Increased oil consumption

The consumer’s issue:

I bought an extended warranty in January 2018 to cover my hatchback in the event of a mechanical or electrical failure. In August of that year, I noticed the car was using much more oil than usual, though it was still within the recommended tolerances. I asked an engine specialist to look at the vehicle, and they found a problem with the compression on the cylinders. They thought this was caused by the piston rings being worn, though they said the engine would need to be removed to confirm this. I was told the car was drivable, but I kept it off the road just in case.

I contacted the accredited business to try and claim under the warranty, and was told I would need to have the engine stripped to assess the cause of the fault. I did this, and it was confirmed that the piston rings were worn and needed to be replaced, with repair costs estimated to be in the region of £3,000. I asked the warranty provider to cover the repair, but because their independent engineer said I should have noticed the fault earlier, they said the extent of the damage would have been much less, and they refused my claim.

I disagree with this because I told the business about the issue as soon as I knew there was one, and I tried to get the engine inspected before, but because the oil consumption was within tolerance, no fault could be found. I’m therefore looking for the warranty company to cover the full cost of the repairs to the engine.”

The accredited business’ response:

  • We have declined this claim because our independent engineer stated that the reason the car needed a new engine was because of drive-on damage.
  • Whilst there was wear and deterioration to the piston rings, the customer had also continued to drive the vehicle despite warning signs that it was faulty.
  • In these circumstances, the terms and conditions of the warranty allow us to refuse to pay for the work.

The adjudication outcome:

  • Having reviewed the independent report, the adjudicator confirmed that the engineer had identified drive-on damage as contributing to the engine’s eventual failure, and the warranty’s terms did include an exclusion for any faults caused by a consumer’s continued use of the vehicle.
  • They therefore felt that the accredited business had acted fairly in declining the claim and did not uphold the case in the customer’s favour.
  • The consumer disagreed on the basis that they could not have been aware of the fault prior to the breakdown, and that even if there was drive-on damage, the repair now required was the same as that which would have been needed, meaning there were no additional costs.
  • On this basis, the complaint was referred to an ombudsman for a final decision.

The ombudsman’s final decision:

  • The ombudsman reviewed the case and decided to partially uphold it.
  • She agreed with the adjudicator that there was technical evidence that demonstrated the consumer was responsible for some of the damage.
  • She felt that the customer was aware of the increased oil consumption, enough to approach a specialist to inspect the car, but had continued to drive it regardless.
  • She also found that, whilst the piston rings had clearly been wearing for some time, additional damage had been caused to the engine assembly that otherwise could have been avoided.
  • However, the ombudsman didn’t think it was fair for the accredited business to refuse to pay all of the repair costs involved.
  • This was because the warranty’s terms and conditions said that, where there was drive-on damage, the warranty provider would take liability for any reasonable repair costs as if the vehicle had been stopped at the point of the fault occurring.
  • The ombudsman therefore looked at the total repair bill of £2,961,61 and calculated that of that, £1,405.45, including VAT, was spent on repairing the piston rings and, as such, this sum should be refunded to the consumer by the accredited business.
  • That was because the piston rings would always have been faulty, and so were unaffected by the customer’s actions.
  • The remaining £1,556.16 was the consumer’s liability, because it could be attributed to the additional damage caused by the customer continuing to drive the vehicle.
  • The ombudsman upheld part of the complaint in the consumer’s favour, directing the accredited business to reimburse them the sum of £1,405.45.

Conclusion:

  • The consumer accepted the ombudsman’s final decision and received their refund, meaning the case was closed.