Conditional Sale Agreement & PCP

Eddy2010

Hi All,

My wife took out a Conditional Sale Agreement (CSA) for a vehicle with Santander. All her documentation refers to a CSA. All correspondence received from Santander throughout the term referred to a CSA. There was never any reference to a PCP. The car was returned and she is now being chased for mileage charges regarding a PCP that she knows nothing about.

Santander have sent her an electronically signed CSA and PCP.

Are you able to have both agreements that relate to the same car?

We feel this is Santander trying it on.

To make it even more annoying, she has requested a detailed breakdown of how the sale proceeds were broken down when Santander sold the vehicle on as they claim it sold for about £2.5k less than the market rate and she they have refused to provide.

Does anyone have any experience in dealing with such issues?

Kind regards,

Eddy

DrEskimo

Presumably if the car was returned, there was a large final payment which you chose not to pay? If so, did you just have a CSA with the same payment structure as a PCP finance deal (i.e an upfront payment, monthly payments over an agreed period, and a final large payment)?

What was the mileage limit agreed when your agreed to the CSA?

Eddy2010

Hi Dr Eskimo,

Yes the choice was a balloon payment or return the vehicle. We chose to return knowing the car was worth more than the balloon payment by quite a distance.

As it was a CSA, there is no mileage allowance. We have double checked this on Santander's own website and they even say one of the key differences between a CSA and PCP is the fact there is no mileage limit.

Thanks,

Eddy

DrEskimo

"It is your responsibility to repay the balloon payment which means you take responsibility for any difference between the balloon payment and the value of the car

The balloon payment is not optional and also attracts interest throughout the agreement"

https://www.santanderconsumer.co.uk/finance-that-fits/car-finance/personal-customers/conditional-sale-with-a-balloon/

I think you need to clarify if it was a CSA or a PCP. If it's a CSA, it seems you don't have the option to hand it back and not pay the balloon.

If it's a PCP then you will have mileage charges.

Eddy2010

Thanks Dr Eskimo,

We are aware of the requirement to pay the balloon payment if the sale proceeds do not cover it. We are 100% confident they have. Santander are not chasing us for this as it is settled. They are chasing us for mileage costs. We have tried to clarify with Santander as we do not believe you can have both types of agreement on a vehicle at the same time. And there was no reference to the PCCP element at any point during the agreement until the vehicle was handed back.

My question is, is it possible to have signed up to both a CSA and a PCP at the same time? All the documentation says CSA, which is settled and agreed that it is settled by Santander. They are now pressuring for mileage costs that we feel are not due as there was no PCP. When we are questions about how you can both a CSA and PCP and if they can provide a breakdown of the sale proceeds, they just tell us to pay.

I was hoping someone may have been through this before and their approach to dealing with Santander.

Thanks,

Eddy

DrEskimo

Eddy2010 wrote: »

They are chasing us for mileage costs. We have tried to clarify with Santander as we do not believe you can have both types of agreement on a vehicle at the same time....

My question is, is it possible to have signed up to both a CSA and a PCP at the same time?

No, I agree with you, I don't think you can have both agreements at the same time on a single car. I would continue to argue this with them.

Apologies as this isn't helpful now, but in hindsight, if you were so sure the car was worth way more than the finance owed, would it not have just been easier to sell it to any dealer/WeBuyAnyCar outfit so they could settle the finance and pay you the equity?

Cornucopia

Eddy2010 wrote: »

To make it even more annoying, she has requested a detailed breakdown of how the sale proceeds were broken down when Santander sold the vehicle on as they claim it sold for about £2.5k less than the market rate and she they have refused to provide.

How was this discrepancy resolved?

Typically, Finance Companies will send returned vehicles to auction, and it's possible that they may fetch less than estimated value.

Eddy2010

Hi Cornucopia,

We are yet to receive a detailed breakdown of the sale proceeds. They just sent a letter on letter headed paper saying it was sold for c.2.5k when we know similar vehicles were being advertised privately for c.£5k. We have asked twice now. So we are happy to dig in until we receive this.

Cornucopia

Eddy2010 wrote: »

Hi Cornucopia,

We are yet to receive a detailed breakdown of the sale proceeds. They just sent a letter on letter headed paper saying it was sold for c.2.5k when we know similar vehicles were being advertised privately for c.£5k. We have asked twice now. So we are happy to dig in until we receive this.

If the agreement states, or if they simply agreed that you could return the vehicle and they would dispose of it, I doubt that you have a claim for loss of value in a genuine sale. They will almost certainly have auctioned the vehicle and there is no way it will have fetched anything close to its private sale price.

How did they come to dispose of the vehicle if the agreement does not have this option? Could they have transferred the agreement to a PCP?

Do they still say you owe £2.5k, or has this been resolved? Are they after both the £2.5k and mileage penalties?

bazzyb

Has the car been handed back by way of voluntary termination?

With conditional sale, the intention is that you will always own the vehicle at the end of term, unlike with a hire purchase where you have an option to own the vehicle at the end. PCP is essentially a form of hire purchase. What you are describing sounds like conditional sale with a balloon (deferred payment) which must be paid, hence why there is no specified annual mileage. There would be no option to simply hand the car back in lieu of paying the balloon.

It sounds like you have VT’d the agreement (even if yo weren’t aware you were doing so!) and that is why you are being pursued for ‘excess’ mileage.

Nearlyold

Perhaps some confusion in this thread

A PCP can be based on HP, Conditional Sale, or Fixed Sum/Term Loan (basically a Personal Loan).

All have the same options at the end. HP & Conditional Sale have VT rights in addition. There is no legal requirement for a PCP to be based on HP, it's just that most are.

As far as I recall all Santander PCP's are Conditional Sale based, so there is nothing unusual or untoward in having one, it doesn't mean you have "two types" of agreement, its just a Conditional Sale based PCP rather than an HP or Fixed Sum/Term based one.

Santander offer -

Straightforward Conditional Sale

Conditional Sale with a Balloon (payment of the Balloon is NOT optional)

Conditional Sale PCP with an optional balloon with potential condition mileage/condition charges.

All the above products would state at the top of the first page of the agreement "This is a Conditional Sale agreement" as regulated by the Consumer Credit etc or words to that effect. It won't say PCP because that is not a Regulatory defined type of finance product.

NO finance company is going to offer an Optional Balloon Product without potential mileage/condition charges, it would leave them totally exposed to being handed back a worthless nail.

OP - you need to check your agreement Terms & Conditions (don't look for the words Personal Contract Purchase (PCP)) but rather check for any terms and conditions that make it either a PCP or Conditional Sale with a non optional balloon. If it was a PCP there would be potential charges for mileage and or condition on hand back (the price Santander might realise on selling it on is irrelevant on a PCP). If it was Conditional Sale with a non optional balloon, and for whatever reason Santander agreed that you could return the car you need to clarify on what basis the car was returned eg Voluntary Termination or Voluntary Surrender or some other ad-hoc arrangement with Santander