Faulty car return agreed but finance company offer is really bad

artschool2

Purchase a car last august with finance. within 2 weeks a faulty airbag warning appeared. garage notified and after 6 attempts to fix it the finance company agreed to take back the car. 

the only problem is that they have deduced a massive amount of money equivalent to over £300 a month so it would have been cheaper to lease. 

does anyone have any ideas? I challenged them about the offer but they said that I am welcome to sell the car privately to get more money. 

neilmcl

So to clarify, you've had the car 10 months or so and you're expecting them to give a full refund of all your payments?

artschool2

neilmcl said:

So to clarify, you've had the car 10 months or so and you're expecting them to give a full refund of all your payments?

no definitely not. I am happy to pay the correct consideration because I have used it.

the car is worth £18K and they are offering to return £15.5K. I paid £20.5k. 

JJ_Egan

Worth as in who is buyer ??

artschool2

JJ_Egan said:

Worth as in who is buyer ??

not sure what you mean? the finance company are taking the car back from me and probably returning it to the dealership it came from. the private finance company is suggesting that I just sell it privately with the fault and then pay off their loan with the money from the private sale. 

MattMattMattUK

artschool2 said:

JJ_Egan said:

Worth as in who is buyer ??

not sure what you mean? the finance company are taking the car back from me and probably returning it to the dealership it came from. the private finance company is suggesting that I just sell it privately with the fault and then pay off their loan with the money from the private sale. 

How are you arriving at the £18k valuation, and how are they arriving at the £15.5k valuation? 

pbartlett

Although of course it varies a LOT, a car depreciates by about 50% over 3 years.

On a 20k car that is about 10k over 3 years ie £3300 a year or not far off £300 a month.

Sandtree

pbartlett said:

Although of course it varies a LOT, a car depreciates by about 50% over 3 years.

On a 20k car that is about 10k over 3 years ie £3300 a year or not far off £300 a month.

Depreciation also isnt a straight line but front loaded which would also rationalise a higher initial rate than the average.

Any particular reason why you are going via the finance company rather than the dealers?

artschool2

Sandtree said:

pbartlett said:

Although of course it varies a LOT, a car depreciates by about 50% over 3 years.

On a 20k car that is about 10k over 3 years ie £3300 a year or not far off £300 a month.

Depreciation also isnt a straight line but front loaded which would also rationalise a higher initial rate than the average.

Any particular reason why you are going via the finance company rather than the dealers?

its not a new car bought used from main dealer. the car has to be returned to the finance company because under section 75 of the consumer credit act 1974 and with hire purchase, it is the finance provider, rather than the dealer, who is legally responsible if there are problems with the car.

Sandtree

S75 makes them jointly liable so you can directly exercise your rights under the Consumer Rights Act 2015 against the dealer or mirror those same rights against the lender. It doesn't force you to go to the finance company for resolution, just adds it as an option.

neilmcl

artschool2 said:

neilmcl said:

So to clarify, you've had the car 10 months or so and you're expecting them to give a full refund of all your payments?

no definitely not. I am happy to pay the correct consideration because I have used it.

the car is worth £18K and they are offering to return £15.5K. I paid £20.5k. 

Where are you getting this valuation from?

If you think you really can get £18K for it then the obvious thing to do is sell it yourself, as you've been recommended to do by the finance company. All you're going to reasonable get from them is your initial purchase price less 10 months of depreciation, which will be a lot less than £18K.