The consumer’s issue:
“In 2013, I bought a 9 year old vehicle with 41,200 miles on the clock. I was provided with a dealer guarantee when I bought it, which I’ve renewed every year since. When driving from London to Switzerland in February 2017, I experienced a loss of power. The car was still driveable, but had a restricted power output. I took it to a dealership in Switzerland and they reported that the EGR valve was most likely the problem. I sent the invoice to the warranty provider but they only offered £85 out of a £1,883 bill as they said the EGR failure would have been caused by excess carbon build-up which is excluded under the warranty. As the dealership didn’t confirm that was the cause of failure, and my original policy did not include this clause, I think that my claim should be covered.”
The accredited business’ response:
- The product was purchased in January 2016, and the consumer signed the documentation and was sent the terms and conditions.
- The terms and conditions exclude breakdowns caused by “overheating, corrosion or the gradual reduction in operating performance commensurate with age and mileage covered by the vehicle”.
- As such, the EGR and all of the associated parts of the repair bill would not be covered. We did pay out on glow plugs and a brake light switch, but the EGR valve isn’t covered.
The adjudication outcome:
- The adjudicator didn’t uphold the customer’s complaint.
- The adjudicator felt that the most likely cause of failure was wear and tear, in line with the age and mileage of the car, and that this wouldn’t be covered under the policy.
- The consumer felt that, if this was the case, the warranty provider shouldn’t have sold her the cover because they were aware of the age and mileage of her vehicle and that it seemed like she would not get much benefit from it.
The ombudsman’s final decision:
- The ombudsman agreed with the adjudicator that the cause of failure was, most likely, a “gradual reduction in operating performance” and that there was no sudden mechanical breakdown, which is what would have been covered under the policy.
- There was limited technical evidence, but what we did have was a comment from the Swiss dealership explaining that the failure was most likely due to poor quality fuel or deposits from the gas, which supported a conclusion of wear and tear.
- It was accepted that the term relating to carbon build-up did not form part of the consumer’s cover, but the term now relied on by the warranty provider did.
- In terms of whether the cover provided any benefit to the consumer, the warranty provider had paid out on some elements of the claim which indicated it could be of use and therefore it wasn’t considered to be mis-sold. As such, no award was made to the consumer.