VT of Vehicle PCP CCA S99 (2)

[enceladus84]

Hi,

I recently returned my car to BMW Financial Services by voluntary termination of my contract, I did so using the very helpful LegalBeagle letter template. My car car did have a small number of excess miles on it.

BMWFS have eventually responded with an invoice for the VT excess mileage, they stipulate Section 99 (2) of the CCA as below:

"Please note that the excess mileage charge is a pre-termination liability and is therefore payable under Section 99 (2) of the Consumer Credit Act which states that any pre-termination liability is not affected by termination under the voluntary termination provisions".

I've checked the other handy templates but they refer to section 100, can you advise how to proceed with this one?

All help appreciated.

Thanks

[Kati]

Re: VT of Vehicle PCP CCA S99 (2)

tagging [MENTION=71570]R0b[/MENTION] xx

[ostell]

Re: VT of Vehicle PCP CCA S99 (2)

Comment has been made before that is not a pre termination liability, ie an invoice had not been submitted to you prior to termination.. There was no liability to pay before termination and therefore it is included in the no further charges after the 50%.

[R0b]

Re: VT of Vehicle PCP CCA S99 (2)

Hello,

The template is exactly that and is not a one size fits all and may need to be adapted to suit different situations. BMW are not wrong about liability accruing before termination but s.100 still remains a valid point because s.99 and s.100 need to be read together to fully understand the liability. Sadly, BMW have selectively used certain provisions of the CCA to make it look as though they are in the right.

Under s.100, it specifically states that where the agreement is terminated in accordance with s.99, liability is limited to one half of the total amount payable including any sums due in respect of the total price immediately before the termination took place.

The key point to note is the last part of the sentence underlined. Only the sums due relating to the total price immediately before the termination took effect is what your liable to account for and what this means in reality is any overdue monthly instalments but nothing else. This is because the definition of 'total price' excludes damages for breach or for compensation or for any charges deemed a penalty. Anyhow, I've quickly drafted an example of how you can respond to their letter - adapt to suit your situation.


Dear Sir or Madam,

I am writing further to your letter dated [DATE], the contents of which are noted.

In your letter you mentioned that the reason why I am liable for excess mileage is because section 99(2) of the CCA states that termination of the agreement does not affect liability accrued before termination. Whilst I do not disagree with this statement, it would appear that you are misguided in your understanding of a debtors liability because to understand such liability, section 99 and section 100 must be read together.

For the avoidance of doubt, section 100(1) says the following:

Where a regulated hire-purchase or regulated conditional sale agreement is terminated under section 99 the debtor shall be liable, unless the agreement provides for a smaller payment, or does not provide for any payment, to pay to the 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. (emphasis added)

As you will see from the above, liability following termination is limited to half of the total amount payable including any sums relating to the total price that became due immediately before the termination of the agreement. To clarify, 'total price' is defined in section 189 of the CCA as:

the total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement. (emphasis added)

Again, the total price specifically excludes any sums owed for breaches of the agreement, penalty charges or compensation. The excess mileage charges you seek are in fact damages for breaching the terms of the agreement, namely clause [NUMBER]. Therefore, the excess mileage charges do not form part of the total price and as such, fall into the damages and/or the compensation category, which is effectively excluded for the purposes of calculating the total liability of a debtor where termination under section 99 has been invoked.

I would be grateful if you could confirm by return that you accept the above position and the matter will now be closed. If however, you do not agree with my interpretation above, please could you provided detailed reasons as to why the excess mileage charges are recoverable under section 100(1).

I look forward to hearing from you confirming that the matter is now closed.

Yours faithfully,

[NAME]