The consumer’s issue:
“We purchased a four-year-old saloon in December 2015 using a Personal Contract Purchase (PCP) agreement. However, we’ve had a number of issues with our buying experience, and the accredited business hasn’t resolved any of them.
The first is that we thought the car we were buying had 14,000 miles on the clock. However, when we came to view the vehicle, it had actually covered 34,000 miles. This is a significant difference and will have made an impact on the price, but the accredited business refused to offer any kind of discount.
Secondly, we were told that a three-year warranty and breakdown cover policy would be included in the cost of the vehicle. We have since discovered that this was not the case and have had to pay for an extended warranty ourselves.
Finally, and most importantly, we thought we were taking out a 0% interest finance deal, which was a big part of why we chose the PCP arrangement. We have since discovered that the interest rate is 9.4%, which has cost us a lot of money over the lifetime of the agreement.
Despite several months of trying to sort this out with the accredited business, the only offer they have made is to sell us another car at a higher cost than we can afford, and a steep interest rate. To resolve our dispute, we are looking for the dealership to provide a partial refund of the purchase price and for them to pay the interest incurred on the finance agreement it arranged for us.”
The accredited business’ response:
- We accept that there was an error with the mileage in the advertisement, which was caused by a typo when the car was inputted into our system before it came to our dealership.
- As soon as it arrived and we spotted the mistake, we told the consumers, but they still went ahead and agreed to the purchase, so we do not think there is anything else we need to do.
- With the warranty, we have provided documents that show the customers ticked and signed to agree to purchase a one-year extended warranty.
- There is a warranty policy schedule that clearly shows we provided one year of free cover, and the consumers purchased a second year, so they had two years’ cover in total.
- We therefore do not accept that we misled them about the amount of warranty left, or that the car came with breakdown cover.
- In relation to the interest rate on the PCP agreement, all of the financial documentation shows an interest rate of 9.4% being applied. This documentation has been signed, and further copies would have been sent to the consumers after the PCP agreement went live.
- As such, we believe the consumers were sufficiently informed about the interest rate before they agreed to buy the car.
The adjudication outcome:
- The Motor Ombudsman adjudicator reviewed the evidence, and was unable to find that the accredited business had breached the Motor Industry Code of Practice for Vehicle Sales.
- With the mileage discrepancy, whilst he accepted this could have an impact on the vehicle’s price, the consumers were aware of this issue before agreeing to the purchase – so if they were unhappy with the price they were paying, they should have raised this sooner.
- Considering it has been some years since the purchase, the adjudicator concluded the consumers were happy to pay the price at that time, and as that was the cost that had been agreed, it was not for the adjudicator to interfere, as this was a commercial transaction between two parties.
- Turning to the warranty and breakdown cover, the adjudicator reviewed the documents provided by the accredited business and found that they showed the consumers were supplied with two years’ worth of cover, one at the expense of the business, and one paid for by the customers.
- The adjudicator thought the documents were sufficiently clear, and therefore the consumers should have been aware of the duration of warranty cover available on the vehicle.
- Similarly, the PCP agreement and other financial documentation showed an interest rate of 9.4%, the total amount of interest that would be charged, and that the total amount of finance exceeded the price of the car.
- The adjudicator concluded that the customers ought reasonably to have been aware that interest would be applied to the PCP agreement before agreeing to its term.
- Consequently, the adjudicator was unable to uphold the complaint in favour of the consumers, and no award was made.
Conclusion:
- The consumers were unhappy with the outcome, but provided no new evidence in support of their position, meaning the case was closed.
