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Discussion Starter #1
Hello,

Has anyone successfully managed to deal with threats from car finance company over outrageous charges for returning your EV?

If car finance company refuses to accept customer’s reasons for disputing charges and threatens with passing it on to debt collection, has anyone successfully dealt with such threats from car finance company?

Having looked at the Voluntary Termination Agreement, any customer returning the vehicle after 3 years is expected to have paid at least 50% of the car cost.

Having paid at least £2500 more than the 50% calculated value as on the termination agreement, finance company is still trying to charge outrageous sums for minor wear and tear.

Even if let’s say I accept those charges, I have still ended up paying more for the vehicle and actually I am due a refund. Why should I still pay anything extra, please explain and what are the next steps to challenge this? Finance company has been extremely rude and in fact returned the letter sent to them without even reading it.

To explain the situation in a better way, here is an example:

PCP contract:
  • Vehicle purchased 3 years ago.
  • Vehicle returned 1 month before agreement end date as battery lease agreement and MOT was due for renewal 1 month before car PCP agreement end date.
  • Total amount to be paid on return (50%) for voluntary termination of agreement = £7000
  • Actual amount paid till voluntary termination of agreement = £9500
Total excess amount paid to car finance company = £2500

  • Charges applied by Mannheim Inspection Services = £1000
  • All charges disputed
  • Car finance company refused to cancel the charges.
Now since I have overpaid £2500 already and even if I decide to pay £1000 for wear and tear, am I not owed £1500?

Voluntary Termination Agreement states final liability charges = £0.

Since I have overpaid £2500 already, shouldn’t I be due a refund of £1500 after deduction of any charges for wear and tear?

Any valuable inputs will be appreciated. Thank you.
 

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Hello,

Has anyone successfully managed to deal with threats from car finance company over outrageous charges for returning your EV?

If car finance company refuses to accept customer’s reasons for disputing charges and threatens with passing it on to debt collection, has anyone successfully dealt with such threats from car finance company?

Having looked at the Voluntary Termination Agreement, any customer returning the vehicle after 3 years is expected to have paid at least 50% of the car cost.

Having paid at least £2500 more than the 50% calculated value as on the termination agreement, finance company is still trying to charge outrageous sums for minor wear and tear.

Even if let’s say I accept those charges, I have still ended up paying more for the vehicle and actually I am due a refund. Why should I still pay anything extra, please explain and what are the next steps to challenge this? Finance company has been extremely rude and in fact returned the letter sent to them without even reading it.

To explain the situation in a better way, here is an example:

PCP contract:
  • Vehicle purchased 3 years ago.
  • Vehicle returned 1 month before agreement end date as battery lease agreement and MOT was due for renewal 1 month before car PCP agreement end date.
  • Total amount to be paid on return (50%) for voluntary termination of agreement = £7000
  • Actual amount paid till voluntary termination of agreement = £9500
Total excess amount paid to car finance company = £2500

  • Charges applied by Mannheim Inspection Services = £1000
  • All charges disputed
  • Car finance company refused to cancel the charges.
Now since I have overpaid £2500 already and even if I decide to pay £1000 for wear and tear, am I not owed £1500?

Voluntary Termination Agreement states final liability charges = £0.

Since I have overpaid £2500 already, shouldn’t I be due a refund of £1500 after deduction of any charges for wear and tear?

Any valuable inputs will be appreciated. Thank you.
The amount you pay over the VT amount is completely irrelevant. In order to exercise your right to VT, you have to have paid at least 50% of the total amount payable. You are not due any refund for having paid more.

Therefore the charges are totally separate to the amount you happen to have paid the finance company. There are published guidelines on how 'fair wear and tear' is defined and what you are expected to pay for damages beyond these guidelines.

The more obvious question is why did you go down the route of VT? Surely the car's value as a trade-in was substantially higher than the outstanding finance owing? The damage would have then just been factored into the trade value by who ever was offering to buy it from you (main dealer, local garage, etc.).
 

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With a PCP, Voluntary Termination can legally be carried out when you’ve paid at least 50% of the sum due under the agreement. For a PCP this would also include the balloon payment at the end of the term.

Your finance paperwork will detail that figure precisely.

The key term is ‘at least’ and doesn’t mean you’re due a refund to the 50% level.

You also need to have taken reasonable care of the goods, and is separate to the voluntary termination figure.
 

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evezy referral code d6540
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Check if Manheim are members of BVRLA and subscribe to their fair wear and tear guidelines. You could then use their dispute resolution services.

Hope you don’t come to regret not having simply paid for an MOT, which a three year old car should have sailed through. Going the VT route (it’s not clear that’s actually what you did. You may have just returned your vehicle a month early and paid the final monthly payment anyway) seems a bit of a sledgehammer to crack a nut.
 

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Discussion Starter #6
The amount you pay over the VT amount is completely irrelevant. In order to exercise your right to VT, you have to have paid at least 50% of the total amount payable. You are not due any refund for having paid more.

Therefore the charges are totally separate to the amount you happen to have paid the finance company. There are published guidelines on how 'fair wear and tear' is defined and what you are expected to pay for damages beyond these guidelines.

The more obvious question is why did you go down the route of VT? Surely the car's value as a trade-in was substantially higher than the outstanding finance owing? The damage would have then just been factored into the trade value by who ever was offering to buy it from you (main dealer, local garage, etc.).
Thank you. Went down the route of VT because having contacted few dealers and private sellers, they refused to buy car with battery on lease. MOT was not an issue as due to lockdown MOT were temporarily suspended for 6 months.

Wasn’t keen to continue with EV as battery range drastically drops in winter. So EVs are not suitable for long drives especially in winter. When buying the car 3 years ago, car dealer sugarcoated information on the EV and only quoted highest range of EV. Car dealer failed to explain the downside of low battery range in winters. Also car dealer coerced into buying a car finance scheme by lying that government grant of £4500 and other dealer discounts won’t be applied to the car if car is bought in cash and not using their finance scheme. This is something that I need to raise with Financial Ombudsman directly.
 

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Discussion Starter #7
The amount you pay over the VT amount is completely irrelevant. In order to exercise your right to VT, you have to have paid at least 50% of the total amount payable. You are not due any refund for having paid more.

Therefore the charges are totally separate to the amount you happen to have paid the finance company.
Sorry one more question - Why is amount paid over VT amount irrelevant? I paid £2500 extra. How can that money magically disappear into the thin air? If car finance company is going to charge for any minor wear and tear, then they must deduct these charges from the excess amount paid and refund remaining amount to customer? How is it that they want to levy excess charges for wear & tear but not refund excess money paid? Is this something Financial Ombudsman can help with considering this is a ‘frustration of contract’ ? Asking this question as it may help others too in similar situation and may help them get refunds?
 

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Discussion Starter #8
This looks a reasonable guide on how a VT should work. Damage is a separate issue.


What was the damage?
Thank you. PDF in the link does not open. So could not view it.

Damage:

Dont have full report in front of me but vaguely remember it was:

  • Minor scratches on 3 alloy wheels £85 x 3
  • Paintwork charges for minor scratches on doors (someone put a minor scratch with key on the door in supermarket) - Don’t remember how much they charged for paintwork
  • Charge for a worn out tyre - this was dealers fault who charged £150 for fitting brand new tyre but instead fitted an old tyre.
Total charges are around £1000.
 

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If this was pcp, you don’t have to buy the car and the finance company has to take it back. You should have kept it until the end of the contract, got it mot’d etc.

do you have pictures of the car prior to collection to aid you?
 

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Discussion Starter #10
With a PCP, Voluntary Termination can legally be carried out when you’ve paid at least 50% of the sum due under the agreement. For a PCP this would also include the balloon payment at the end of the term.

Your finance paperwork will detail that figure precisely.

The key term is ‘at least’ and doesn’t mean you’re due a refund to the 50% level.

You also need to have taken reasonable care of the goods, and is separate to the voluntary termination figure.
Yes but if you have paid £2500 in excess of VT amount, how can that money magically disappear into thin air? If car finance company wants to charge for wear and tear, it must be deducted from excess amount paid and remaining amount should be refunded. I need confirmation from Financial Ombudsman on this.
 

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Yes but if you have paid £2500 in excess of VT amount, how can that money magically disappear into thin air? If car finance company wants to charge for wear and tear, it must be deducted from excess amount paid and remaining amount should be refunded. I need confirmation from Financial Ombudsman on this.
Isn't the point that you pay to use the car, which you have done so. The point at which you can VT is when you pass the 50% mark having paid for the car, your not entitled to the extra back, because there was no extra, what you have paid is your monthly payments of what you are due until the end of the contract.
 

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Because you were still using the car.. after the 50% has been passed... you can't expect to do a VT and say I want all the cash back I've paid since the 50% level was reached which was 6 months ago, for example.
You do not get that money back. If you had done the VT before you had reached the 50% level you would have needed to pay them the outstanding amount.
If you continue paying the pcp payments going way over the 50% figure you are still in contract and paying for the use and depreciation of the car.
135388
 

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Yes but if you have paid £2500 in excess of VT amount, how can that money magically disappear into thin air? If car finance company wants to charge for wear and tear, it must be deducted from excess amount paid and remaining amount should be refunded. I need confirmation from Financial Ombudsman on this.
It hasn’t disappeared, it’s been paying for the use of the vehicle by you, and servicing the debt you took out in the form of interest payments.

That interest doesn’t become refundable just because you’ve decided to VT the car and you’re past the 50% point.
 

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Discussion Starter #14
With a PCP, Voluntary Termination can legally be carried out when you’ve paid at least 50% of the sum due under the agreement. For a PCP this would also include the balloon payment at the end of the term.

Your finance paperwork will detail that figure precisely.

The key term is ‘at least’ and doesn’t mean you’re due a refund to the 50% level.

You also need to have taken reasonable care of the goods, and is separate to the voluntary termination figure.
If voluntary termination figure is going to be £7000, why charge customer £9500? 😅 When a car dealer who sells you a car and you also earns commission from finance company knows that expected VT amount for return is £7000, why charge customer extra £2500?

Monthly payments should have been calculated for amounting to £7000 in 3 years and not £9500. 😀 It’s a genuine question as to why deliberately car finance company and the dealer would charge you extra every month when VT amount in 3 years was going to be £7000?

Have you guys never felt to question this to the Ombudsman and FCA? This is an act of deliber mis-selling a car and finance scheme and then trying to extort further money from customer in the name of wear and tear charges.
 

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Discussion Starter #15
It hasn’t disappeared, it’s been paying for the use of the vehicle by you, and servicing the debt you took out in the form of interest payments.

That interest doesn’t become refundable just because you’ve decided to VT the car and you’re past the 50% point.
Don’t get me wrong. But Point I’m making is monthly instalments for 3 years do not reflect £7000. It comes to £9500. And even if car is due for VT at 50% value, with 6 months lockdown and car dealerships closed, how will have customers returned their car? 😅
 

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Because you were still using the car.. after the 50% has been passed... you can't expect to do a VT and say I want all the cash back I've paid since the 50% level was reached which was 6 months ago, for example.
You do not get that money back. If you had done the VT before you had reached the 50% level you would have needed to pay them the outstanding amount.
If you continue paying the pcp payments going way over the 50% figure you are still in contract and paying for the use and depreciation of the car.
View attachment 135388
Agreed. But you are forgetting we have been in a lockdown since mid March. How do we return car and have someone come & inspect the car in a lockdown. We were dealing with an exceptional and unforeseen situation. Also do the car finance companies actually ever send any text message or email reminders for informing customers that they’ve now paid over their VT amount and are eligible to return their vehicle? Think about this situation. Pandemic and lockdown resulted in temporary closures of dealerships, finance company and inspection services and this was beyond customer’s control. Even telecom companies and energy companies have now been mandated to send text and email reminders and letters in the post regarding their contract expiry to customers after crackdown by Ofgem and Ofcom. Why would a car finance company not do the same to formally write to the customer that they have now paid their VT amount and eligible for returning their vehicle.🙂 Isnt a firm regulated by FCA required to send mandatory reminder to customer in writing that their vehicle is now eligible for return as they’ve paid more than VT amount?
 

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Don’t get me wrong. But Point I’m making is monthly instalments for 3 years do not reflect £7000. It comes to £9500. And even if car is due for VT at 50% value, with 6 months lockdown and car dealerships closed, how will have customers returned their car? 😅
The Voluntary Termination figure is not 50% of the value or price you paid for your car, it’s 50% of the amount due under the agreement, which includes the final/balloon payment that would mean you own the car.

It sounds like you don’t properly understand the agreement you’ve entered into?

What was the price of the car, over what term was the PCP and what is the balloon or final payment? What is the minimum amount that the finance agreement states you’ll need to have paid in order to VT?

The clock/payments don’t roll back to when you’d paid half the amount of the value/price paid of the car.
 

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Also do the car finance companies actually ever send any text message or email reminders for informing customers that they’ve now paid over their VT amount and are eligible to return their vehicle?
They might, but they don’t have to. They do that right at the start when you sign your PCP agreement that sets out the terms and conditions along with your legal rights, which includes the circumstances under which you can VT.
 

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@roblox you seem to be confusing the contract for the PCP (that you presumably signed after reading all the terms and conditions) and the minimum legal conditions you are afforded under the Consumer Credit Act.
One is an agreement by both parties, the other is the legal position each party MUST follow.

Not what you want to hear but that's how it is.

Give up on the "extra" £2500, you will get nowhere with that.
But by all means dispute the charges for damage if you wish. They have been known to drop some or all charges when queried but if there is genuinely damage beyond the fair wear and tear guide don't expect them to rollover too easily.
 
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