PCP misselling.
Discussion
Soov330e said:
Well the position at Law is as I said.
You do not have to pay for excess mileage.
You'll know better than most that nothing in law is black and white. You do not have to pay for excess mileage.
I can't find the thread where someone quoted the letter they got from VW FS but I'm sure it quoted section 101 (2) of the CCA: "Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination."
Soov330e said:
Damage as a result of failing to take "reasonable care of the goods" you do.
If anything, I think "reasonable care" is more of a grey area - finance companies can try and be unrealistically stringent on this.Sheepshanks said:
Soov330e said:
Well the position at Law is as I said.
You do not have to pay for excess mileage.
You'll know better than most that nothing in law is black and white. You do not have to pay for excess mileage.
I can't find the thread where someone quoted the letter they got from VW FS but I'm sure it quoted section 101 (2) of the CCA: "Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination."
Soov330e said:
Damage as a result of failing to take "reasonable care of the goods" you do.
If anything, I think "reasonable care" is more of a grey area - finance companies can try and be unrealistically stringent on this.On the second point I agree entirely.
Ginge R said:
Thanks. I haven't asked about the condition of the car, but I suspect the mileage is going to drift over what was agreed. Which begs another question. If you can't be penalised for breaching mileage agreements, why doesn't everyone just ask for a quote on minimal miles? The dealer could quote a low revised 'gmfv' based on the miles of course, but why wouldn't everyone vt at their earliest PCP option point in order to mitigate the loss, pro rata?
Just a thought. Thanks for your reply.
Imho a lot of people do that albeit simply to keep the monthlies down. Interesting points re just handing it back even with mega mileage, genuinely unaware of that.Just a thought. Thanks for your reply.
TX.
Just butting in here - while I have heard about the 'loophole' mentioned here before regarding VT'ing a PCP agreement in order to avoid excess mileage charges - the consumer credit act advises to the contrary.
Here's a excerpt from a PCP agreement printed today
Termination: Your Rights
You have a right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £x. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more.
This means that you can terminate this agreement at any time before your final repayment falls due by giving us written notice. You will have to return the Vehicle and pay (i) any arrears and any other sums which have become payable under the agreement before the termination (including any Excess Mileage Charge) , plus (ii) the amount (if any) by which one-half of the total amount payable exceeds the amount paid by you including the advance payment plus (iii) if you do not return the Vehicle in good repair and condition, the sum required to compensate us for this. This will be your maximum liability if you comply with these requirements.
And:
Excess Mileage Charges (Continued)
We will charge you x pence for each mile in excess of the Maximum Total Mileage. If you return the Vehicle before the end of the agreement, the Total Maximum Mileage will be reduced to reflect the shorter period of hire on a pro-rata basis. Your obligation to pay any Excess Mileage Charge will accrue immediately prior to termination.
And from the Consumer Credit Act:
99 Right to terminate hire-purchase etc. agreements.
(1) At any time before the final payment by the debtor under a regulated hire-purchase or regulated conditional sale agreement falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement.
(2) Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.
Therefore, the finance companies are complying in line with the Consumer Credit Act, and are, quite rightly, entitled to charge and receive pro-rata excess mileage.
Nevertheless I wish you the best of luck with disputing the charges.
Here's a excerpt from a PCP agreement printed today
Termination: Your Rights
You have a right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £x. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more.
This means that you can terminate this agreement at any time before your final repayment falls due by giving us written notice. You will have to return the Vehicle and pay (i) any arrears and any other sums which have become payable under the agreement before the termination (including any Excess Mileage Charge) , plus (ii) the amount (if any) by which one-half of the total amount payable exceeds the amount paid by you including the advance payment plus (iii) if you do not return the Vehicle in good repair and condition, the sum required to compensate us for this. This will be your maximum liability if you comply with these requirements.
And:
Excess Mileage Charges (Continued)
We will charge you x pence for each mile in excess of the Maximum Total Mileage. If you return the Vehicle before the end of the agreement, the Total Maximum Mileage will be reduced to reflect the shorter period of hire on a pro-rata basis. Your obligation to pay any Excess Mileage Charge will accrue immediately prior to termination.
And from the Consumer Credit Act:
99 Right to terminate hire-purchase etc. agreements.
(1) At any time before the final payment by the debtor under a regulated hire-purchase or regulated conditional sale agreement falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement.
(2) Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.
Therefore, the finance companies are complying in line with the Consumer Credit Act, and are, quite rightly, entitled to charge and receive pro-rata excess mileage.
Nevertheless I wish you the best of luck with disputing the charges.
Edited by rfoster on Tuesday 23 May 15:07
Terminator X said:
Imho a lot of people do that albeit simply to keep the monthlies down. Interesting points re just handing it back even with mega mileage, genuinely unaware of that.
TX.
Some dealers actively load up PCP quotes with the lowest mileage, say 5k miles per annum, knowing full well your doing over say 15k miles to bring the costs down with VT in mind. I hear of people that stop driving their new cars, because they will exceed the mileage and take the bus instead. TX.
Recently my mother-in law's VW UP was coming up to the halves mark and she wanted to change it. Her car had negative equity, circa £1,300 versus market value, or she could pay £400 to VT it, so this was a no brainer!
This is of course all very well if you do not want to ever own the asset and treat cars like a monthly rental, which many do..
G
rfoster said:
Just butting in here - while I have heard about the 'loophole' mentioned here before regarding VT'ing a PCP agreement in order to avoid excess mileage charges - the consumer credit act advises to the contrary.
Here's a excerpt from a PCP agreement printed today
Termination: Your Rights
You have a right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £x. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more.
This means that you can terminate this agreement at any time before your final repayment falls due by giving us written notice. You will have to return the Vehicle and pay (i) any arrears and any other sums which have become payable under the agreement before the termination (including any Excess Mileage Charge) , plus (ii) the amount (if any) by which one-half of the total amount payable exceeds the amount paid by you including the advance payment plus (iii) if you do not return the Vehicle in good repair and condition, the sum required to compensate us for this. This will be your maximum liability if you comply with these requirements.
And:
Excess Mileage Charges (Continued)
We will charge you x pence for each mile in excess of the Maximum Total Mileage. If you return the Vehicle before the end of the agreement, the Total Maximum Mileage will be reduced to reflect the shorter period of hire on a pro-rata basis. Your obligation to pay any Excess Mileage Charge will accrue immediately prior to termination.
And from the Consumer Credit Act:
99 Right to terminate hire-purchase etc. agreements.
(1) At any time before the final payment by the debtor under a regulated hire-purchase or regulated conditional sale agreement falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement.
(2) Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.
Therefore, the finance companies are complying in line with the Consumer Credit Act, and are, quite rightly, entitled to charge and receive pro-rata excess mileage.
Nevertheless I wish you the best of luck with disputing the charges.
Thank you for the legal lecture Here's a excerpt from a PCP agreement printed today
Termination: Your Rights
You have a right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £x. If you have already paid at least this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more.
This means that you can terminate this agreement at any time before your final repayment falls due by giving us written notice. You will have to return the Vehicle and pay (i) any arrears and any other sums which have become payable under the agreement before the termination (including any Excess Mileage Charge) , plus (ii) the amount (if any) by which one-half of the total amount payable exceeds the amount paid by you including the advance payment plus (iii) if you do not return the Vehicle in good repair and condition, the sum required to compensate us for this. This will be your maximum liability if you comply with these requirements.
And:
Excess Mileage Charges (Continued)
We will charge you x pence for each mile in excess of the Maximum Total Mileage. If you return the Vehicle before the end of the agreement, the Total Maximum Mileage will be reduced to reflect the shorter period of hire on a pro-rata basis. Your obligation to pay any Excess Mileage Charge will accrue immediately prior to termination.
And from the Consumer Credit Act:
99 Right to terminate hire-purchase etc. agreements.
(1) At any time before the final payment by the debtor under a regulated hire-purchase or regulated conditional sale agreement falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement.
(2) Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.
Therefore, the finance companies are complying in line with the Consumer Credit Act, and are, quite rightly, entitled to charge and receive pro-rata excess mileage.
Nevertheless I wish you the best of luck with disputing the charges.
Edited by rfoster on Tuesday 23 May 15:07
There is no obligation to pay excess mileage charges. End of story. Look at my profile.
What does 'returning the vehicle before the end of the agreement' mean?
Surely when you VT, the agreement immediately ends. Then you return the vehicle
I don't see that a term relating to mileage could then be retrospectively applied in an agreement that no longer exists.
I can s99.2 applying to other stuff incurred during the agreement such as payment fees, admin charges etc. But mileage? Have there been any publicised cases where a finance co have been successful in chasing mileage excess following VT?
Surely when you VT, the agreement immediately ends. Then you return the vehicle
I don't see that a term relating to mileage could then be retrospectively applied in an agreement that no longer exists.
I can s99.2 applying to other stuff incurred during the agreement such as payment fees, admin charges etc. But mileage? Have there been any publicised cases where a finance co have been successful in chasing mileage excess following VT?
essayer said:
What does 'returning the vehicle before the end of the agreement' mean?
Surely when you VT, the agreement immediately ends. Then you return the vehicle
I don't see that a term relating to mileage could then be retrospectively applied in an agreement that no longer exists.
I can s99.2 applying to other stuff incurred during the agreement such as payment fees, admin charges etc. But mileage? Have there been any publicised cases where a finance co have been successful in chasing mileage excess following VT?
Yes - http://www.ombudsman-decisions.org.uk/viewPDF.aspx...Surely when you VT, the agreement immediately ends. Then you return the vehicle
I don't see that a term relating to mileage could then be retrospectively applied in an agreement that no longer exists.
I can s99.2 applying to other stuff incurred during the agreement such as payment fees, admin charges etc. But mileage? Have there been any publicised cases where a finance co have been successful in chasing mileage excess following VT?
(the very first link on google as it happens)
I appreciate what my co-poster says above, but finance companies have to be very precise in complying with the law in order to provide any form of financial agreement. They certainly won't put anything into an agreement which is in contravention to the consumer credit act & consumer rights act.
Whether you can try and fight excess mileage charges through the courts or via the financial ombudsman is up to you!
Soov330e said:
Thank you for the legal lecture
There is no obligation to pay excess mileage charges. End of story. Look at my profile.
You keep saying that, but it would be helpful if you would explain how Section 99 (2) of the CCA doesn't mean what it apparently seems to to us lay people. VW is relying on this section to recover excess mileage and I've seen a forum thread elsewhere about Peugeot doing it too.There is no obligation to pay excess mileage charges. End of story. Look at my profile.
OK, VW has form for misleading people but you'd kinda think they'd be pretty sure of their ground before doing this.
You're certain you're right - I'm sure VW FS has had opinion that is equally certain they're right.
Soov330e said:
FCA decisions are not binding upon the consumer, and generally adjudicated by idiots.
This is my favourite http://www.ombudsman-decisions.org.uk/viewPDF.aspx...
Soov330e said:
Thank you for the legal lecture
There is no obligation to pay excess mileage charges. End of story. Look at my profile.
Soov330e, genuinely interested in your views on this and I don't mean this post to question you in any way.There is no obligation to pay excess mileage charges. End of story. Look at my profile.
As I mentioned in my previous post I was under the impression, information direct from a finance companies legal department, that they can chase excess mileage on a PCP agreement when a deal is vt'd on the basis that the excess costs were effectively accrued before the vt point and therefore these costs were already due just not charged out yet. In a normal situation they would be charged out at the end but in a vt situation they can charge out at that point.
The above copy and paste from a finance companies finance documents say exactly the same thing.
So are finance company acting illegally, giving out illegal advice and using illegal paperwork/contracts ?
If they are that's got miss selling scandal written all over it.
Stupot123 said:
Soov330e said:
Thank you for the legal lecture
There is no obligation to pay excess mileage charges. End of story. Look at my profile.
Soov330e, genuinely interested in your views on this and I don't mean this post to question you in any way.There is no obligation to pay excess mileage charges. End of story. Look at my profile.
As I mentioned in my previous post I was under the impression, information direct from a finance companies legal department, that they can chase excess mileage on a PCP agreement when a deal is vt'd on the basis that the excess costs were effectively accrued before the vt point and therefore these costs were already due just not charged out yet. In a normal situation they would be charged out at the end but in a vt situation they can charge out at that point.
The above copy and paste from a finance companies finance documents say exactly the same thing.
So are finance company acting illegally, giving out illegal advice and using illegal paperwork/contracts ?
If they are that's got miss selling scandal written all over it.
DailyMail said:
If you have repaid more than half of the loan, you can walk away without any extra charges and it won't affect your credit rating — this is your legal right.
Useful (not definitive, granted) summary.http://www.thisismoney.co.uk/money/cars/article-45...
Ginge R said:
Agree, and one or two useful pieces of legislation exist to help companies which are sufficiently motivated, insightful and resolute, to turn the unscrupulous hunter into the hunted through criminal and civil means.
But there are some who are probably genuinely unwary. I was asking because I read some lease documents from last year, and the detail was conspiciously light. The guaranteed future value risk warnings were practically non existent and didn't numerate any shortfall consequences, the lease APR was the same as hire purchase - it's my understanding that it's calculated differently with a lease agreement but that wasn't explained, the GAP was sold on the same day (I thought there now had to be a GAP gap, so to speak). The list goes on, so I won't.
If there is a bubble and price drop (were VW trade-in prices affected eighteen months ago because of dieselgate?), there could be problems ahead. I'm not advocating anyone and everyone beats a path to their main dealer. Yes, there will be the ambulance chasers, but there are also the sub prime-esque victims who were flogged a collaterised pup. If the market does fall, there could be problems. Bear in mind we have become used to ultra low interest rates, and most taking advantage of PCP have done so on the basis of low rates (which can now only go one way).
If new PCP becomes unaffordable, if there's oversupply, I was simply wondering if there are likely to be trade-in value consequences that haven't properly been thought through - something most likely to affect those least likely to afford the shortfall. My insight isn't strong enough to have a firm opinion - hence my question. Not for me btw, I decided against leasing and went down the barge route - someone else took the hit long ago, and I've got burr and hide for the price of three or four monthly XF payments.
You keep talking saying lease when talking about PCP. They are two different products.But there are some who are probably genuinely unwary. I was asking because I read some lease documents from last year, and the detail was conspiciously light. The guaranteed future value risk warnings were practically non existent and didn't numerate any shortfall consequences, the lease APR was the same as hire purchase - it's my understanding that it's calculated differently with a lease agreement but that wasn't explained, the GAP was sold on the same day (I thought there now had to be a GAP gap, so to speak). The list goes on, so I won't.
If there is a bubble and price drop (were VW trade-in prices affected eighteen months ago because of dieselgate?), there could be problems ahead. I'm not advocating anyone and everyone beats a path to their main dealer. Yes, there will be the ambulance chasers, but there are also the sub prime-esque victims who were flogged a collaterised pup. If the market does fall, there could be problems. Bear in mind we have become used to ultra low interest rates, and most taking advantage of PCP have done so on the basis of low rates (which can now only go one way).
If new PCP becomes unaffordable, if there's oversupply, I was simply wondering if there are likely to be trade-in value consequences that haven't properly been thought through - something most likely to affect those least likely to afford the shortfall. My insight isn't strong enough to have a firm opinion - hence my question. Not for me btw, I decided against leasing and went down the barge route - someone else took the hit long ago, and I've got burr and hide for the price of three or four monthly XF payments.
Also i dont get the "The guaranteed future value risk warnings were practically non existent and didn't numerate any shortfall consequences" - at the end of a PCP deal, you can hand the car back with nothing further to pay (subject to fair wear and tear). If there is a shortfall in the value of the car relative to the GFV then its the finance companys problem.
With a PCP deal, you pay a deposit, monthly payments then either pay the residual value or hand the car back.
Its not complicated, its been around since the 1980s and TBH anyone who starts bleating about being "mis-sold" is just hoping for com-pen-say-shun.
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