CC deposit refund. Does it remove protection

speed1972

Hiya Folks

We've just put a £1000 deposit on a used car from a main dealer. we were going to put another £6k down making the total deposit £7k. They had offered us £7k for our car but we decided to keep it.

Well the damn thing broke down on the way home needing a £3.5k repair bill. So spurious part fitted to get going so runs now but its NOT fixed.

We've told the dealer we are now P/X car in. But finance etc is all set up with a £7k deposit. If we P/X the car then we are effectively putting an £8k deposit down. They have said they would refund the £1000 already paid on CC.

Anyone know if that then removes our CC protection.

tomtontom

Have you told the dealer your current car is now faulty?

If your CC deposit is refunded then you will no longer have protection.

chattychappy

Interesting question. I would say probably not - but it depends on how the arrangements were made.

Option 1
It could be argued that the original contract was terminated by mutual consent. You now have a "new deal" with the supplier and this no longer involves paying anything by credit card. So no cover.

Option 2
Let's say you formed a contract and this was varied by mutual consent. It's worth looking at the text of S75:

(1) If the debtor I]ie you[/I [...] has, in relation to a transaction financed by the agreement I]the credit card agreement[/I, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

You could make a case that the transaction was, in the first place, financed by the credit card. By mutual agreement, the deal was varied and true, the transaction is no longer "financed" by the credit card. But arguably that is irrelevant - there was financing initially. Afterall, if I buy a sofa on a credit card and pay it off the next day, the transaction is no longer "financed" by the credit card. It doesn't stop me making a S75 claim some months later. Of course a supplier refund isn't quite the same as a cardholder paying back the CC, though S75 doesn't make any distinction.

In summary, your only hope would be to argue an "option 2" and even then the situation is a bit precarious. Much better if you can at least retain the financing element. Can you separate out the part exchange part? Ie the dealer pays you directly for your old car?

jonesMUFCforever

chattychappy wrote: »

Interesting question. I would say probably not - but it depends on how the arrangements were made.

Option 1
It could be argued that the original contract was terminated by mutual consent. You now have a "new deal" with the supplier and this no longer involves paying anything by credit card. So no cover.

Option 2
Let's say you formed a contract and this was varied by mutual consent. It's worth looking at the text of S75:

(1) If the debtor I]ie you[/I [...] has, in relation to a transaction financed by the agreement I]the credit card agreement[/I, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

You could make a case that the transaction was, in the first place, financed by the credit card. By mutual agreement, the deal was varied and true, the transaction is no longer "financed" by the credit card. But arguably that is irrelevant - there was financing initially. Afterall, if I buy a sofa on a credit card and pay it off the next day, the transaction is no longer "financed" by the credit card. It doesn't stop me making a S75 claim some months later. Of course a supplier refund isn't quite the same as a cardholder paying back the CC, though S75 doesn't make any distinction.

In summary, your only hope would be to argue an "option 2" and even then the situation is a bit precarious. Much better if you can at least retain the financing element. Can you separate out the part exchange part? Ie the dealer pays you directly for your old car?

Much easier than all that legal guff - pay £1 on the credit card - you are then 100% covered.

chattychappy

jonesMUFCforever wrote: »

Much easier than all that legal guff

Cheeky monkey!

chanz4

But your happy to scam the dealer with a duff car

speed1972

chanz4 wrote: »

But your happy to scam the dealer with a duff car

Scam!! You've made a pretty big assumption there.

A: The dealer will be passing this vehicle off to another trader without a second thought

B: It's their risk to accept the vehicle

C: They have agreed a price to P/X without seeing the car

They haven't asked what condition the car is in.

E: They haven't asked whether the car is even running

F: They only asked that it has MOT, 2 keys and the handbook.

Scamming the dealer.....


But thank you to the more helpful posters. I may just get them to refund £999 or add some car mats onto the invoice.

redpete

Someone will buy that car from a dealer without knowing that they are buying a £3500 bill to fix a hidden problem. At best they will have a battle with the dealer to get any of that back, at worst they won't have any redress against the dealer.

glentoran99

redpete wrote: »

Someone will buy that car from a dealer without knowing that they are buying a £3500 bill to fix a hidden problem. At best they will have a battle with the dealer to get any of that back, at worst they won't have any redress against the dealer.

Why wouldn't they? I traded my car in with a leaky roof, told the dealer about it, he didn't care, the car was sold at auction

speed1972

redpete wrote: »

Someone will buy that car from a dealer without knowing that they are buying a £3500 bill to fix a hidden problem. At best they will have a battle with the dealer to get any of that back, at worst they won't have any redress against the dealer.

The problem isn't hidden. If they press the aircon button then the fault will be obvious. Aircompressor has been replaced. New belts fitted but poss has a leak somewhere. So no cold air.