PCP, VT and initial agreement

motorguy

doctarus wrote: »

Hi, I've been in touch and they are saying that as I signed the original PCP agreement for 6K miles then I have to pay fro the excess mileage.

You were hardly expecting them to say otherwise though?

doctarus

Haha - no I wasn't but I clearly stated that this was to be dealt with as wear and tear.


I guess i'm trying to hold out for a glimmer of hope before I pay.

System

There is at least one FOS Ombudsman ruling that can be found with a quick search that supported the finance company's claim.

The main issue I am fighting with them is that of excess mileage. The handed back mileage was 21000 and the pro-rata figure at return should have been closer to 15K as I signed for 3 years at 6,000 miles per annum

You exceeded the mileage for the entire finance period so quite why you think you shouldn't have to pay I do not know. It MIGHT be a different story had you not exceeded the total for three years as you could've argued that once you hit it you'd park the car up but you've already exceeded the three year mileage limit so I think your chances of winning in court are basically nil. You could of course take it to court but be beware that they can also apply for their costs if they win.

AdrianC

doctarus wrote: »

...but I clearly stated that this was to be dealt with as wear and tear.

You can "state" what you like... They don't have to agree with it.


It's very simple. VT is a legal requirement. They have to let you do it. You are liable for 50% minimum of the amount borrowed. You are not liable for "fair wear and tear", but you are liable for anything above that. Fair wear and tear, as far as damage goes, is defined in an industry standard document. It does not mention mileage.

So the question could easily be viewed as whether 21k miles is "fair wear and tear" on a contract that allowed 15k. The law is silent on that specific example, and there has been no legal decision which is binding either way. Small claims decisions have gone either way, but do not form a binding legal precedent.

If we step back from the legalistic view, do you think it FAIR to do 21k on a contract that allows 15k, and pay nothing towards that 40% use above and beyond what you've paid for?

doctarus

The reason being is that I have seen it published on may different advice sites that mileage has not legal recourse and can be attributed to general wear and tear.

I can't post links as I am a newbie but the carexpert.co.uk have something on VT PCP so here is the text:

"
There’s no provision for excess mileage charges in the law, so in theory, you can’t be charged for exceeding your mileage allowance. However, if you exceed the pro-rata mileage allowance, you can expect the finance company to come after you for an excess mileage penalty.
You do not have to pay this charge, but you will need to be prepared to fight it – potentially for months and against threats of legal action. Despite repeated assertions from the legal community that excess mileage is not enforceable, the finance companies keep trying to charge customers for it.
Their hope is that by bullying you, you will pay up. In plenty of cases, this works. Customers are often terrified to receive serious-looking letters or threats from legal firms acting on behalf of the finance company, but it’s all a bluff.
One of the ways people exploit the voluntary termination clause is with very high mileage. For example, if you cover 30,000 miles per year, your car will be worth much less after three years than if you only cover 5,000 miles per year. So they sign a PCP agreement for a very low annual mileage (to keep their payments down), then drive much further than the agreed mileage and VT the car with an enormous excess mileage.
Understandably, the finance companies do not like this exploitation of a legal loophole.
If you’ve done 100,000 miles but your car is in good condition, it’s difficult for a finance company to argue that you have not taken “reasonable care” of your car. However, they’ll certainly try and they may well be very aggressive about it.
The finance company will not take you to court over excess mileage on a PCP agreement, regardless of any threats they might make. It’s an empty threat, so be polite but stick to your guns."

AdrianC

doctarus wrote: »

...Despite repeated assertions from the legal community that excess mileage is not enforceable...

Unfortunately for the theory, "the legal community" is not of one mind. And those who think otherwise include those judging various small claim cases.

...
The finance company will not take you to court over excess mileage on a PCP agreement, regardless of any threats they might make.

(probably)

Here's a 2017 case where it DID go to court, and the finance house DID win.
https://legalbeagles.info/forums/forum/legal-forums/motoring-parking/vehicle-finance-and-issues/99722-bmw-financial-services-voluntary-termination-excess-mileage?p=1142655#post1142655

molerat

The only legal viewpoint that counts is that of a higher court. So far none of these cases have got that far as neither side is willing to take that chance. If the LegalBeagles community were that confident I am sure they would have launched a crowd funding exercise to test the water on one of the cases. The finance companies can take it to a lower court as it is a relatively low cost exercise and a few wins can scare off others from chancing it, they can afford to write off the cost of a few losses. No point taking it to the ombudsman as I don't think there has been a single case in favour of the customer.

doctarus

so hold out...?

molerat

You have little to lose until they serve court papers. Can you put up with constant letters, phone calls and knocks on the door ?

doctarus

Knocks on the door?!