The consumer’s issue:
“I purchased a ’66-plate premium SUV in January 2017, and put down a £6,000 deposit and part-exchanged my previous car to reduce the balance payable on the finance agreement.
However, when I went to end the finance agreement around two years after the sale was completed, I noted that, while I had put down a £6,000 deposit, the finance agreement paperwork indicated that I’d only put down a sum of £3,800.
I complained to the vehicle manufacturer, but they were not able to tell me the reason for the £2,200 difference. This discrepancy resulted in me paying about £100 per month extra to repay the finance, and in July 2019, I paid the voluntary termination fee and returned the car. To resolve this dispute, I am looking for the dealership to refund the additional finance repayments I incurred during the time that the finance agreement was in force.”
The accredited business’ response:
- When the consumer completed the purchase of their car from us in January 2017, they put down a £6,000 deposit and part-exchanged an existing vehicle. The manufacturer also added a contribution of £1,500, and the dealership paid £2,175.32, meaning the total deposit equated to £9,675.32.
- However, the customer’s old vehicle had negative equity of £5,679.55 on the finance agreement, resulting in the consumer’s net deposit being £3,995.77. GAP insurance of £399 was equally purchased, so the deposit carried forward to the finance agreement for the new car was £3,596.77.
- This was detailed on the sales invoice that the consumer accepted at the time.
- As such, we do not believe that any compensation to the customer is warranted at this time.
The adjudication outcome:
- The Motor Ombudsman adjudicator reviewed the documentation of the sale, which included evidence of the sales invoice and the outstanding balance of the finance agreement attached to the part-exchanged car.
- He then verified the calculations used by the dealership and confirmed that the consumer’s deposit funds were all accounted for and properly allocated.
- As the deposit received had been used to pay off the existing finance arrangement on the part-exchanged vehicle, with the remaining balance being used to reduce the sum payable on the finance agreement attached to the new car, the adjudicator concluded the business had done nothing wrong and had no obligation to provide the consumer with any financial compensation.
- To aid in the understanding of the allocation of the consumer’s funds, the adjudicator also provided an extract from the spreadsheet he used to verify the dealership’s calculations.
Conclusion:
- The consumer responded to the adjudication to explain they were unhappy with the outcome, as they only elected to proceed with the purchase of the new car due to issues they had had with their part-exchanged car.
- The adjudicator responded explaining that, while he understood what the consumer had said, he remained satisfied there was negative equity attached to the part-exchanged car and that the deposit funds had been properly allocated.
- While the consumer was given the option to escalate the matter for an ombudsman’s final decision, they did not elect to pursue their dispute any further, thereby bringing the case to a close.
