Car finance agreement

Bigdude1

I Have looked into my car finance agreement as I'm due to hand back my PCP car. I will voluntary terminate at the half way point. The reason i checked my agreement is because i wanted to check how much i would have to pay per excess mile over  what was agreed at the beginning. BUT there is no mention of any excess mileage charge in the contract. I have spoken to the finance company who said "I can see that it isn't in your contract and i don't know why that is sir but you will have to pay 8p per mile for anything over the agreed mileage" I questioned him as to why i would have to do something that i haven't legally signed to do and he couldn't answer me. So, my question is will i have to pay anything? I' m thinking surely not? 

DullGreyGuy

Is the mileage cap written into the contract? 

Remember that early termination on PCP is repayment of half of the total value of the finance which include the balloon (and interest). 

If you've exceeded the cap then its a breach, if the contract doesn't stipulate the cost of a breach it, subject to other terms, would come down to the damages caused by the breach which may be more or less than 8p/mile. Having a known figure is generally better as it creates certainty for everyone. 

Bigdude1

Yes the balloon payment has been taken into consideration. There is no mention of excess mileage or a mileage cap in the agreement. It seemed to me by the tone of the guy on the other end of the phone that maybe a mistake had been made? On the final summary of the finance agreement where it outlines the repayment schedule there is a section that's says " Some products may be subject to an excess mileage charge" but the box next to this comment is blank and as mentioned before its not written anywhere else. it is confusing and i want to know what i will owe for excess mileage but if i haven't signed for any then im struggling to understand how i can be legally made to pay anything? 

Arunmor

So how much is your mileage going to be over?  I don't think 8p/mile is that bad, choose your battles carefully.

born_again

Bigdude1 said:

I Have looked into my car finance agreement as I'm due to hand back my PCP car. I will voluntary terminate at the half way point. The reason i checked my agreement is because i wanted to check how much i would have to pay per excess mile over  what was agreed at the beginning. BUT there is no mention of any excess mileage charge in the contract. I have spoken to the finance company who said "I can see that it isn't in your contract and i don't know why that is sir but you will have to pay 8p per mile for anything over the agreed mileage" I questioned him as to why i would have to do something that i haven't legally signed to do and he couldn't answer me. So, my question is will i have to pay anything? I' m thinking surely not? 

Have a search in motoring section, this has come up before & I think there is a argument over paying.

A_Geordie

@born_again is right. 

Section 100 of the CCA 1974 says that when you voluntary terminate under section 99 of the Act, liability is capped at one half of the total price. The keyword is "total price" as this is defined in section 189 as: 

the total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement

As above liability for compensation or damages relating to breach of contract is excluded for the purposes of the one-half liability. Of course creditors will still insist on the mileage being paid regardless because you are talk to low level customer service reps, and the OP should be prepared for their credit file to be splattered with late payment markers and potentially a default also.

Only successful way to resolve that is through legal proceedings claiming breach of data protection and get a bit of compensation out of it (unless you fancy bringing an expensive defamation claim in the High Court). If your PCP agreement is with BMW then expect a much harder fight as they are ruthless, so bear that in mind before you decide whether to pay or not.