Cancelling a finance contract

armcosurfer · 29 July 2016 at 4:59PM

Hi, my son recently bought an expensive mountain bike (£3700) on an interest free fixed sum loan agreement over 4 years. After just 2 weeks the front and rear suspension collapsed while he was riding it and he was very lucky to escape with minor cuts and bruises. The bike was repaired under warranty by the supplier, but after just another month,the suspension is beginning to make noises similar to what it had before. There is just a six month warranty on the bike and he has lost all confidence in this bike, now feeling that he will be left paying expensive repair bills for the next three and a half years until the finance is paid off.
He would like to return the bike and cancel the finance package without penalty, is this possible in any way? Would he be able to do this because the goods are of unsatisfactory quality or not fit for purpose? Thanks.

bris · 29 July 2016 at 7:15PM

As it's been 6 weeks the cooling off period will be up on the finance agreement so you can't just cancel it.

Timing is the key to the fault complaint. You have 30 days to reject faulty goods for a full refund or accept a repair. If the repair fails you have the balance of the 30 days plus the amount of time the repair took. So if the repair takes 10 days this will give you 40 days total to reject the goods. How long did your repair take?

If your outside the 30 days then your rights are with the 6 month rule but the retailer gets to decide the remedy so your refund will most likely not happen.

As your son took out the finance this also leave the finance co equally liable under S75 protection so you could also put your case to them.

armcosurfer · 29 July 2016 at 9:37PM

Hi ,thanks, my son has had the bike for just over 8 weeks although the bike was at the shop for repair for 2 of these weeks,would it come under the 6 week cooling off period in this case?
What is the 6 month rule and the S75 protection?

wealdroam · 29 July 2016 at 9:49PM

armcosurfer wrote: »

Hi ,thanks, my son has had the bike for just over 8 weeks although the bike was at the shop for repair for 2 of these weeks,would it come under the 6 week cooling off period in this case?
What is the 6 month rule and the S75 protection?

What is 'the 6 week cooling off period' you speak of?

The 'six month rule' is from The Consumer Rights Act.
During the first six months following the sale a fault is deemed inherent unless the seller proves otherwise.

Have you read MSE's Consumer Rights guide yet?

Read all about Section 75 of The Consumer Credit Act here.

[Deleted User] · 29 July 2016 at 10:27PM

wealdroam wrote: »

What is 'the 6 week cooling off period' you speak of?

It was forum user "Bris" who made reference to that, not the OP.

bris wrote: »

As it's been 6 weeks the cooling off period will be up on the finance agreement

Ectophile · 29 July 2016 at 10:51PM

The cooling off period for finance is normally just 14 days. Furthermore, cancelling the finance may not cancel the contract for the original bike purchase, just the finance.

wealdroam · 29 July 2016 at 10:56PM

Moneyineptitude wrote: »

It was forum user "Bris" who made reference to that, not the OP.

Ah, I think Bris was just noting that six weeks had passed since the purchase, not that the cooling off period was six weeks, and the cooling off period would've ended some time before that.

I'm sure Bris will correct me if I'm wrong.

unholyangel · 30 July 2016 at 12:35AM

Worth noting that under the consumer rights act, the retailer only gets 1 chance to repair.

(5)A consumer who has the right to a price reduction and the final right to reject may only exercise one (not both), and may only do so in one of these situations—

(a)after one repair or one replacement, the goods do not conform to the contract;

(b)because of section 23(3) the consumer can require neither repair nor replacement of the goods; or

(c)the consumer has required the trader to repair or replace the goods, but the trader is in breach of the requirement of section 23(2)(a) to do so within a reasonable time and without significant inconvenience to the consumer.

If the store refuse, you may be able to make a section 75 claim unless the same company you purchased from (ie bikes ltd) are the same company providing the finance.

armcosurfer · 30 July 2016 at 8:25PM

Ok, so to be clear on this, if he contacts the bike shop (and/or the finance company?) to tell them that they have had their one chance to repair the bike and that the bike is of unsatisfactory quality, will he be able to give the bike back to the store(or finance company?) and get the finance deal cancelled? He does not want compensation and is not concerned about getting the few monthly payments he's already made refunded,but he does not want a black mark on his credit file. Would it be better to write to the store and/or finance company rather than 'phone? Thanks.

unholyangel · 30 July 2016 at 8:50PM

The law actually allows for a full refund when exercising the short term right to reject or when exercising the final right to reject (which is what I posted above) within 6 months from purchase. So your son should be able to get a refund of whats he's paid already.

Yes, put it in writing. At least then you have a proven record of contacting them to report the fault etc should you need it. Try the retailer first pointing out the above (that under the consumer rights act, they only get 1 attempt to repair/replace), if they refuse, contact your credit provider about a section 75 claim, if they refuse then contact the financial ombudsman.

paddyrg · 30 July 2016 at 9:24PM

I think ultimately he'd be able to point to a reasonable expectation of a £3700 bike to last more than a few weeks, the courts would sympathise should it ever get to that stage. Hopefully it won't, though.

Cancelling a finance contract

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