Dealer Finance - Getting out?

[dele]

Basically i took my M3 back into BMW last month to part ex it for a new car, they matched the M3s value to the outstanding value of the finance and i paid a deposit for the new car

Now I'm 99% sure in saying that i never signed any finance agreement for the new car and i received a letter last week saying that the M3s finance has been settled and ive check my Credit Expert account (i know, i know) and it shows the BMW account as settled

So,

I've found something better, so can i just cancel this car, lose my deposit (wasn't huge) and just walk away?

So by paying a deposit is that still classed as committing to the finance?

[ringram]

Id say that was fine, as you say you will lose the deposit.

[dele]

Fair enough,

I'll give them a call, im sure BMW are going to love me by the end of the day

[dele]

Ok,

Just called them and the sales guy told me that if i cancel now i have to pay 10% of the vehicles value and make up any negative equity in the M3 that i used as Part Exchange, ive got a letter here specifically saying "We can confirm that you no longer have any oligations under this agreement"

However ive looked in the small print and its says nothing about paying 10% of the value if i cancel, the cloestest thing i can see is that if i fail to pay within 21 days of being informed that the goods are ready for delivery, then they'll auction the car and have to make up whatevers left at the end

Are BMW trying to fk me over?

[Sarnie]

dele said:

Ok,

Just called them and the sales guy told me that if i cancel now i have to pay 10% of the vehicles value and make up any negative equity in the M3 that i used as Part Exchange, ive got a letter here specifically saying "We can confirm that you no longer have any oligations under this agreement"

However ive looked in the small print and its says nothing about paying 10% of the value if i cancel, the cloestest thing i can see is that if i fail to pay within 21 days of being informed that the goods are ready for delivery, then they'll auction the car and have to make up whatevers left at the end

Are BMW trying to fk me over?

Yes.

Just ask them where your signature is placed next to these terms and condition.

[PurpleMoonlight]

If there is no provision in the contract for you to terminate it, then if you refuse to proceed with the purchase the dealer could sue you for their lost profit.

Remember, the dealer may well have agreed to pay more for your car than the felt it was worth because they would offset that agaist the profit on the car they were selling you. If you pull out and only hope to lose your small deposit the dealer may well be significantly out of pocket.

[Maz_uk]

PurpleMoonlight said:

If there is no provision in the contract for you to terminate it, then if you refuse to proceed with the purchase the dealer could sue you for their lost profit.

Remember, the dealer may well have agreed to pay more for your car than the felt it was worth because they would offset that agaist the profit on the car they were selling you. If you pull out and only hope to lose your small deposit the dealer may well be significantly out of pocket.

This, they could cancel the settlement and return the part exchange to you.

[Deva Link]

PurpleMoonlight said:

If there is no provision in the contract for you to terminate it, then if you refuse to proceed with the purchase the dealer could sue you for their lost profit.

I bet there's provision in the contract for the dealer to terminate it for pretty well any reason they like and without penalty.

A salesman who had worked for one of the big dealer groups posted a while ago that their group legal advise was that with-holding the deposit wouldn't stand up in court due to the imbalance in the way contracts of sale are typically worded.

As TVR1 points out though, I'm gobsmacked the dealer has settled the finance before the deal was complete. Did they desperately want the car back for some reason?

[Deva Link]

TVR1 said:

Maybe Thompson v Robinson Gunmakers Ltd [1955] should be a sticky regarding deposits/loss of profit/etc.. but it is still pretty much the bible.

Is there a more recent case than that? That refers to a transaction with a business (Robinson Gunmakers Ltd were the customer) and it makes reference to the Sale of Goods act 1893.

Consumers are in a much stronger position these days than business's (the law of contract still applies to B2B transactions) and SOGA has been replaced at least a couple of times since 1893.


Anyway, I would look to the Unfair Contract Terms Act 1977. http://whatconsumer.co.uk/unfair-contract-terms

"In a nutshell, this piece of legislation protects consumers who enter into legally binding agreements with suppliers where the contract is biased in favour of the supplier. Unfair clauses are those which try to exclude any of the following:
.....
More recently introduced European Regulations clarify further definitions of what constitutes ‘unfair’.
....
Allowing the supplier to retain money in the event that you cancel, but not obliging the supplier to pay compensation in the event that they cancel."


Obviously if the contract does impose compensation clauses on the seller for failure to perform, then the OP is in a bit of trouble. But I've never seen that on a car order form.

[bigbubba]

Maz_uk said:

This, they could cancel the settlement and return the part exchange to you.

No they can't.

Once the agreement has been settled it can not be restarted by either party.

The dealer fked up. In normal circumstances they would not settle the old agreement until after the new agreement had been signed. If the finance company was the same for both old and new agreements then the finance company would just do a contra settlement, ie, just pay the dealer the difference between the p/x settlement and the new finance agreement.

This is an industry standard, they messed it up and they do not have a leg to stand on.

[bigbubba]

TVR1 said:

Actually, it can. But has to be done with the agreement of both parties. Where it gets messy, is that the p/ex seems to have long gone. So in this case, no it won't happen.

No they can't, they would have different agreement numbers, ergo not the the same agreement.

Also, as you stated they would need the consent of both parties.

[bigbubba]

TVR1 said:

Mercedes Finance will allow you to, under certain circumstances. IIRC they charge around £200 for this. However, I certainly agree that in this case it is impossible.

I have no experience with MBFS but with every manufacturer finance company and mainstream finance houses I have dealt with they said it needed a new agreement to be signed.

[dele]

Intresting comments and thanks all for the replies

I have decided to continue with the purchase

In response to some of the questions, my P/X has actually been sold already, dont know if that would change anything, but yeah, strange case this one and i was baffled when the letter arrived telling me the finance was settled

[Frog Dog]

What are you buying and why are you getting rid of the M3 so soon??

[JonnyFive]

Frog Dog said:

What are you buying and why are you getting rid of the M3 so soon??

Looking at his profile, M3 had problems and spec'd a 1 Series 335.