Voluntary Termination With BMW

K_Fergy

I recently exercised my right to voluntarily terminate my agreement with BMW but am now having difficulties regarding pro rata excess mileage charges.
I wrote to them on the 7th of December 2015 giving notice to terminate my agreement, they responded to me the next day to confirm my request for termination had been received and processed.

In the response it said The voluntary termination figure is £721.38 which expires on 25 December 2015. You will be contacted within the next 72 hours by our collection agents to arrange and book collection of your vehicle but nothing else regarding mileage.

In the section of my agreement (Termination: your rights) it clearly says they will be entitled to the return of the goods and half the total amount payable which in this case was £11,984.70 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.

At the time of the termination I was at month 32 of 47 so the payments I had already made plus the £721.38 quoted took me up to the figure in my termination.

My agreed total mileage allowance was 54000 and I was over by 9000 but the car was returned in good condition that was within the agreed limits of the fare wear and tear policy and was fully serviced in line with BMW service guidelines of which the last service was done at 54K by the main dealer.

They have since sent invoice letter’s claiming pro rata excess mileage and also late payment invoices, I have also had heated discussions over the phone about the same subject. How can I respond in writing to stop this as I feel I have nothing further to pay?

Any suggestions would be appreciated.

verityboo

Since writing to them initially to say you wanted to VT the car have you signed any other documentation (they might have sent what they call a VT pack?), if so it would be worth checking what it said

The normal advise is to not sign anything after writing the initial letter in case you then agree to pay for the excess mileage.

If not you are right that it is not relevant as said here for instance which states

"There is no specific provision for excess mileage charges in the law, so in theory you can’t be charged for exceeding your mileage allowance. However, if you have exceeded the pro-rata mileage allowance, you can expect the finance company to come after you for an excess mileage charge. You do not have to pay this, but you will need to be prepared to fight them – potentially for months and against threats of legal action."

http://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

AdrianC

You cancelled the policy at month 32 of 47 (68% of the time).
When you say your "agreed total mileage allowance" was 54k, do you mean that was over the entirety of the 47 month agreement - or is that pro-rata'd for the time, so 80k over the full duration? 13,500/yr or 20,000/yr?

If it was 80k for 47 months, then at 63k over 32 months, you're 16% (9,000 miles) over the pro-rata mileage allowance.
If it was 54k for 47 months, then at 63k over 32 months, you're 70% (26,300 miles) over the pro-rata mileage allowance.

Either is going to take you into excess mileage charges, which WILL be in the Ts & Cs of the lease, but the latter situation is going to be expensive.

Whether the service history was up to date and the condition was satisfactory makes no difference - you're not being asked to pay penalties over those, just the excess mileage.

K_Fergy

After I sent my initial letter I got the response letter back quoting my termination figure but I have had nothing else with a VT pack asking me to sign anything. The agreed mileage was 54K over the 47 months so I am over by 9000 at month 32 yes.

AdrianC

K_Fergy wrote: »

The agreed mileage was 54K over the 47 months so I am over by 9000 at month 32 yes.

So 70% over the pro-rata'd 36,700 miles...

verityboo

AdrianC wrote: »

So 70% over the pro-rata'd 36,700 miles...

Correct but not relevant if they VT as their right under the CCA 1974

The problem for the finance company is that PCP's have been developed since peoples rights were laid down in CCA 1974 which gives the absolute right to hand back the car once 50% of the total is paid

K_Fergy

When I purchased the car it was an approved used car that had just less that 22000 on the clock which was included in the overall total of 54K. My mileage allowance was only 8000 per year which wasn't pointed out to me when I initially bought the car, they asked how many miles a year I was likely to do to which I answered on average 15K a year

verityboo

If you have paid the outstanding amount (£721?) which now means you have paid 50% of the total then perhaps write back stating that you have vt'ed the car as is your right under the Consumer Credit Act 1974 and as you have paid 50% this is an absolute right. There is no provision within that act to allow them to make any addition charge as you have taken 'reasonable care' of it by ensuring it have been serviced in accordance with the manufacturers guidelines

Tell them to confirm within 14 days they will stop threatening you and if they don't start an official complaint

bigjl

K_Fergy wrote: »

When I purchased the car it was an approved used car that had just less that 22000 on the clock which was included in the overall total of 54K. My mileage allowance was only 8000 per year which wasn't pointed out to me when I initially bought the car, they asked how many miles a year I was likely to do to which I answered on average 15K a year

So this was a PCP? Why did you allow them to put an unrealistic mileage on the contract? Or did you do that to make the monthly payments less?

Not an issue if you intended to keep the car but how is an issue?

Never been given a mileage restriction on a car on HP.

K_Fergy

I didn't allow them to put an unrealistic mileage allowance on me, I wasn't aware of it until it was pointed out to me. I know that was a mistake on my part to not realise until it was too late.

blackste

BMW are trying to charge you for pro rata mileage. What they are actually trying to do is apply an end of contract agreement, to a contract termination. They are not entitled to do this, however, it is common practice to try.

Once you have payed the figure up to the 50% value, as long as the car meets the "reasonable wear and tear" standard, you have nothing else to pay. However, most people get billed for something, and mileage is the hardest to argue, and there is some recent caselaw to back up the credit companies. Working in your favour is that you agreed to a fairly high mileage allowance in the first place, even though you went quite a bit over it. The case i saw that had lost had agreed 6kpa, and did something like 36k in 2 years.

Overall, it is down to how hard you want to fight. If you are determined to pay nothing, check out the legalbealges forum for some dedicated VT advice. Maybe concider negotiating with BMW over it though?