[Belstar]

Sorry, this is a long one! We took delivery of our new MG ZS a few weeks ago, and while the vehicle is great and we like it very much, the leasing company has just dropped a bit of a bombshell on us.

The paperwork and hire agreement prior to signing stated that the registration date of the vehicle was the date at which the vehicle was ordered - a brand new vehicle, exactly what we wanted. They've now sent a letter along the lines of, "Oops, we made a mistake, the vehicle was actually pre-registered by a dealer in October, and we're now actually the second keeper." They also stated in the letter, "Please note that this variation is of a minor and non-financial nature".

Now quite frankly for me this has changed the agreement completely, and I don't agree with their declaration that it is both "minor" and "non financial".

It is financial, because the vehicle is not 'new' as advertised, but is technically 'used'. This affects the value of the vehicle, and thus what I am willing to pay for it - frankly I wouldn't have entered into the agreement had I been told it was pre-registered. This is mainly because a pre-registered vehicle adds further financial liabilities to myself. Firstly, the vehicle will now need an additional annual service before the end of the agreement (the originally stated registration date meant that the service would not fall 'overdue' until a week after the return of the vehicle) - this has to be done at my cost. Secondly, because I/the leasing company is not the first keeper of the vehicle, my insurance considers the vehicle used and so won't provide 'new for old' cover - I therefore now need to take out GAP insurance to cover any insurance shortfall.

The change is not minor to me because I would not have ordered an EV that I knew had been sitting in a warehouse somewhere for three months, degrading its battery for that time. The battery is therefore likely to suffer greater degradation had the vehicle been actually new, thus affecting my enjoyment and utility of the vehicle. This is not likely to be an issue in the immediate term, but is likely to affect the latter part of the hire period.

So I suppose I'm gearing up for a fight. The lease is 48 months, which I was fine with for the new car, but not a used car. Has anybody any experience with mistakes by leasing companies? I'm not looking to end the agreement as such (but would do if push came to shove) - I'd now like to modify the agreement for it to be shorter, to reflect the vehicle not being new, the increased financial liability, and the greater-than-expected battery degradation.

I plan to write to the leasing company stating that I do not accept the variation and putting these points forward. Is there any mileage in this or am I wasting my time against Goliath?

 

[cah197]

What was the mileage when you received the vehicle?

If it was not substantial, then I don’t think you can argue a pre-Reg is a used car. Pre registration is a fairly common thing.

As the car is a lease it’s not like you are going to be worse off because of resale value or anything.

 

[Belstar]

What was the mileage when you received the vehicle?

If it was not substantial, then I don’t think you can argue a pre-Reg is a used car. Pre registration is a fairly common thing.

As the car is a lease it’s not like you are going to be worse off because of resale value or anything.

The car came with delivery mileage, so it's not 'used' as such - but a pre-reg vehicle is objectively worth less than a brand new one. I've leased a (known) pre-reg car before and it accordingly was substantially cheaper than leasing a new one. Pre-reg MG ZSs are selling for less than £20k, where an actual new one is £3-5k more. This therefore would have affected the decision to lease vs buy (it would actually have been cheaper to buy the pre-reg). The 'used' statement really reflects my insurance, which will only provide new-for-old where the registered keeper is the first keeper from new.

 

[Johnny Read]

My initial thoughts... I could argue I was in a worse position as my car was delivered with 250+ miles on the odometer. It was driven from the supplying dealer on the roads to my home!

I doubt the battery will suffer any degradation for that short time, and if it does, will you really notice it after 48 months? Id say the degredation will be worse if the battery is left permanently at 100% SOC, and there is no way for the lease company to check how the battery is managed by the user.

Anyone who leases a car doesn't own it. They don't even receive the V5 form. That is a benefit to me, as I don't personally suffer from depreciation of the car. If the car depreciates more than the actual lease cost, I've gained a massive benefit and not locked my own capital in the car.

On the insurance, I didn't check for specifics on payouts, but for peace of mind I took out a GAP policy from ALA insurance. Too much to gamble with potential insurance payouts not covering it all if they start to um and ah. It was cheap when compared to the actual lease cost.

Out of interest why did you choose to take out a 48 month lease? I didn't seem to suffer a penalty with choosing a 24 month lease ( circa £224 all in for an Ioniq38) and there will be some amazing new cars available in 2022 when the lease expires.

 

[mikegs]

I'd certainly fight them - but nicely.
Explain why there is a financial hit for you (servicing, GAP, etc) and ask for a payment or reduction in lease payments to cover that.
You could also ask for the lease period to be reduced by 6 months or so to account for the age of the car, though that won't help with your insurance.
Failing all that just reject the car and lease because they are in breach. They've admitted it. It's a big stick but might get them to make it right if gentler words fail.

 

[Belstar]

My initial thoughts... I could argue I was in a worse position as my car was delivered with 250+ miles on the odometer. It was driven from the supplying dealer on the roads to my home!

Crikey! Not sure I'd have been happy about that. This vehicle was also driven from the dealer, but only 70+ miles.

Out of interest why did you choose to take out a 48 month lease? I didn't seem to suffer a penalty with choosing a 24 month lease ( circa £224 all in for an Ioniq38) and there will be some amazing new cars available in 2022 when the lease expires.

In this instance it was significantly cheaper - by about £25/month. I think it's dependent on the leasing company and the specific vehicle - my previous lease was actually cheaper to take over 24 months rather than 36 or 48.

 

[Padrino]

Well.... I am not a professional regarding contracts writing and execution but reading your first post I would say that the contract you have signed is not for the vehicle you have received. The contract is binding agreement between two parties and things such "ops, we made a mistake" few weeks later is not an excuse. I don't think that if you go hard on them they will fight you. They should know that they don't stand a chance in court if you go down this road.

 

[People's Front of Judea]

What is the date you took delivery of the car, the date on the letter and the date you received it?

 

[Belstar]

What is the date you took delivery of the car, the date on the letter and the date you received it?

The order was placed with the broker on the 11th January. The registration date shown on the leasing company's hire agreement sent for me to sign showed the registration date as the 11th January (i.e suggesting it was registered when the order was placed). The vehicle was delivered on the 29th January. The letter confirming the mistake was dated 5th February, but was only received yesterday.

 

[dk6780]

I can't get my head around what you have "lost". You are in effect renting a car for 48 months and whether the V5 says one or two owners is irrelevant to that. If the car had no previous owners but, like a lot of new cars currently, had sat around after leaving the factory would you have an issue?
If you choose to buy the car at the end of the lease you can expect the value to be based on two previous owners. But there's no guarantee that you will take that option.

 

[Belstar]

I can't get my head around what you have "lost". You are in effect renting a car for 48 months and whether the V5 says one or two owners is irrelevant to that.

I've lost:

• The cost of GAP insurance, which I wouldn't have needed to purchase should the vehicle actually have been new (as stated in the signed agreement). My insurance specifically states that the current registered keeper needs to be the first keeper from new in order to benefit from 'new for old' insurance.
• The cost of the fourth year service, which I am now liable for and wouldn't have been had the vehicle been new
• The financial benefit of leasing vs purchasing. In this instance, leasing a pre-registered MG ZS EV is likely a higher TCO than purchasing one of the many pre-registered vehicles currently listed on Autotrader. The vehicle was presented as new, and my calculations were based on this. Had the vehicle been presented as pre-registered, it is highly likely that I would not have entered into the lease and would have purchased a vehicle instead.

If the car had no previous owners but, like a lot of new cars currently, had sat around after leaving the factory would you have an issue?

I probably wouldn't, no, because nobody other than the dealer really knows how old a vehicle actually is. But this vehicle has likely sat around after leaving the factory, and has then knowingly sat for several months afterwards.

 

[cah197]

The car came with delivery mileage, so it's not 'used' as such - but a pre-reg vehicle is objectively worth less than a brand new one. I've leased a (known) pre-reg car before and it accordingly was substantially cheaper than leasing a new one. Pre-reg MG ZSs are selling for less than £20k, where an actual new one is £3-5k more. This therefore would have affected the decision to lease vs buy (it would actually have been cheaper to buy the pre-reg). The 'used' statement really reflects my insurance, which will only provide new-for-old where the registered keeper is the first keeper from new.

But the RRP is irrelevant, the lease deal you have hasn’t changed. Lease companies normally get a better deal than the general public in any case.

The car is the same state as one that wasn’t previously registered - i.e. no-one has used it before you. It’s identical to a new one.

I doubt you have much of a case you haven’t been materially disadvantaged. The lease company told you out of politeness, but as they normally hold the V5, how would you ever normally know?

The insurance case doesn’t apply in your case either, as it’s a lease. The replacement car would be as per the terms of your lease, I expect.

You really are making more of this than is reasonable. Just enjoy the car.

 

[Off-Worlder]

Unfortunately I am unable to offer you any meaningful advice, but I will offer the following information in regards to servicing;

I leased a ‘new’ Outlander in 2019, which turned out to be a pre-REG.

I ordered the car in January, for delivery in April on a 24 month lease.
I was advised by the broker that it would be a pre-reg ‘new’ car, but only some weeks after the paperwork had been signed. This meant it would be a 68 plate car, as opposed to a 19 plate, but at least I knew what I was getting. And because I was only leasing, the 68 plate didn’t bother me.

It wasn’t until after I took delivery so I discovered it was actually pre-registered in December 2018, so not only a registration letter before the delivery date, but even the year before delivery date!

The point here however is that the servicing schedule was not affected. My first service was due 12 months from the date of delivery, not from the date of registration, and this was reflected in the vehicles on-board computer. This I would expect, had been programmed in at the time of pre-delivery inspection, which of course didn’t occur until shortly before delivery.

I assume from this that pre-REG cars are treated differently to ‘used’ cars when it comes to legal agreements, but as I say I’m only assuming, I’m not actually in the know, so to speak.

 

[cah197]

I've lost:

• The cost of GAP insurance, which I wouldn't have needed to purchase should the vehicle actually have been new (as stated in the signed agreement). My insurance specifically states that the current registered keeper needs to be the first keeper from new in order to benefit from 'new for old' insurance.
• The cost of the fourth year service, which I am now liable for and wouldn't have been had the vehicle been new
• The financial benefit of leasing vs purchasing. In this instance, leasing a pre-registered MG ZS EV is likely a higher TCO than purchasing one of the many pre-registered vehicles currently listed on Autotrader. The vehicle was presented as new, and my calculations were based on this. Had the vehicle been presented as pre-registered, it is highly likely that I would not have entered into the lease and would have purchased a vehicle instead.

I don’t know why you’re doing this to yourself.

In any court you would need to show a reasonable loss for:

1. The difference in GAP insurance - have you actually paid for this? Do you have a quote from the insurers for both cases? In any case a pre-Reg car is still new.
2. Cost of fourth service - well you could ask them to waive this for you I suppose. But not huge really.
3. You chose to lease. If you could buy a second hand car and it was cheaper overall for you, then why didn’t you?
   

If the company offered to take back the vehicle, would you?

 

[dk6780]

Thank you for explaining those differences.

I can understand the issue with your gap insurance being invalidated and the fourth year's service, but really not the issue regarding the different cost of leasing a pre-owned car which sounds like buyers remourse having found a cheaper deal.

 

[Belstar]

But the RRP is irrelevant, the lease deal you have hasn’t changed. Lease companies normally get a better deal than the general public in any case.

The RRP is entirely relevant - had I known the lease was for a pre-registered vehicle, I would not have entered into it. I would have purchased a pre-registered vehicle instead. Quite simply, even if through genuine error, the finance agreement was misrepresented.

I doubt you have much of a case you haven’t been materially disadvantaged. The lease company told you out of politeness, but as they normally hold the V5, how would you ever normally know?

I've been materially disadvantaged in that I now have to pay for an extra annual service, and GAP insurance. They also didn't tell me out of politeness, they told me because they were required to tell me under the terms of the contract - by their own admission in the letter.

The insurance case doesn’t apply in your case either, as it’s a lease. The replacement car would be as per the terms of your lease, I expect.

It's specifically mentioned in my insurance policy (the insurance is provided by me, not the leasing company):

We will not pay more than the market value of the car unless:
...
The current registered keeper has owned the car since it was first registered as new
...
In these circumstances, if you agree, we will replace the car with a new car of the same make, model, and specification. If we cannot replace the car with one of the same make, model, and
specification, we will pay the most recent new list pirce, including VAT (where applicable), for that specification of car.

 

[cah197]

They also didn't tell me out of politeness, they told me because they were required to tell me under the terms of the contract - by their own admission in the letter.

Well there you go then. Have they breached their contractual commitment to you?

It's specifically mentioned in my insurance policy (the insurance is provided by me, not the leasing company):

We will not pay more than the market value of the car unless:
...
The current registered keeper has owned the car since it was first registered as new
...
In these circumstances, if you agree, we will replace the car with a new car of the same make, model, and specification. If we cannot replace the car with one of the same make, model, and
specification, we will pay the most recent new list pirce, including VAT (where applicable), for that specification of car.

I highly doubt the value of the car in either case would be materially different. Especially as the insurers will use a WBAC valuation. You’d need to provide evidence to the contrary.

 

[Belstar]

Thank you for explaining those differences.

I can understand the issue with your gap insurance being invalidated and the fourth year's service, but really not the issue regarding the different cost of leasing a pre-owned car which sounds like buyers remourse having found a cheaper deal.

There's no buyer's remorse, the same deals were available when I signed the lease. I signed the lease because it was apparently a better deal, but it turns out that the lease was (for whatever reason) misrepresented and therefore wasn't actually a better deal.

 

[cah197]

There's no buyer's remorse, the same deals were available when I signed the lease. I signed the lease because it was apparently a better deal, but it turns out that the lease was (for whatever reason) misrepresented and therefore wasn't actually a better deal.

It wasn’t, the deal was in line with their contract with you - as you have confirmed.

You just didn’t read the small print.

 

[Belstar]

Well there you go then. Have they breached their contractual commitment to you?

That's ultimately for an ombudsman to decide, should it get that far. But it my view, yes - they were contracted to supply a new vehicle that was registered upon ordering. They did not - they supplied an older pre-registered vehicle.