The consumer’s issue:
“I purchased a brand new luxury 4×4 from a dealership in March 2020, but the vehicle subsequently suffered from several faults, including my children and I being locked out of the car, and the driver’s electric window not working. Eventually, the vehicle did not start, which resulted in a diagnosis of the engine needing to be changed.
Based on the issues I had encountered, the business agreed to a rejection of the car in January 2022, but deducted £5,198 for mileage during my period of ownership. I don’t think this is fair, because I have had to visit the dealership seven to eight times for the problems to be investigated, and the business is 17 miles away from where I live. They also kept the vehicle and used it for a week to see if they had fixed the problems, with the car being driven to another garage for work to be done on it.
Therefore, as a resolution to my complaint, I am looking for the dealership to refund the total sum (i.e. over £20,000) due to me without the mileage deduction.”
The accredited business’ response:
- It is correct that the vehicle had numerous faults, and the diagnosis revealing the need for a new engine was done in December 2021, which was 21 months outside the usual rejection period.
- The finance company took the decision to refund the consumer in January 2022, even though they were not legally required to do so. Therefore, the consumer was charged £5,175 for use of the vehicle and wear and tear, during their ownership of the vehicle where they covered 11,500 miles.
- It should be stated that ,although the customer did have a major issue, at no point were they left stranded or without a vehicle. They were therefore refunded all of their finance payments (£7,352.68), their deposit of £20,000, statutory interest of £4,166, plus a distress payment of £255 – the total sum of £31,773.68.
- It is therefore in our view not fair that the consumer should request a refund of the mileage and wear and tear deductions, as they had use of the vehicle for 20 months, with courtesy cars also being provided when repairs were being carried out.
- Finally, we would like to add that the finance company are the entity that took the deduction from the consumer, as we refunded the total amounts back to them.
The adjudication outcome:
- The Motor Ombudsman adjudicator reviewed the evidence provided by both sides, which mainly consisted of an account of events, correspondence between both parties, sales and handover documents, invoices, as well as photos and final response documents from the finance company.
- The adjudicator highlighted that there was an agreement between both parties that faults had occurred.
- While it could not be determined whether the vehicle had been of unsatisfactory quality from the point of sale, the finance company had agreed to a rejection of the vehicle by the consumer. Despite there being no entitlement to a full refund rejection outside the first six months, this was provided by the dealership to the finance company.
- The adjudicator highlighted that it was the finance company which then deducted for use from the full refund provided, before returning the remaining sum to the consumer.
- The adjudicator then set out that, in line with the Consumer Rights Act 2015, a business has a right to make deductions for usage. The adjudicator set out the specific sections of the Act that pertain to this, and applied them accordingly.
- The adjudicator also pointed out that, whilst the finance company took money off the refund for mileage use, a goodwill payment for distress had already been awarded as part of the refunded amount, meaning the consumer still received more than they were entitled to.
- As a result, the adjudicator did not find there to be a breach by the business of the Vehicle Sales Code, and made the decision to not uphold the case.
- The consumer was further advised that the finance company was accredited to the Financial Ombudsman Service (FOS). This would be the next point of escalation, as was highlighted to the consumer, as the finance company was not accredited to The Motor Ombudsman. This meant that any further action would be out of The Motor Ombudsman’s remit.
Conclusion
- The case was closed following no further response by either party after an allocated period of time.
