More and more frequently, cars are being brought on finance with Personal Contract Purchase (PCP) or Hire-Purchase Agreements. This creates complexity regarding who is responsible when things go wrong.
In this article, we summarise a recent decision that was seen as a victory for consumers and remind you of your rights when your vehicle is not of satisfactory quality.
Black Horse Limited v Andrew Curtis: A Victory for Consumer Rights
Last year, a practising solicitor, Mr Andrew Curtis, successfully appealed against a finance company regarding a refund on his hire-purchase of a defective Range Rover.
What is the background to the case?
The background to the case was that Mr Curtis (consumer) purchased a vehicle from Black Horse Limited (finance company). The consumer drove the vehicle, and it was not of satisfactory quality. The finance company admitted that the vehicle was defective and accepted that the consumer had a right to reject it.
However, issues arose when the finance company failed to collect the vehicle.
The finance company said it would collect the vehicle only when the consumer settled his claims on financial terms proposed by the finance company. The consumer refused to accept the sums proposed but said the car was ready for collection.
The finance company continued to refuse to collect the vehicle, so the consumer made clear he would continue to drive it.
What was the claim by the finance company?
The finance company issued proceedings for recovery of the vehicle. By this time, the consumer had added 40,000 miles to the vehicle's clock.
Initially, the trial judge held that section 24(9) of the Consumer Rights Act 2015 (which states no deduction to a final refund should be made where the trader failed to collect goods at an agreed time) did not apply. The trial judge held that there should be a deduction to the final refund because there was no agreed time for the finance company to collect it.
The trial judge held that the refund should be deducted for the consumer's use of the vehicle after the final rejection.
What were the grounds for the appeal by the consumer?
The consumer appealed the decision on two grounds:
- It was an error of law for the court to conclude that section 24(9) of the Consumer Rights Act 2015 does not apply in circumstances where the "failure to collect… at an agreed time" was the fault of the trader and
- It was perverse to conclude that the consumer failed to cooperate in returning the vehicle in circumstances where he was willing for it to be collected.
The appeal judge held that the consumer had rejected the vehicle, and no deduction for use should apply in this case. The judge held that because the finance company made no agreement to collect, which would have ended the charge for usage, no deduction to the refund should be made.
Summary
The decision in this case highlights the role of the Consumer Rights Act 2015, which protects consumers' interests.
What are the rights of consumers with faulty vehicles purchased on finance?
Below are answers to frequently asked questions about consumer rights and faulty vehicles purchased on finance.
Who is the legal owner of the car?
The finance company is the legal owner of the car until you have paid the full amount owed. You will be the registered keeper.
Can I get a refund?
Potentially. If you buy a faulty car on finance, you get the same rights as if you brought the car outright. You are protected by the Consumer Rights Act 2015 (CRA). Therefore, depending on when you identified the faults and how bad they are, you could be entitled to a refund.
Can I replace the car?
Potentially. As mentioned above, depending on when you identified the faults and how bad they are, you could be entitled to a repair or replacement according to the provisions under the Consumer Rights Act.
Can I complain about the conduct of the finance company?
Yes. If you have given the finance company the opportunity to remedy the faults with the car and they fail to put it right in a reasonable time, you may be able to complain to the Financial Ombudsman.
Bringing a complaint is free, and the Ombudsman could conclude that the finance company owes you compensation.
