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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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I have voluntary terminated a car finance agreement having

Resolved Question:

I have voluntary terminated a car finance agreement having paid over 50% of the repayments. I have been hit with a mileage excess invoice as this has been applied retrospectively and therefore I am in excess, is there any legal grounds to challenge this.
Christopher Moyle
07525 461 042
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.

Alex Watts :

Hello my name is ***** ***** I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Do you accept you are in excess mileage please?

Customer:

Alex, on a retrospective basis, I am in excess, my milage is very erratic and my verbal understanding was that the 100,000 miles over four years would not be applied retrospectively, however there are vague clauses to this effect in the contract. I acknowledge it is not unreasonable, however is there any legal grounds for challenge, accepting my understanding of Voluntry termination is that it ends everything ? As a footnote, there was modest damage to the car when returned and I have happily settled this modest invoice

Alex Watts :

Could you provide the terms relating to mileage please?

Customer:

Excess Mileage


Annual Mileage Allowance : 25000 miles


Excess Mileage Charge for miles between 100 & 115% of the Annual Mileage Allowance : 8.25 pence per mile


Excess Mileage Charge for miles over 115% of the Annual Mileage Allowance : 12.38 pence per mile


The Excess Mileage Charge shown will be payable for each mile driven in excess of the Annual Mileage Allowance. This will be charged on expiry, or


the earlier ending of the Agreement, or where you request us to act as your agent to sell the Vehicle (see paragraph 14 of the Terms and Conditions).

Customer:

Alex, sorry copied and pasted above, four year agreement at 25,000 miles per annum

Customer:

Mileage at handback 28/4/14 (start date 2/12/11) totalled 94,315 miles.

Customer:

Alex, the clause of note is

Customer:

9.4 Excess Mileage Maintenance Charge


Where Optional Repair and Maintenance Service has been selected if the Annual Mileage Allowance is exceeded you will pay to us the Excess


network


Page 3 of 5 a LeasePlan Brand DW1 01.02.11


Ref: 2183 Version 3 (02/11)


Mileage Maintenance Charge in the amount stated in the Schedule in respect of each mile travelled in excess of the Annual Mileage Allowance


during each year and so in proportion for any less period than a year. Such Excess Mileage Maintenance Charge is payable at the end of the


Term or, if earlier, upon termination of this Agreement or the hiring howsoever arising together with any VAT at the then current rate.

Customer:

My question is : does voluntary termination (rights/law) negate such clauses. I have been advised by unqualified guidance that it does, however your opinion is key. I can send all the paperwork if required.

Alex Watts :

So you had it for 2 years and 5 months?

Customer: yes
Alex Watts :

So you could have done about 60,500 miles, but you did 94k?

Customer: yes
Alex Watts :

Ok - you are bound by the excess mileage clause as you probably know

Alex Watts :

This means that although you did 94k miles you could have done 60,500

Alex Watts :

Sadly therefore you have done 33,500 miles too many or there abouts

Alex Watts :

This figure is pro rata

Alex Watts :

Even though there has been voluntary termination you are still liable for this excess charge

Alex Watts :

This is because you signed a contract and agreed to it

Alex Watts :

Therefore the terms are binding

Alex Watts :

They can't change you for all miles only the pro rata exccess ones

Alex Watts :

I am sorry if this is not the answer you are after and certainly not the one I want to give you, but I have a duty to be honest

Alex Watts :

Can I clarify anything for you about this today please?

Customer: Alex, I understand all the above points and the maths, the question remains, are there grounds to challenge this ? My understanding is the statutory rights of voluntary termination negate retrospective charges. Could you check and confirm this point, as your have told me things I am currently aware of.
Alex Watts :

You may be slightly confused

Alex Watts :

1) The creditor can not charge you for ending the agreement, that is true

Alex Watts :

2) The creditor can charge you for any damage

Alex Watts :

3) The creditor is still able to charge for any breach of the agreement.

Alex Watts :

You agreed to do 25k miles a year, you did more

Alex Watts :

The creditor is entitled to charge for this

Alex Watts :

But he can't charge you for ending the agreement

Alex Watts :

Sadly you are liable for the excess mileage

Alex Watts :

Does this clarify?

Customer: I understand all the points, however is there a statutory precident that super weds this type of contract, I am a consumer not corporate entity. I have been told, that voluntary termination negates these points, is this th case
Customer: Supercedes
Alex Watts :

You have protection under the Consumer Credit Act 1974 that is true

Alex Watts :

And there were amendments made by the 2006 Act

Customer: Anything that helps this self circumstances ?
Alex Watts :

But the Act only applies to not allowing the creditor to charge you for termination etc

Alex Watts :

It does not prevent a creditor charging for breach of the agreement, which this is technically

Alex Watts :

You can negotiate the rate and amount charged, but there is still a breach because you agreed to do 25k miles and did not

Customer: Okay, so accepting this is not a termination charge but a retrospective charge, however if they sell the car and repay any finance, (and I don't know if they have) does that change anything.
Alex Watts :

The only thing you could potentially argue is that the term is unfair

Alex Watts :

The Unfair Terms in Consumer Contracts Regulations 1999

Alex Watts :

states:

Alex Watts :

5. (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.


(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

Customer: my current argument is that my mileage is erratic and it could sit doing low miles for the not few months, however. Need a stronger argument
Alex Watts :

That is your only point. But it may involve Court proceedings and it may not be a small claim if there is a legal argument.

Alex Watts :

That is the risk

Alex Watts :

Can I clarify anything for you about this?

Customer: In response to the Consumer points, I do have influence over the term at negotiation stage, so that doesn't help. What grounds if any do I have to argue/challenge the rates
Alex Watts : You can only argue if they are unreasonable and you have comparative rates available.
Alex Watts : Does that clarify?
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience: Solicitor with 5+ years experience
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