Dealer goes bust while car has £13k repair bill to pay
Discussion
I’ll try to keep this simple
Car is purchased for around £45k from ‘sports and prestige’ dealership which has been trading with apparently no problems for 15 years or more.
The car was purchased with around 50% finance, primarily to retain some leverage on the dealer if faults occour (due to previous experience).
7 months into ownership, but only around 1500 miles, the car is taken to a specialist for diagnosis of a an engine issue.
The specialist diagnoses that the engine is now junk and full of metal chunks/filings that have now gone all round the engine and ruined everything such as the Turbos etc, also the issues have caused the pistons to destroy the block.
The rebuild bill is quoted at £13k.
The warranty company won’t touch the repair because the fault was clearly present at the point of sale, but just wasn’t showing itself as obviously as it was 1500 miles later.
The cause of the fault was a poor previous engine rebuild.
The dealer says ‘sorry, the warranty from us was only 6 months’, but the finance company tell him the car should be fit for purpose for 12 months and tell him to sort it.
He agrees to the repairs and tells the specialist directly to go ahead and do all the work required.
The car is away for 3 months and during that time, the dealership has gone bust and disappeared.
Anyone had this before?
Car is purchased for around £45k from ‘sports and prestige’ dealership which has been trading with apparently no problems for 15 years or more.
The car was purchased with around 50% finance, primarily to retain some leverage on the dealer if faults occour (due to previous experience).
7 months into ownership, but only around 1500 miles, the car is taken to a specialist for diagnosis of a an engine issue.
The specialist diagnoses that the engine is now junk and full of metal chunks/filings that have now gone all round the engine and ruined everything such as the Turbos etc, also the issues have caused the pistons to destroy the block.
The rebuild bill is quoted at £13k.
The warranty company won’t touch the repair because the fault was clearly present at the point of sale, but just wasn’t showing itself as obviously as it was 1500 miles later.
The cause of the fault was a poor previous engine rebuild.
The dealer says ‘sorry, the warranty from us was only 6 months’, but the finance company tell him the car should be fit for purpose for 12 months and tell him to sort it.
He agrees to the repairs and tells the specialist directly to go ahead and do all the work required.
The car is away for 3 months and during that time, the dealership has gone bust and disappeared.
Anyone had this before?
Inconvenient to say the least. But the finance company is liable, and seem to have already agreed that the car is not of merchantable quality.
Your beef is with the finance company.They will have a supplier agreement with the dealer where the dealer agrees to indemnify them in these situations, hence their instruction to the dealer to sort it, but if the dealer has ceased trading then the finance company will still have to fulfil its obligations to you.
Your beef is with the finance company.They will have a supplier agreement with the dealer where the dealer agrees to indemnify them in these situations, hence their instruction to the dealer to sort it, but if the dealer has ceased trading then the finance company will still have to fulfil its obligations to you.
Section 75 of the consumer credit act 1974.
If you lose the car, the credit company are jointly and severably liable. I have a funny feeling that they're liable for the whole £45K if you lose the car, but I'm not certain and I'm sure someone knowledgable will chip in (along with the usual band of ignoramuses).
Not sure how the credit companies liability under sec 75 extends to the repair as you describe it. Given the amounts involved I suspect pushback from the credit company, so I think a free consultation from a solicitor would be in order.
If you lose the car, the credit company are jointly and severably liable. I have a funny feeling that they're liable for the whole £45K if you lose the car, but I'm not certain and I'm sure someone knowledgable will chip in (along with the usual band of ignoramuses).
Not sure how the credit companies liability under sec 75 extends to the repair as you describe it. Given the amounts involved I suspect pushback from the credit company, so I think a free consultation from a solicitor would be in order.
I would suggest that since the dealer has agreed the work with the repair company then it is the dealer that owes the repair company the 13k.
Is the car fixed yet? does the repair company know the dealer has gone bust?
Are you able to get the car from the repair company?
They can't hold the car in lieu of payment, I'm sure they need to take you to court. In which case it wasn't your contract to pay for repairs surely?
Is the car fixed yet? does the repair company know the dealer has gone bust?
Are you able to get the car from the repair company?
They can't hold the car in lieu of payment, I'm sure they need to take you to court. In which case it wasn't your contract to pay for repairs surely?
Lord Marylebone said:
I’ll try to keep this simple
Car is purchased for around £45k from ‘sports and prestige’ dealership which has been trading with apparently no problems for 15 years or more.
The car was purchased with around 50% finance, primarily to retain some leverage on the dealer if faults occour (due to previous experience).
7 months into ownership, but only around 1500 miles, the car is taken to a specialist for diagnosis of a an engine issue.
The specialist diagnoses that the engine is now junk and full of metal chunks/filings that have now gone all round the engine and ruined everything such as the Turbos etc, also the issues have caused the pistons to destroy the block.
The rebuild bill is quoted at £13k.
The warranty company won’t touch the repair because the fault was clearly present at the point of sale, but just wasn’t showing itself as obviously as it was 1500 miles later.
The cause of the fault was a poor previous engine rebuild.
The dealer says ‘sorry, the warranty from us was only 6 months’, but the finance company tell him the car should be fit for purpose for 12 months and tell him to sort it.
He agrees to the repairs and tells the specialist directly to go ahead and do all the work required.
The car is away for 3 months and during that time, the dealership has gone bust and disappeared.
Anyone had this before?
I've had similar. Car is purchased for around £45k from ‘sports and prestige’ dealership which has been trading with apparently no problems for 15 years or more.
The car was purchased with around 50% finance, primarily to retain some leverage on the dealer if faults occour (due to previous experience).
7 months into ownership, but only around 1500 miles, the car is taken to a specialist for diagnosis of a an engine issue.
The specialist diagnoses that the engine is now junk and full of metal chunks/filings that have now gone all round the engine and ruined everything such as the Turbos etc, also the issues have caused the pistons to destroy the block.
The rebuild bill is quoted at £13k.
The warranty company won’t touch the repair because the fault was clearly present at the point of sale, but just wasn’t showing itself as obviously as it was 1500 miles later.
The cause of the fault was a poor previous engine rebuild.
The dealer says ‘sorry, the warranty from us was only 6 months’, but the finance company tell him the car should be fit for purpose for 12 months and tell him to sort it.
He agrees to the repairs and tells the specialist directly to go ahead and do all the work required.
The car is away for 3 months and during that time, the dealership has gone bust and disappeared.
Anyone had this before?
I sympathise. I bought a Merc SLK 350. Balance shaft went and the estimate was £7,000 for similar reasons as you. I contacted the warranty company and they pointed out, quite rightly, that the problem must have been there when I bought the car just a few months previously. They offered £500 as a 'good will' gesture. The dealer had gone bust in the meantime and the new company starting up on the same site had 'no connection' with the previous one.
I went to see a lawyer friend who asked if I had the car on HP, but I'd bought it cash. It seems that under HP you get some protection.
As I say, I sympathise.
The car was worth up to £12,000 in decent condition and my mileage. I found a Merc specialist who had a spare engine. I sold him my car, for £7,000, and he replaced the engine. He was going to rebuild mine and sell it but, like yours, everything was knackered. It was the balance shaft gear - sintered mental! - that had gone and it was just the wrong side of the oil filter. Bores, bearings, oil pump, cams; everything needed replacing. I'm still bitter about it.
PF62 said:
mikeveal said:
Section 75 of the consumer credit act 1974.
Section 75 covers goods or service costing between £100 and £30,000. As the car cost £45k it doesn't apply.Section 75a covers up to £60260 provided that the credit agreement is specifically linked to the goods. So a Hire Purchase or PCP provider would be liable, but the provider of a credit card or personal loan used to fund the purchase would not be liable.
This is fascinating. If it's true that, up to a set limit, the HP/PCP funder is liable for the goods being of merchantable quality then how little of the total purchase price needs to be financed for this to apply? (I assume, without evidence, that the limit of liability is the value of the goods, not the amount advanced). Could you (if the finance provider accepted it) pay 59k in cash and finance 1k of a £60k car and effectively get a far more reliable 12-month warranty than you'd get from the kind of "specialist dealer" I've always avoided buying from precisely because they're likely to a) deny responsibility and then b) do a midnight flit when they see the colour of your lawyers? That would definitely be worth the tiny interest payments.
A similar thing happened to my mother.
Bought a newish car from private dealer with a 6 month warranty. Major engine failure occurred 4 months in.
Went to claim and were told the dealer no longer trades therefore the warranty was void as it was with the dealer or some nonsense.
Can’t remember the ins and outs but it was total b
ks. When I looked into the dealer he had closed and opened over 10 times just with a slightly different name.
Now they buy from a main dealer.
Brother bought a 6 year old fiesta with a years warranty for parts and labour. Engine let go out of the blue randomly no fault of his from what could be diagnosed. Crate engine fitted within 2 weeks courtesy car provided no hassle!
The Difference between warranty from a brand dealer to a warranty direct .. which as we’ve seen are a corrupt pos.
Bought a newish car from private dealer with a 6 month warranty. Major engine failure occurred 4 months in.
Went to claim and were told the dealer no longer trades therefore the warranty was void as it was with the dealer or some nonsense.
Can’t remember the ins and outs but it was total b
ks. When I looked into the dealer he had closed and opened over 10 times just with a slightly different name. Now they buy from a main dealer.
Brother bought a 6 year old fiesta with a years warranty for parts and labour. Engine let go out of the blue randomly no fault of his from what could be diagnosed. Crate engine fitted within 2 weeks courtesy car provided no hassle!
The Difference between warranty from a brand dealer to a warranty direct .. which as we’ve seen are a corrupt pos.
964Cup said:
...and presumably this would also cover purchasing from a private seller, provided the purchase price was under the relevant threshold for the type of funding?
I may never pay (all) cash for a used car again.
Are you referring to Section 75?I may never pay (all) cash for a used car again.
A private seller who has a credit card merchant agreement, or his/her own Consumer Credit Act licence to offer finance, or, failing that, an arrangement with another entity which does.
Hmmm: good luck with that.
Forums | Speed, Plod & the Law | Top of Page | What's New | My Stuff