Challenging Excess Mileage Charge on PCP Deal

HungryGamer

I've recently arranged to terminate a PCP deal on a car I've had for 3 years. While there is no fee for volutary termination, I will incur a significant penalty fee for excess mileage.

The angst I have with this is that when I bought the car, I traded in an older version of the same model which averaged between 10-12k mileage per year. The salesperson's initial projections for monthly payments on the new car were out of my price range so I wasn't willing to proceed. The salesperson's tactic then changed and I was offered the deal on an agreed mileage of 6k per year which made the payments affordable for me.

I cited my concern with this deal as it was impossible for me to stay within this mileage allowance but the salesperson said it would be ok as when I want to go for a newer car, they would be able to 'do something' for me as long as I came back to them. The expectation I was given was that I wouldn't be penalised for going over the mileage as they would offset as part of a deal.

On trying to do a deal recently for a new model at the same garage, I was shocked to learn of the massive depreciation in value with almost a difference of £4k between what they would offer me and what the outstanding loan sat at. Obviously the flexibility on what deals they could do had been restricted since my last visit and I was informed my only option was to take out a negative equity loan alongside the new car loan or to do a voluntary termination at 3 year point.

I understand the terms of the agreement from the finance company's perspective, however I feel totally conned in terms of the expectations set by the broker (salesperson) in getting me to agree the deal.

Has anyone had a similar experience and taken any action?

Do I have any grounds for challenging this on a mis-sold or irresponsible lending basis?

ILW

Can you prove that you were told there would be little or no mileage penalty?

If not you have nothing to go on, but they have an agreement signed by yourself.

bargainbetty

Unless you have contractual proof that the agreement was as you state, you have little or no recourse. The chances are that the salesperson who promised that no longer works there anyway, and probably wouldn't admit to it if they did.

You signed a contract. The terms you will be held to are in it. I know this isn't what you want to hear, but legally it will come down to them claiming that you deliberately agreed to a contract you might not abide by to get a better deal, thinking you could wheedle out of it later - six of one, half a dozen of the other, and if you are a reasonably smart person the judge will assume you were competent to read and understand a contract.

This isn't what you want to hear, but personally I would VT it, pay the penalty (by installments if necessary) and go to a different damned dealership.

Janie4Now

I agree with BargainBetty that if you don't have any proof of what the salesperson told you then you are stuck with the agreement that you signed. Unless, by some miracle, the salesperson is still there, acknowledges that this is what they told you and the dealership then feels honour bound to take responsibility.

I don't know what your car was/is worth, but if you were buying it with an agreed mileage could there have been a guaranteed trade-in value, too? Sometimes these things come as a package.

In any case, you have, after all, had the benefit of lower payments for the past 3 years because of that lower mileage.....you were going to have to pay for it sooner or later!

HungryGamer

Thanks for responses, which I expected. I was hoping for a precedent that I might be able to base a challenge on. Interesting to hear I can repay it by instalments so not a total disappointment.

One point to note though is that I believe the Seller still works there. Probably clutching at straws but I will attempt a challenge on the basis of mis-selling. I've spoken to others and understand the small-print of contracts is not always a clear-cut defence in these cases, and the customer's recollection and interpretation at point of sale is taken into account by regulators.

pheonixrising21

HungryGamer wrote: »

I've recently arranged to terminate a PCP deal on a car I've had for 3 years. While there is no fee for volutary termination, I will incur a significant penalty fee for excess mileage.

The angst I have with this is that when I bought the car, I traded in an older version of the same model which averaged between 10-12k mileage per year. The salesperson's initial projections for monthly payments on the new car were out of my price range so I wasn't willing to proceed. The salesperson's tactic then changed and I was offered the deal on an agreed mileage of 6k per year which made the payments affordable for me.

I cited my concern with this deal as it was impossible for me to stay within this mileage allowance but the salesperson said it would be ok as when I want to go for a newer car, they would be able to 'do something' for me as long as I came back to them. The expectation I was given was that I wouldn't be penalised for going over the mileage as they would offset as part of a deal.

On trying to do a deal recently for a new model at the same garage, I was shocked to learn of the massive depreciation in value with almost a difference of £4k between what they would offer me and what the outstanding loan sat at. Obviously the flexibility on what deals they could do had been restricted since my last visit and I was informed my only option was to take out a negative equity loan alongside the new car loan or to do a voluntary termination at 3 year point.

I understand the terms of the agreement from the finance company's perspective, however I feel totally conned in terms of the expectations set by the broker (salesperson) in getting me to agree the deal.

Has anyone had a similar experience and taken any action?

Do I have any grounds for challenging this on a mis-sold or irresponsible lending basis?

If you dont mind me asking, what type of car is it? I fail to see how a car with max 36000 miles on it can be worth £4k less than the GFV for a car with 18000 miles on the clock?

From doing mystery shops at car dealers, i have noticed that the GFV for a 12k per year car (Yaris sized) is around £400-600 less than a 6k per year car. Certainly nowhere near £4000!! If you have done 12k per year miles your car should be worth at least the GFV of that. Can you remember what this was when the salesman calculated your payments based on this that you said you couldn't afford?

Idiophreak

I know it doesn't really help, but I can say that I've been told exactly the same thing in the past..."oh, you're over the agreed milage? Just come back to us and we'll sort it out"...I've been back to them a couple of times since and have been offered pathetic amounts of money for the car, which really doesn't help. How much is it going to cost you in excess mileage?

Have you looked at the value of your car in a private sale? I get the impression when my time comes, I'm going to be better off raising the cash to buy the thing, then sell it on privately, then sort a new car.

Finally, have you spoken to any other dealerships to see what valuation they'd give you for your car? Sometimes dealers like to try and poach customers from other brands by giving decent offers for their old car...

ILW

Isn't a PCP a sort of rental? If so the mileage is very relevant to resale.

chanz4

ILW wrote: »

Isn't a PCP a sort of rental? If so the mileage is very relevant to resale.

yes it is, op without proof no court will believe

poppasmurf_bewdley

I was once told that there was such a person as Santa Claus, but then I found it wasn't true.

Do you always believe what you are told?

What on earth prompted you to sign a contract stipulating 6k miles a year. I'm retired, my car sits on my drive for days on end without being used, and I do more than 6k a year.

Unless you have a sound recording of the salesman's spiel, or a signed transcript, you haven't a hope in hell of getting out of the contract you signed.