The consumer’s issue:
“In April 2018, I purchased a four-year-old used sports car, with 45,000 miles on the clock. At the same time, I bought a 24-month extended warranty to cover me if anything went wrong. Around 18 months later, the gearbox failed, so I asked the dealership to repair the car under the warranty. However, they declined the request because I had driven more than the maximum annual mileage allowed under the warranty’s terms and conditions i.e. a total of 14,000.
Since I have travelled less than 14,000 miles this year, the fault should be covered under the warranty. However, the business is saying that the maximum annual mileage is calculated on a pro-rata basis based on how many years of cover are purchased, so I’ve gone beyond the maximum limit. As I have a 24-month policy, I’m actually only permitted to drive 7,000 miles a year.
This means that the business either sold me a faulty car or they mis-sold the warranty to me, as I drive more miles annually than is allowed under the policy. To resolve the issue, I am looking for the business to repair the car, or to provide a full refund of £2,250 for mis-selling the warranty.”
The accredited business’ response:
- The documents for the sale of the vehicle and the warranty agreement show that the annual mileage of 14,000 miles should be calculated on a pro-rata basis, so if the warranty policy is for two years, as in this case, the maximum mileage that can be driven per annum is 7,000 miles.
- As the consumer exceeded this, we explained that the warranty would not cover the fault, and that they should be liable for covering the cost of the repair.
The adjudication outcome:
- The Motor Ombudsman adjudicator stated that the business has an obligation to ensure that the car is of a satisfactory quality at the point of sale and that the full terms of the warranty are provided to the customer at this time.
- In this case, they did not find that the business sold the consumer a vehicle with a faulty gearbox. Therefore, they did not have an obligation to repair it under the Consumer Rights Act 2015.
- However, the adjudicator found that the terms and conditions of the warranty did not state that the annual mileage limit would be calculated on a pro-rata basis.
- As such, the business was found to have misled the customer about the coverage of the warranty, a breach of The Motor Ombudsman’s Motor Industry Code of Practice for Vehicle Sales.
- To resolve the dispute, the adjudicator directed the business to provide a £2,250 refund to the customer for the cost of the warranty agreement.
- Additionally, the business was directed to amend the terms and conditions of its warranty policy, so as to inform future customers that the annual mileage limit would be calculated on a pro-rata basis.
- As a result, the complaint was partially upheld by The Motor Ombudsman in favour of the consumer.
- Both parties agreed with the adjudication outcome, and the business agreed to pay the consumer £400 as recommended by the adjudicator, thereby closing the case.