How Best To Use The Law To Resolve A Dispute With A Dealer

Friday, 22. April 2016

Hi, Graham Hill here, thank you so much for visiting my blog, I hope you learn a lot and as a result end up driving a great car. In order to do so you can get all the information you need by buying my book, An Insider Guide To Car Finance or use me to finance your next car. Happy driving.

If you are a regular reader of my posts you will know what section 75 of the Consumer Credit Act is and the way that it makes the finance company jointly and severally liable in the event that you have a ‘fit for purpose’, ‘miss-representation’ or any other breach of contract claim against the dealer.

The general perception is that first and foremost the dealer is responsible so you immediately take up the problem with the dealer which invariably gets you into a bit of a dispute. However, I am reading about more and more cases whereby the customer has immediately taken up the case with the finance company, which tends to take the side of the customer and roll over, somewhat quicker and easier than the dealer, leaving a very happy client and the finance company to battle out the recovery of any money they have spent from the dealer – not your problem.

In fact it is often the case that before making finance available to a dealer he must sign up to an agreement that simply says that in a dispute with a customer that the funder settles, the dealer is responsible to refund the cost. The agreement, in my opinion, shouldn’t be needed as it is covered off in sub-section 2 of section 75 of the act, as follows:

75 Liability of creditor for breaches by supplier.

(1)If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

(2)Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

The fact is that if you have taken out finance on a car, usually HP or PCP, and you feel that you have a claim against the dealer I would suggest that you challenge the finance company and if they ask you if you have already taken up the case with the dealer, point them in the direction of the Consumer Credit Act 1974, section 75.

As an aside I asked a lawyer friend of mine in the industry why the lender is more likely to roll over and he explained that if you took up the case against the dealer your recourse would be via the fairly wet fish Trading Standards but if you escalate a claim against a lender your recourse would be via the gritty Financial Ombudsman Service and if they investigate a claim they immediately charge £550 per claim investigation (in fact I believe they are allowed 25 claim investigations before they incur a charge). So there you have it. By Graham Hill

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Law Firms Advising Car Dealers To Act Illegally

Sunday, 20. September 2015

As the 1st October gets closer, the date when the Consumer Rights Act 2015 comes into force, I see a lot of activity between law firms and car dealers to ensure that dealers are prepared for the changes and potential costs as the consumer’s position is strengthened.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

What the lawyers don’t realise is that I have my spies all over the place and one thing that always gets my back up is when it is revealed to me that lawyers play on consumer’s ignorance to avoid the law and protect their dealer customers. Of course I, in turn, feel it is my duty to reveal this disgusting behaviour.

Consumers are on fairly solid ground if a seller of any goods tries to contract you out of your statutory rights, which seems to be what lawyers suggest car dealers do to protect themselves. The Unfair Terms In Consumer Contracts Act 1999 and the Unfair Contract Terms Act 1977 have both been incorporated into the new Consumer Rights Act and protect the consumer if the car dealer gets you to sign an agreement that either imposes unfair conditions on you or attempts to opt you out of your statutory rights.
The problem is that most consumers don’t know their legal rights so when a lawyer enters terms into a dealer client’s Contract of Sale many consumers believe they are stuck with them – but they aren’t. The latest con relates to the confusion that has existed for years around the purchase of a used car that is faulty. You take it back and the dealer, under the old rules, has the right to repair it, but it still has the fault. He tries again, still no joy and so it goes on.
You still had the right to reject the goods but if the contract, that you signed, says you haven’t, where do you stand? The good news is that the law has been toughened up and all consumers now have the right to reject a car within 30 days of purchase if it is faulty or not fit for purpose. No questions – it is the law. Well it will be on the 1st October.
The law also states that a refund should be given ‘without undue delay, and in any event within 14 days beginning with the day on which the trader agrees that the consumer is entitled to a refund.’ OK, now whilst I may have a little sympathy with the dealer this can only be done if the vehicle is faulty or not fit for purpose, in other words if the car has, for example, a knocking gearbox as you drive the car down the road a few days after purchase, or if the dealer says you can tow your luxury caravan without a problem only to find that the towing capacity is not high enough, so not fit for purpose.
The problem for the dealer is that he needs to give a refund within 14 days but he also needs to send the log book off and get it returned by the DVLA so that he can sell it again and this can take several weeks. So one particular law firm suggests to dealers to include in their terms and conditions or on their sales invoice a term that says that the customer is not entitled to a refund until they have received back the logbook from the DVLA.
According to this law firm it will ease the pressure of having to give a refund until they have possession of the logbook from the DVLA. They even go so far as to say that this would avoid having to give a refund until 14 days after the logbook has been returned from the DVLA. So let me get this straight as to what these assholes (the beauty of having control over content means I can say what I want) are suggesting. A dad or maybe young mum, who has sold their old car and collected their new car, now finds that the car they bought has a fault.
They exercise their legal right to return the goods and demand a refund but these despicable lawyers are suggesting that the dealer points to a term in his Sales Contract that says that they don’t need to give a refund until the logbook has been returned by the DVLA. Who is to say when it is received back, they could hang this out for weeks? But worse is that what they are suggesting is, in  my opinion, illegal and certainly immoral.
The innocent customer is now without a car for weeks through no fault of his own when the people at fault, the dealer, is sitting on the customer’s money. Shame on these lawyers. In another piece of worrying advice they are fiddling with the distance selling rules. Let me explain. Lets say you see an advert on a dealer’s website or advertised online or in a magazine/paper and you call the dealer to find out more.
You like the look or sound of the car but need to travel to see it so you give a holding deposit over the phone to hold the car till you can get there. If you don’t like the car, no problems you are entitled to your money back. But let’s say you get there and like the car and pay the balance to own it. That my friend is still a distance sale which means you have 14 days to return it and get your money back, no ifs, no buts.
Not only that but there are rules and regulations that apply to the placing of adverts such as a proper description of the goods, information on their trading premises, address and phone number etc. If the dealer omits anything from his advert it can give consumer customers up to a year to cancel, not just 14 days. But getting back to the normal position, the indisputable rule says that if a car dealer takes a deposit over the phone or online at a distance BEFORE the customer has physically seen the car the sale is considered to be a distance sale.
The only exception to this relates to goods that have been customised or tailor made. The worrying thing for the car dealer is that a consumer, following a distance purchase has 14 days to reject the goods, he then has 14 days to expect the refund but has a further 14 days to return the goods after cancellation.  As I always say to people make sure that you take out legal cover when you take out car insurance, it will pay for itself many times over if you ever find yourself at the receiving end of any of the above. Graham Hill

 

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Graham Hill Warns About The New Financial Conduct Authority

Monday, 3. February 2014

We are getting close to the day when the new Financial Conduct Authority (FCA) takes over from the Office of Fair Trading (OFT) and launches its new guidelines to the finance industry. The new rules will affect all parties involved in ‘consumer’ finance. At one end of the spectrum the new rules will affect consumers as well as non limited SME’s such as sole traders and small partnerships, in the same way as the Consumer Credit Act covers these entities at present.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

The rules will also affect every provider of ‘consumer’ finance. In the motor trade that will include the finance organisations as well as dealers, brokers and introducers such as accountants and IFA’s, all will be affected by the new rules which will come into force from the beginning of April 2014.

For those currently providing advice they should have applied and paid for ‘Interim Permission’ that keeps their Consumer Credit Licence active whilst the changes are introduced. If, whoever you are dealing with, doesn’t have interim permission they are trading outside the law. The problem is that we don’t yet know exactly what the rules will be, making it impossible to prepare for them.

One thing is for certain, we will have much stronger controls imposed upon applicants for finance to prove that they can afford the repayments. This raises two issues, the first goes to the core of the credit industry which is down to the judgement of the underwriter. The word affordability is used in the proposed regulations but what does it mean.

We are told that applicants will have to provide some form of affordability proof. This is likely to be an income and expenditure statement. But if you take a person who can demonstrate income of £1,000 per month with expenditure of £1,001,including his vehicle costs, does this mean that he fails the affordability test?

He is hardly likely to pop to the pub for a pint if it means he can’t afford the repayment on his car which he needs to get to work in the first place to earn his £1,000 per month. So it will be interesting to see how this pans out and what additional pressures are placed on those providing and wanting finance.

It is a bizarre situation when someone else has to tell me if I can afford a repayment on a car or not. Personally I would die of starvation before I would give up my car through non payment of the monthly lease. Which brings us to the next point. After carrying out a more substantial test on applicants for finance it is reasonable to assume that far fewer applicants will receive credit approval, otherwise what would be the purpose of the massive investment and the changes to legislation?

So let’s think about that. I have a client who applies for finance on a Ford Fiesta at a prime rate of £150 + VAT per month. Unfortunately he fails the affordability test so he is now forced to go down the path of sub prime lenders. The current rate is around £295 + VAT per month for the same car.

But the sub prime lender must surely apply the same affordability test or is it a little less stringent – in which case it defeats the objectives of making sure the client can afford to make the repayments in the first place. By making sure he isn’t offered finance at £150 per month how on earth is he likely to be able to make payments at twice the rate?

The whole thing is starting to look like a farce but very worrying at the same time. The only advice I would give at this stage is that if you are looking to change your car this year do it before April you could give yourself an awfiul lot of work and be badly disappointed! Watch this space. By Graham Hill

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Isn’t It About Time That Blogs Were Regulated?

Wednesday, 8. January 2014

New moan started, a few years ago a journalist with about as much knowledge about all things financial as a garden fork started a blog. In fact it was started about the same time as I started mine.

The difference was that I didn’t allow every John Henry and his mate to post things on my blog, unlike my charismatic friend. If anyone wanted to post anything on my blog I would mediate and if what they wanted to post was incorrect or simply trying to sell their pet insurance policy I would trash it.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

On the other hand many other blogs would allow complete (but often well intentioned) doughnuts to express opinions online which others would then take as absolute gospel. For example I have seen someone desperate because they are facing a £1,500 charge to repair a PAS pump, 3 weeks after the manufacturer’s warranty has run out on his car, seeking advice because he’d been told the repair was outside the warranty and therefore fully chargeable.

As you know from postings on my blog this isn’t unusual. In this case the car had only covered 15,000 miles but some numbnuts said, oh dear, sadly as you are outside the warranty there is nothing you can do, chat to your bank manager and arrange a loan. Which is what the poor sod did!! So this ill informed do-gooder just cost the driver with the problem £1,500.

The truth is that under the Sale of Goods Act the driver had a legitimate claim against the supplying dealer as the goods have to be as described, fit for purpose and of satisfactory quality. The ABS pump should last as long as the car, at least 8 years, so the dealer should make at least some contribution towards the cost of repair as the item concerned would appear to not be of satisfactory quality.

Oh and notice I said dealer and not manufacturer, the claim is against the company that sold you the goods, not the manufacturer. It’s up to the dealer to seek compensation from the manufacturer. This is just one of many pieces of advice given by ignorant subscribers with no legal knowledge whatsoever.

Sometimes on this and other blogs the advice has been accurate at the time it was given in say 2009 but the law has since changed and the advice is now wrong. So if you are one of those people that searches through blogs for accurate information, tread very carefully, the advice you follow could cost you a fortune.

It’s about time that blogs were properly policed before too many people catch a serious cold. 2nd moan over! By Graham Hill

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Silly Surveys, Fuel Price Increase, Swinton Miss-selling & Congestion Charges

Monday, 19. August 2013

Bits&Pieces: I think most of my readers know my feelings about statistics, most of them leave me scratching my head thinking – so what? Someone, whoever decided to carry out the survey, needs to get a life.

Thinking of a change but unsure as to the best way to finance your car? Then you need a copy of my car finance book, Car Finance – A Simple Guide by Graham Hill. Click on the link below to buy the best car finance book on the market, available as a Kindle Book and Paper Back.

For example did you know that Seat drivers are most likely to make an ‘at fault’ insurance claim? Really??? Oh there’s more, Kia and Mini owners were next most likely to claim with Subaru, Smart and Fiat owners putting in the least claims.

Astonishing or what? So who carried out this totally pointless survey? Money Supermarket that’s who. Totally bloody pointless – Money Supermarket – get a life!

The AA has warned that fuel prices are set to rise by 5p per litre over the summer months. Apparently petrol stations have already started to pass on higher wholesale prices to customers at the pumps.

They said that costs had already increased by 1p per litre in July – not at my bloody Tesco, more like 3p!

Who do you use to insure your car? Think twice about Swinton as they were fined £7.4 million for miss-selling policies between April 2010 and April 2012. They were found guilty of using an ‘aggressive sales strategy’  over the phone and failed to tell customers that some of the add-ons were optional extras.

I can see that it won’t be long before we start to see congestion charges in all towns and cities. Cambridge, who dropped the proposal for a congestion charge 3 years ago, are now considering this as an option to reduce traffic gridlock. Before going ahead they will need to convince local businesses.

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The Truth About 0% Finance

Thursday, 15. September 2011

With many 0% finance deals about, following the new registration launch, it is important to take note of the advice that I have given in my books and previous blog posts. That is to negotiate a deal on the car on which 0% finance is being offered as though you are a cash buyer. Get some extra discount on the car, a full fuel tank and maybe a few extras Read more

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Laws Relating To Clocking Should Be Changed

Thursday, 19. May 2011

I reported recently on clocking, it would seem that others are reading my blogs as the Office of Fair Trading has issued a report that reveals there are more than 50 firms in the UK selling mileage correction (clocking) services. As a result they have called on the Government to act and close the loophole that enables these companies to quite legally reset a Read more

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Advertising Your Used Car Safely

Wednesday, 20. April 2011

I’m actually in a state of shock – ish! Whilst thumbing through the advice pages of Autoexpress I noticed that someone had asked the question, should you blur out the car’s registration number when advertising your car online? Now this is something I’ve had an issue with for sometime. It seems quite obvious that you should blur out the number to me Read more

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Why The EU Consumer Credit Directive Is Pathetic!

Wednesday, 23. February 2011

It’s been a busy week this week, I attended a round table discussion hosted by Motor Finance, the journal of the industry and one for which I have written a regular column for many years. This was followed by the annual dinner of the Finance and Leasing Association (FLA), attended by 1400 guests, all movers and shakers in the finance and leasing industry. Recession – what recession? Anyway, going back to the round table, one of the main items on the agenda was the new EU Consumer Credit Read more

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BVRLA Warns Of Lease Crooks

Monday, 17. January 2011

After years of warnings in my newsletter and on my blog the British Vehicle Rental and Leasing Association (BVRLA) has acknowledged that there are crooks offering leasing online who con consumers and small businesses out of money. I have had countless letters and emails over the years from those that have leased vehicles saying that they have lost money by trusting online leasing providers who had great web sites and extremely friendly and helpful phone support. They certainly Read more

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