00.
May we refer you to our voluntary termination pack which confirms the following:
Bodywork
The vehicle body must be sound, well-maintained and free from any panel damage or disfigurement. Any impact damage to the chassis or underbody will not be acceptable. Small areas of chipping are acceptable as are light scratched up to 25mm in length (relative to the vehicle’s age).
Paint work
All paint work on the vehicle, including bodywork, side mirrors and bumpers/moldings should be in their original condition, with no areas of discolouration, rust or corrosion. Some light stone chipping, and very minor dents up to 10mm are acceptable. If chips or scratches have exposed primer or bare metal, the customer should ensure that such damage has been appropriately and professionally repaired before inspection. Minor scuffing to bumpers up to 25mm is acceptable.
Repairs
Repairs which have been made to the vehicle before its return must have been carried out to an expert standard, by professional repairers, and be covered by a warranty which can be transferred. Repairs made to a poor standard are not acceptable (e.g. poor paint match, quality or finish).
Wheels, Tyres & Trims
All wheel trims, where fitted, must be present when the vehicle is returned, and trims and rims must be free from holes and dents. Alloy wheels with minor scuffing are acceptable up to 25mm in length. Scoring and other damage to alloy wheels are outside of fair wear and tear.
May we also refer you to the following clause of your legally binding signed Conditional Sale Agreement:
Clause 20: Care of the Vehicle
20.2. You will keep the Vehicle in good condition and repair which means that the Vehicle must: have a service booklet stamped by an authorised dealer showing that it has been regularly serviced and maintained in accordance with the manufacturer’s or UK distributor’s recommendations; have a valid and current MOT and require little or no work for a new certificate; need no refurbishment for retail sale; be free from mechanical or body damage; in its original paintwork and trim and with its interior matching the original specification free from damage, all subject to fair wear and tear
appropriate to the age and mileage of the Vehicle.
We believe you had the opportunity to read the contract before signing, to acknowledge that it has been read, understood and that he agreed to the terms of the Conditional Sale Agreement. We must also stress that it is the responsibility of the proposed customer to carefully read the documents they are signing. Please allow us to explain we have received the signed documentation with your authorisation from the dealership and have set
up the agreement in good faith.
Please allow us to confirm that there is no legal requirement that repairs are carried out to rectify the damage, as the monies claimed for the damage are intended to compensate us for the deterioration in value of the vehicle. We can confirm that following inspection of the vehicle, it was classed as a Grade 3 (5 being the lowest) under the NAMA Grading Scheme (National Association of Motor Auctions).
As you are aware our voluntary terminations department have reviewed the damages and agreed to remove
the following charges:
Front bonnet scratched: - £38.00
Front bumper scratched: - £38.00
Off side front door poor repair: - £125.00
The removal of the above charge has now reduced the damage liability to £420.00.
The remaining charges have been levied correctly and falls outside our fair wear and tear guide along with the BVRLA’s. In addition to the above charges, we note that the vehicle was also returned with incomplete service history with no service stamps therefore a charge of £270.00 became payable.
As confirmed within your contract with us, the vehicle must be regularly serviced in line with the manufacturers recommendations to insure it is being
maintained accordingly. Also, as confirmed in our Damage Charging Matrix as part of a vehicle handback if the vehicle is returned to us with an incomplete service history a charge of £270.00 becomes payable.
In relation to your concerns raised regarding your photographic evidence showing that there was no damage to the vehicle. Unfortunately due to the distance that the photographs were taken we cannot determine the damages in each image.
Please be advised that any repairs required to your vehicle are your responsibility to undertake, as per Section 20.1 of your signed legally binding contract which states:
20.1. You will only use the Vehicle in accordance with the manufacturer’s instructions and all applicable laws and regulations. All risk in the Vehicle will pass to you on delivery and you will be responsible for any loss or damage to it even if it is not your fault. You will carry out any repairs and replace parts when necessary. All repairs and replacement parts will become part of the Vehicle.
Although we appreciate your comments in relation to you not having the opportunity to repair the damages yourself, please allow us to confirm that at no point before or after the vehicle was collected that we were aware that you wanted the opportunity to carry out the repairs yourself.
Please be advised that any repairs needed should have been carried out before returning the vehicle to us, and must be done in accordance with the
manufacturer.
In relation to the extract you have quoted and comments regarding the mileage charges, we have reviewed this element of your complaint and we can confirm that the excess mileage charge has been levied correctly.
Please find below our legal position on these charges:
The Agreement expressly makes it clear that if you do not keep to the annual and total mileage limits, you will need to pay us £0.09 for each extra mile covered;
Your responsibility for paying these sums either accrued (a) before termination (and therefore falls under Section 99(2) of the CCA) or (b) because you failed to take reasonable care of the Vehicle (and the mileage limit set out our expectations on what reasonable care would be) (and therefore falls under Section 100(4) of the CCA); The liability for excess mileage accrued before termination. This is because:
(a) you told us (and we relied on your promise) that you would not exceed the Vehicle's yearly mileage limit of 6,000 (which was a total of 24,000 miles if you kept the Vehicle for the full four year term). We based our offer of finance on that promise;
(b) your promise (and agreement to the excess mileage charge) meant you incurred a liability for those charges before the Agreement for the financing of the Vehicle was terminated by you.
There can be no other sensible interpretation of the Agreement's terms: you clearly agreed that if "you do not proceed to purchase the vehicle on the Expiry Date you will have to pay an excess mileage charge for every mile in excess of the mileage limit";
(c) the liability was therefore incurred before the Agreement for the financing of the Vehicle terminated; the calculation of that liability was undertaken when the Vehicle was inspected by a third party;
(d) using the same principle, if you had incurred a late fee of £15.00 for an arrears letter before the Agreement terminated, any termination by you under Section 99(1) would not stop you being responsible for paying this late fee to us (because you had incurred that liability before termination);
Your decision to exceed the Vehicle's mileage is evidence of your failure to take reasonable care of the Vehicle. This is because:
(e) when setting the final repayment and the monthly repayments, we took into account the agreed mileage limit. By telling us you wanted a yearly mileage limit of 6,000, this meant your monthly payments were lower than they should have been and the final repayment was higher than it should have been;
(f) if you had told us you wanted a yearly mileage limit of (say) 10,000 (instead of 6,000), you would have needed to pay more each month (but the final payment would have been smaller). You would then have paid more to us for the Vehicle by the time you handed the vehicle back (but you would have been under your mileage limit);
(g) the Agreement's terms made it clear that you must take reasonable care of the Vehicle (see, for example, clause 20.2 of the Agreement). If you fail to do so, you are responsible for our loss.
he Agreement's terms, which clearly state a mileage limit, therefore require you to (amongst other things) not exceed the mileage limit.
If you exceed it, you will have failed to take reasonable care of the Vehicle by using it excessively (and the Vehicle's market value will, of course, be less than it should).
This principle is very common: for example, if you left the Vehicle in an unsafe place meaning it was damaged, you would be responsible for the cost of fixing the Vehicle under Section 100(4) of the CCA (and we assume you accept this principle). Using the same principle, your decision to use the Vehicle more than you said you would means you need to compensate us for failing to keep it in the condition we expected (and you told us) it would be returned to us in;
the County Court's decision in Mercedes-Benz Financial Services (UK) Limited v Cahalane (2018), Unreported, 26 February 2018, County Court at Willesden is not relevant:
(h) it is a decision of the County Court and therefore not binding on any other County
Court;
(i) our position does not rely on an interpretation of the meaning of "total price": our position is either (i) the excess mileage charges accrued before termination and are recoverable under Section 99(2) of the CCA or (ii) you failed to take reasonable care of the Vehicle by exceeding the agreed mileage so the amount recoverable under Section 100(1) was increased by the amount of the excess mileage charges (see Section 100(4) of the CCA).
there are good public policy reasons why our position is right. If it were not, then it would allow a customer to wrongly tell a lender it only intended to cover a very small number of miles (so the monthly repayments would be low), but then significantly exceed that agreed mileage limit, and then exercise their right under Section 99(1) of the CCA to avoid having to pay any excess mileage charges (despite choosing to drive the vehicle more than they agreed to do). However, a customer who did not exercise that right would end up with a vehicle worth less than the parties expected (assuming the customer kept to the mileage limit) it would be worth at the end.
This cannot have been the intention of the CCA to effectively create a windfall for customers who use a system which was designed to help customers in financial difficulties. In relation to the statement you have provided referring to the Court of Appeal case Brady v St. Margaret's Trust [1963] 3 W.L.R 1162 which dealt with the extent of a hirer's duty to take reasonable care of a vehicle.
Please allow us to explain that all of our credit agreements are structured as Conditional Sale Agreements and the case law you have quoted refers to Hire Purchase Agreements and not Conditional Sale Agreements. We would like to refer you to your signed contract which became legally binding on the 14th October 2016 which confirms the following information under clause 5 - Financial details:
If you do not fulfil your obligation to keep within the annual mileage limit of 6,000 and the total return mileage of 24,000 and you do not proceed to purchase the vehicle on the expiry date you will have to pay an excess mileage charge for every mile in excess of the mileage limit. Any excess miles will be charged at 9p/mile inclusive of VAT.
Upon hand-back of your vehicle, you had completed 39,338 miles, however due to an administration error the excess mileage was recorded as 39,075. Please allow us to apologise for this error.
We can confirm that as per Section 6 of your contract, the charge of 9p per mile has been applied, equating to £1,356.75 which has been levied correctly to your agreement.
We can confirm that there is also insurance liability outstanding, we understand that you have previously agreed to pay this amount. However please allow us to explain that when the agreement was set up at point of sale the funds were provided by us to the supplying dealership to pay for the GAP insurance to be purchased.
The amount totalling £299.00 (GAP insurance) was then incorporated into the monthly instalments. The above additional product were paid in full at point of sale and then broken down and repaid as part of the monthly repayments.
May we draw your attention to Section 7 of your signed legally binding contract which details the following:
“Please note that the Termination and Repossession rights set out in the notices above only apply to that part of this Agreement which relates to the Vehicle. The Figures shown in the notices do not include any amounts payable with respect to any GAP insurance or Warranty you have purchased.”
We can confirm that there is a remaining balance of £41.22 left to pay for the additional products.
Conclusions
In conclusion, we can confirm that all remaining charges levied to your finance agreement are payable and have been levied correctly in line with your contract and our Voluntary Termination process. The liability remaining is as follows:
Damage charges: £420.00
Excess mileage: £1,356.75
Additional products: £41.22
The total liability remaining is: £1,817.97
We may only recommend that you contact our Legal & Recoveries Department to discuss a repayment plan affordable to you for the sums remaining at your earliest opportunity.
We appreciate this is not the response you were hoping for and that this news will come as a disappointment to you, but we will now close your complaint. We thank you for contacting us and allowing us the opportunity to investigate and reply.
For the purposes of complaint management and to comply with Financial Conduct Authority guidelines, we respectfully advise this letter constitutes our final response to your complaint. Should you remain dissatisfied you have the right to refer your complaint to the Financial Ombudsman Service, free of charge - but you must do so within six months of the date of this letter. If you do not refer your complaint in time, the Ombudsman
will not have our permission to consider your complaint and so will only be able to do so in very limited circumstances. For example, if the Ombudsman believes that the delay was as a result of exceptional circumstances.
Should you wish to escalate your complaint to the Financial Ombudsman Service, you can action this via their website which is as follows: www.financial-ombudsman.org.uk. Their website will explain your rights and obligations in this regard.
If you require any further assistance with this matter please do not hesitate to contact our Customer Relations
Team on telephone number 0344 871 2222 our opening times are 09.00 – 17.00 Monday to Friday. Alternatively,
you can email us at GBCAR-CSC-Complaints@Vauxhallfinance.com.
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