Car Rejection with Negative Equity PX

visidigi

gc7 said:

visidigi said:

gc7 said:

born_again said:

gc7 said:

Advice sought for a matter I'm going through right now. key points noted below:

I purchased a car from Arnold Clark on 19/11/24. This involved trading an older car, with a PX value of at £12,000 and finance settlement of £13,000. A negative equity of £1,000. The new car was also purchased on finance.

Immediately on leaving the forecourt, some minor issues were noted such as tyre pressure warnings coming on and parcel shelf ill-fitting. After a few days we experienced a problem with the seatbelts, the clutch sticking and over-revving and windscreen wipers not shedding water. We contacted the dealership who initially said the clutch could not be faulted, only to later say there was a problem, but it gets resolved if you remove the floor mats. Bizarre, I know!, but this is what they told me. The wipers were replaced. But they faulted not only the front seatbelts where we had observed them not functioning, but also the rear seatbelts. we had in fact been sold a car with no functioning seatbelts.

The garage had the car in for repair from 06/12/24 until 14/01/25 whilst they awaited parts. We were provided a courtesy car for most of this time, however we were not permitted to use this for business purposes, minimizing the help and relief it could provide us.

We immediately observed the clutch had no resistance, indicating some form of work had been carried out on it, despite the dealership suggesting otherwise. Similar problems with sticking, slipping out of gear were still observed. after a few days, an exhaust failure and engine management warning came on. The car was shortly back in for repair. 

We were then advised the clutch had been retested, and they had now faulted it. But given the quality of the car, the new problems experienced, and the general service provided (which i've not documented fully )here, I advised them I wanted to pursue a rejection as they had a been given an opportunity to repair a major fault, and failed to do so - as well as the goods being illegal due to the non-functioning seatbelts in the first place.

A long-ish story short, but the rejection has been accepted by both the dealership and the finance company. However, when i went to hand in the spare key to the car, they demanded a £1000 payment owing to the original negative equity on the deal. 

We were astonished, but understanding to a certain extent. Our original PX car was later resold by the dealer (for £15,000) therefore couldn't be returned to me. My problem is that the PX value we agreed to, in my mind, was part of the 'package deal' for the new vehicle. In isolation, we would never have agreed to this value.

The rejection is not because we had simply changed our mind, it was because the goods were genuinely not fit for purpose, and accepted by the dealer. It does not appear reasonable that I should suffer further and be liable for the original negative equity as, at the end of the day, this matter only existed through the actions of the dealer and the quality of the goods.

I've not therefore had the opportunity to achieve full market value of the older car. Ironically the dealer did, achieving £3000 above the PX value. 

Anyone's thoughts would be appreciated....

Guessing the finance was for car £15.000 + £1000 for the negative equity.

Thus, you do owe them £1000, or more to the point the finance co. As rejecting the car would only refund you the value of the car £15000.

What they sold the car for has nothing to do with the amount you owe, for the loan taken out,

Had you not rejected the car, then you would have paid the £1000 NE back. So the issue of the £1000 has existed all the time. 
Rejecting the car, has changed nothing as far as NE goes.

Thank you for input. Yes, new finance was £16000 as you say (£15k car plus £1k NE)

I understand the NE always, and still exists. Reasonable in circumstances of it being a package deal, and accepting the lower than market value PX price as part of a bigger deal. In isolation, and with hindsight of what was to come, I can't get away from it being reasonable to now say that was fair value in the circumstances. The NE is a result of the PX value, not the market price of the car. i.e. if I knew then what was to come, we would have sold the car privately. I've been denied that opportunity now because of the rejection. But the rejection is not of my doing - the car was genuinely faulty. 

The moment you accepted the deal was the moment you accepted the value offered was acceptable. Just because the deal didn't work out doesn't change the value you accepted.

Its not unusual for package pricing to be done in these sorts of scenarios - there was nothing stopping you selling the car privately, you of course could have done that at any point.

I disagree that the moment I accepted the deal was the moment I accepted the value offered. My acceptance of the deal was based on the value and condition of goods I was purchasing. Through no fault of my own, this wasn't the case. In fact it turned out there wasn't just a serious hidden defect before purchase, it was illegal owning to no functioning seatbelts. Had this been known, there would be no deal, or at least a deal under under these same terms. 

I agree nothing stopping me selling privately before everything, however far too easy to say with hindsight. Too many other factors to account for such as finding finance to settle early before selling, the time and inconvenience. I want to be, and believe I should be, in the same financial position i was in had the sale not happened at all. I don't believe I am - I don't have the asset I can sell, nor the equivalent value. 

No, you are. You were £1,000 in the hole on a car and you refinanced. You can't use selling privately as a lost opportunity if you then say you didn't because it was too inconvenient.

There is no consumer rights issue here.

I'm not sure anything any one says to you other than 'yes you should ask them to waive the £700' will be accepted here...

gc7

Alderbank said:

You are correct that it is illegal under the Road Traffic Act for a trader to sell a car to a consumer which at the point of sale is unroadworthy. He must either fix it or pass it on to another dealer by way of trade.

However to be fair to us, you said:
Immediately on leaving the forecourt, some minor issues were noted... After a few days we experienced a problem with the seatbelts...

Not all seatbelt problems or annoyances are automatic MOT fail

To clear any confusion on the seatbelts, we realised after a few days something wasn't right with them - they weren't automatically stopping when activated. This was the front belts. When the car was in the garage, we were informed that they looked at the rear belts also and faulted all of them. No one had actually been in the rear of the car in the interim period since we collected, therefore we knew the problem must have existed prior to point of purchase. This fact isn't disputed by the dealer.

gc7

eskbanker said:

gc7 said:
I want to be, and believe I should be, in the same financial position i was in had the sale not happened at all. I don't believe I am - I don't have the asset I can sell, nor the equivalent value. 

Surely beforehand you had liabilities of £13K exceeding £12K of assets by £1K, so you are now in the same net financial position, i.e. owing £1K?

Liabilities of £13k yes, but the value of assets is questioned. The £12k mentioned is the dealers PX value. At private sale, this would command more (as was demonstrated at the dealers eventual selling price of £15k). If I had the car returned, I would also have the choice of retaining the vehicle longer until the negative equity diminished.

eskbanker

gc7 said:

eskbanker said:

gc7 said:
I want to be, and believe I should be, in the same financial position i was in had the sale not happened at all. I don't believe I am - I don't have the asset I can sell, nor the equivalent value. 

Surely beforehand you had liabilities of £13K exceeding £12K of assets by £1K, so you are now in the same net financial position, i.e. owing £1K?

Liabilities of £13k yes, but the value of assets is questioned. The £12k mentioned is the dealers PX value. At private sale, this would command more (as was demonstrated at the dealers eventual selling price of £15k). If I had the car returned, I would also have the choice of retaining the vehicle longer until the negative equity diminished.

Possibly true but unlikely to be relevant - are you expecting the dealer to effectively increase their valuation of your car because the new car had to be returned?

HillStreetBlues

gc7 said:

At private sale, this would command more (as was demonstrated at the dealers eventual selling price of £15k). If I had the car returned, I would also have the choice of retaining the vehicle longer until the negative equity diminished.

Not always more, if you sold privately the buyer would have hardly any rights, a dealer selling it take on any problems  and the cost that it involves hence higher price.
You have found that out yourself being able to return your car, if you bough privately you might have been stuck with it. 

photome

gc7 said:

eskbanker said:

gc7 said:
I want to be, and believe I should be, in the same financial position i was in had the sale not happened at all. I don't believe I am - I don't have the asset I can sell, nor the equivalent value. 

Surely beforehand you had liabilities of £13K exceeding £12K of assets by £1K, so you are now in the same net financial position, i.e. owing £1K?

Liabilities of £13k yes, but the value of assets is questioned. The £12k mentioned is the dealers PX value. At private sale, this would command more (as was demonstrated at the dealers eventual selling price of £15k). If I had the car returned, I would also have the choice of retaining the vehicle longer until the negative equity diminished.

That doesn’t demonstrate that you would have achieved 15k selling privately….the dealer paid you 12k they most likely had to do some prep on it at a cost, they then have to gtee it and make a profit.. yiu had the chance to sell privately before accepting the PX . You owe them the money, 

sheramber

What you might have done and what you might got for it are not relevant now.

You did not do it and there is no guarantee you would have received more money for it.

You chose the convenient way and  agreed to the Partxchange price offered. 

It is too late to dispute  the amount now. 

HopeAndDriftWood

Yeah, it's too late to try and change the valuation you accepted for your car now.

You are, legally speaking, in the same position that you were when you bought the car - you are £1k down. You accepted that when you took this deal. That is the confirmed value of the asset that you had. 

You can absolutely have buyers remorse that you accepted that deal, and didn't try to sell privately, but it doesn't change the legal position. Your old car is not worth more because they managed to sell it for more - and you don't know what work or warranties they had to provide to get the extra £3k. 

It does sound like the car that they gave you was a wreck, which is unfortunate, but they are putting you back into the position that you were before you entered the contract. That is £1k in the red. 

gc7

By way of an update. The matter has now been finalised. The finance company has upheld my complaint in full and awarded a full refund. The also confirmed in writing the remaining £1k negative equity is due to them, not direct to the dealership, and is due for payment anytime before the end of the original term of the deal. In my case, this is to be paid in full before the end of 2029. I have agreed to settle in this way.

That being said, despite this decision, the dealership continues to also pursue me direct for immediate full payment of the same negative equity. I cannot possibly owe the same thing to two different bodies. I'm not satisfied at the dealerships handling of the whole matter from the beginning and have lodged complaints with the relevant trade associations and governing bodies.

400ixl

So the finance company is refunding you all of the finance minus the £1k negative equity. So in fact refunding the payments you have made since the deal was struck where you have had access to either the vehicle you purchased or a courtesy car and there are no charges for usage? The £1k has to be paid before the end of 2029.

I'd take that and run as well.

Good luck with the dealership in getting that resolved. But sounds like you have come out of this in a pretty fair, may even be better position.

And good luck with finding your next vehicle.