Voluntary terminating a car on PCP

Scampbell14

Hello, my situation is a little bit complicated.

My car (Renault Twingo) is on a 4 year PCP with Arnold Clark due to end August 2019.
I have two seperate issues and any advice is appreciated on whether I have cause to go to the Motor Ombudsman about this.

My first question is, I am over my agreed mileage allowance on the car by around 8,000 miles at 8p per mile. My agreement was for 5,000 per year at 4 years. I have read that if you do a voluntary termination you don't legally need to pay excess mileage costs. Is there any truth in this? If so, the form Renault have given me to sign states that I am willing to pay such costs. How can I complete the VT without agreeing to this?

Due to several reasons, I visited Arnold Clark multiple times to find out if I could hand the car back, or trade it in for something else and they stated each time no I had no options other than to wait till the end of my agreement. The car was carrying negative equity and they told me I would need to pay the rest of my agreement if I handed the car back early. I called Renault Finance last week and they told me I hit the halfway mark 6 months ago and could have handed it back then without any fees or extra payments and walked away.
This left me very upset as I have since racked up excess mileage on the car, and its recently failed its MOT repairs will cost around £400. I have no way of knowing whether this would have still been the case in January had I handed it back then.
Does this sound like a complaint could be made against Arnold Clark? Or is it ok for them to conceal your options or not look into it properly for you?

Secondly, I have reason to believe I may have been mis-sold the car initially 4 years ago. The dealership who sold me my car called me last week to ask what I planned to do as I was coming to the end of my agreement. I stated I was upset about how quickly the car had depreciated, and that I had faults in the past, and felt I had been to some extent ripped off. I told him I intended to hand the car back in August and walk away. My memory is fuzzy on this but to my surprise he stated something along the lines of "Yes I think what happened was that Renault set the price of the car so that customers payments would be cheaper, as they knew it would depreciate rapidly and wouldnt be worth anything at the end of it". Now to me, that seemed like insider information that I perhaps shouldnt have been told. If I had known this at the beginning I would have opted for a car that was going to hold its value better even it meant higher payments. My previous car Ford Ka Edge had trade in value at the end of its PCP.
I understand all cars depreciate the moment you drive out of the garage but some cars are better than others im assuming?
Do I have a case against arnold clark for miss-selling? Or is that simply insider information that they legally dont need to reveal at time of purchasing?

I'm sorry this is so long winded I am hopeless with this. I appreciate anyone who has time to read through this.

Thanks.

da_rule

Do you have to pay the excess mileage on voluntary termination - check the exact wording of your contract but yes you will, otherwise this would be a sweet little work around for people to exceed their mileage and hand the car back a week early.

Arnold Clark not telling you about your options - they told you about the options you had with them (i.e. none). The option to surrender is an option you have with the finance company. Arnold Clark are not there to represent you, they are there to sell cars.

Miss-selling - no case as far as I can see. You were supplied a car that you chose at a monthly cost you agreed to. It is up to you to research how a car holds its value if you feel that such a factor is relevant to you in making your decision. Again, car companies structure their prices to ensure they can sell as many cars as possible, not to ensure that the buyer has an ‘asset’ they can make money on in the future.

DoaM

It's a grey area ... if you invoke your (legally allowed) VT option then you are effectively nullifying the contract - making it as if it hadn't existed. As such any contract terms such as mileage charges can't apply. However it's often not quite as simple as that ... there have been court cases (small claims, so no precedence set) which have found for the motorist and found for the lease company.

Check out the Motoring board - this question has been asked several times.

Boomslang

A 4 year PCP!!

Smellyonion

I don't see where on earth you can claim that something was mis-sold 4 years ago having fulfilled your payments and your contractual obligations. The fact the vehicle is worth less that you expected is irrelevant. Infact, that is one of the few benefits of PCP, when you hand it back, they will take the hit.


With regards to excess mileage charge for VT, the law seems vague on this one. Some people have VT and not paid anything, others were forced to pay the excess mileage otherwise every single person would get a 4k per annum PCP, take it to the moon and back and voluntarily terminate - heck I would, I do a lot of miles!

bris

DoaM wrote: »

It's a grey area ... if you invoke your (legally allowed) VT option then you are effectively nullifying the contract - making it as if it hadn't existed. As such any contract terms such as mileage charges can't apply. However it's often not quite as simple as that ... there have been court cases (small claims, so no precedence set) which have found for the motorist and found for the lease company.

Check out the Motoring board - this question has been asked several times.

Not true, invoking the VT does not mean the contract never existed, it just uses your legal right to the VT.


There have been a few cases that went all the way. The law on it states you need to take reasonable care of the car for the VT to be handed back with no fees.


The ombudsman has ruled against people who have tried to use this loophole to get out of high mileage fees. The ombudsman does not find it unfair for finance companies to charge the excess for early termination.

https://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=122114

DoaM

I didn't say VT makes the contract not exist, I said the effect of VT possibly makes contract terms regarding mileage null and void - i.e. as if the contract hadn't existed.

The law on VT is silent as regards mileage affecting the condition of the vehicle, so it is open to interpretation. Cases have gone both ways (as I said earlier) - some for the motorist and some for the finance company. Neither has set a precedence hence it is a grey area; none of us here can say with absolute certainty what the outcome would be for the OP.

neilmcl

Boomslang wrote: »

A 4 year PCP!!

What's wrong with that, most PCPs are either 3 or 4 years duration.

neilmcl

bris wrote: »

Not true, invoking the VT does not mean the contract never existed, it just uses your legal right to the VT.


There have been a few cases that went all the way. The law on it states you need to take reasonable care of the car for the VT to be handed back with no fees.


The ombudsman has ruled against people who have tried to use this loophole to get out of high mileage fees. The ombudsman does not find it unfair for finance companies to charge the excess for early termination.

https://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=122114

The ombudsman can only give an opinion it's doesn't rule on the law, only the courts can do this and I've seen at least 2 examples where it's gone both ways.

Scampbell14

Hi my agreement states "If you have already paid more than £6132 plus any overdue payments and taken reasonable care of the goods then you will not have to pay any more."

But also states "You must not exceed the mileage allowance. You will be required to pay the excess mileage charge for every mile driven in excess. This will be charged on expiry, or the earlier ending of this agreement or where you request us to act as your agent to sell the goods"

Scampbell14

Should I sign the VT form agreeing to pay this or is there another way to hand the car back without agreeing to pay the excess mileage?

I take it if I refused to pay it the worst the ombudsman can do is say no you need to pay it?