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It’s the bain of anyone’s life who takes out a contract hire or PCP agreement and hands the car back to the finance provider at the end of the contract. Alloy wheel scuffs and scrapes are not considered fair wear and tear by the finance companies. Drivers have to get the damage repaired before the car is returned – very annoying. Especially as the repairs can be quite expensive.

If you are like me and you live with scuffed alloys until the end of the agreement you are unlikely to experience warranty problems, relating to the wheels, if you have them smart repaired just before the car is returned. However, Colin Green from Maidstone in Kent did have a problem. It was a corrosion problem with one of the wheels on his Mercedes. Mercedes agreed that there was a fault and replaced the faulty wheel.

Around the same time, Colin found that two of his wheels were scuffed so having taken advice from Mercedes Warranty Team he was advised to have the repair work carried out by a Mercedes Star Partner, someone they approved to carry out repairs to their standard. Which is what he did. A few months later Colin noticed that two of his wheels were now showing the same signs of corrosion that the first wheel showed. He contacted the dealer.

This time they refused to replace the two wheels after asking where he had the car serviced. Having been told that he could use a Star Partner he had the car serviced by a Star Partner service agent. They said that as he hadn’t had the repairs and the service carried out by a main dealer he invalidated his warranty.

As usual this is totally wrong but after Auto Express stepped in Mercedes replaced the corroded wheels FOC as a ‘gesture of goodwill.’ More like they were legally obliged to!! But a lesson to those who like their car looking pristine and have scuffed alloys repaired immediately after it happened. Make sure you don’t breach the terms of your warranty as future claims could be rejected. And so my fight against crooked dealers continues. By Graham Hill

When I read the latest changes to the way that leases would be accounted for in the books of large companies, being introduced by the International Accounting Standards Board (IASB), I started to get Deja Vu! You see when I first came across leasing (contract hire) I was General Manager in a PLC with over 700 vehicles in the fleet that we owned outright.

One of the departments that I was responsible for was Transport and the fleet of vehicles. They were costing us a fortune but more than that they were shown as assets on our balance sheet but the outstanding HP finance was shown as a liability. The net effect was negative. OK, technical bit over.

At the time, contract hire was only advantageous to large companies with cars that were covering big mileages. For most businesses, the off-balance sheet recording of contract hire has been an advantage because without the assets and liabilities being recorded it presents a stronger picture. It is also easier to simply record a monthly rental cost than applying the writing down process to owned assets.

Here’s where it gets interesting. After absolutely donkey’s years of negotiating the IASB has ruled that contract hired vehicles should, in future, be recorded ‘on balance-sheet’. BUT this rule will only apply to companies reporting under IASB rules, mainly those companies quoted on the London Stock Exchange.

All other companies operate under the UK Generally Accepted Principles (GAAP) which remains as is so the vast majority of firms will remain unaffected. However, as this situation could affect some of the biggest fleets in the country running thousands of vehicles the daily rental market has pricked its ears up.

Whilst January 2019 will see the new IASB rules on leasing come into force another standard, IAS 16 will come into force relating to rental vehicles where the rental period is up to a year. These will remain off-balance sheet for all companies.

As a result, the daily rental companies have got themselves excited because they receive massive discounts from manufacturers – up to 50% off the recommended On The Road price. Despite this discount, the reason why their rates are not lower than contract hire rates is utilisation – which can be as low as 40%.

This means that cars are sitting around costing money for longer periods than they are actually being hired. This pushes up rentals massively. However, if the cars are rented out on 12-month contracts the utilisation is 100% so they could reduce the monthly cost substantially from their daily rate bringing them closer to contract hire rates.

Clearly, if the rental companies brought out such a product specifically for the large fleets, as happened with contract hire, could we see a new product offered, not only to smaller businesses but also to consumers.

Plenty of discussion going on in the industry, both for and against, but with the uncertainty of Brexit a 12-month contract, priced sensibly, has some merit.  By Graham Hill

If you are a regular reader of my musings you will know that little brings my blood to the boil quicker than reading about the abuse of the law by dealers and even finance companies. The problem that many consumers have is that they don’t understand their rights. The 30-day rule, introduced as part of the Consumer Rights Act 2015, isn’t difficult to understand.

If the product, in this case, a car, is of unsatisfactory quality, unfit for purpose or not as described you have the right to reject the goods. The confusion comes when you finance the car on HP or PCP.

Too often the customer turns to the dealer in order to reject the car when in fact, legally, the rejection should be made to the finance provider. The fact that you negotiated the deal with the dealer is irrelevant. The dealer invoiced the car to the finance company. They have then financed THEIR car under contract to you.

In this instance, Auto Express reported a case whereby Jennifer Taylor of Darlington, County Durham took delivery of a Nissan Juke, financed by Nissan Finance. When she took delivery she noticed that the front and rear bumpers were a completely different shade of blue to the rest of the car.

So bad was the difference, first noticed by her dad, she could see the difference in shade from a hundred yards away. Within a couple of days, given the fault, she decided to reject the car. But instead of serving the rejection on the finance company she served it on the dealer.

The dealer carried out a test on the paint (strange given that the difference was easily visible). As a result, the dealer suggested that the bumpers needed a re-spray, costing £954. But they weren’t clear as to who would pay for the respray. As a result, Jennifer sent photos to Nissan head office.

The dealer immediately offered to respray the bumpers free of charge. But technicians warned that they might not guarantee a perfect paint match. Besides that, as Jennifer said, ‘I paid for a brand new car, not a resprayed one.’ Jennifer finally contacted Nissan Finance, explaining that she wanted to reject the car.

After 8 weeks of investigation, Nissan Finance wrote to Jennifer explaining that they still hadn’t come to a decision. When Auto Express finally got involved Nissan Finance, who clearly had done nothing, said that they were in the process of having the vehicle inspected by one of their Field Technical Engineers. They said to Auto Express, ‘If they identify a manufacturing defect with the bodywork, we will work with the customer to ensure a satisfactory solution.’

Can you sense it? Blood is boiling. Firstly a rejection is a rejection. Not an offer to repair the fault. The supplier, in this case, Nissan Finance, has one opportunity to put the problem right – only if you agree to it. Jennifer has rejected the car so a quick inspection should have been carried out which would have obviously shown that there was a colour difference. Rejection accepted!

What has a ‘manufacturing defect’ got to do with anything? That’s for the manufacturer to identify and correct if they need to change their procedures, nothing to do with the car rejection. This whole situation is getting out of control.

When the rejection was rejected the customer should have immediately contacted her local trading standards office and the Financial Ombudsman and made a formal complaint. It’s an example of a dealer and their linked finance provider sticking two fingers up to your legal rights.

My advice to all is to take out legal cover when you take out your car insurance and make sure that you are covered for such circumstances. A couple of letters from lawyers will soon sort things out! By Graham Hill

A study into the use of mobile speed cameras has found that 20 forces across the UK are now using speed cameras for other purposes. They have found that the quality of the photos taken by the latest equipment is now so good that, even at speed, it can capture the driver and detect whether he or she has a seatbelt on or is holding a mobile phone.

Whilst this is a good move towards safer roads Sarah Sillars, chief executive of IAM RoadSmart, was reported by AutoExpress as saying, ‘What we need are clear and consistent guidelines on what the cameras are being used for.’

I agree that we should be aware that police and local authority cameras can be used to determine whether you are breaking the law. Knowing that local authority town centre cameras can be used to convict those causing criminal damage, or worse, acts as a deterrent. In the same way, knowing that police mobile cameras could be used to catch those not wearing seatbelts or using a mobile phone, would also act as a deterrent as well as provide evidence for prosecutions. The move has to be welcomed given the fact that there are so few police on our roads. By Graham Hill

The AA has carried out a survey amongst drivers and found that two-thirds felt that they could get away with careless driving due to a lack of traffic police. Researchers asked over 19,500 drivers a variety of questions about driving offences. In response to the questions, 65% said that they felt that they were unlikely to be caught or punished for tailgating or hogging the middle lane of a motorway. 55% said they felt they would get away with driving a car in a dangerous or defective condition.

49% felt that they would get away with not wearing a seatbelt and 44% felt that they would escape prosecution for jumping a red light. When asked about visibility of traffic police, 65% felt there was no visible presence on local roads compared to 43% suggesting no visible presence on motorways.

The drivers were next asked if they thought cameras alone could do the job of detecting careless driving instead of physical police. 71% believed that they couldn’t but only 45% believed that greater powers should be given to Highways England traffic officers when it comes to enforcement.

AA President Edmund King commented on their findings by expressing concern that a lack of officers on the roads meant that drivers felt they could get away with careless driving and other serious motoring offences.

Whilst using a mobile phone when driving is one of the most dangerous offences more than half felt they could get away with it without fear of being caught. This is causing concern to both the AA and the Government who are keen to stamp it out.

In summary, the report has revealed that drivers are taking less notice of the law as a result of fewer cops in cars patrolling our roads and motorways. Whilst everyone agrees that cameras can act as deterrents something more needs to be done to prevent accidents and serious or fatal injuries. The only solution – get more cops in cars. By Graham Hill

Following complaints and serious concerns expressed by drivers on Smart Motorways the Highways Agency has had a rethink and decided to place refuge areas, wherever practical, at distances of 1 mile and not 1.5 miles as is the case at the moment.

They will also extend a system, currently in operation, that automatically detects broken down vehicles in live lanes. Highways England will also install more refuge areas in locations  ‘with the highest levels of potential live lane stops’ and paint them orange to increase driver confidence.’ That’ll work then, nothing like a lick of orange paint to increase confidence eh!

Clearly something had to be done following a survey carried out by the AA that found 80% of respondents saying that they felt that smart motorways are more dangerous than traditional motorways. The automated breakdown detection system will be rolled out to all smart motorways across the country following a successful trial on the M25.

Smart motorways are now being accepted more but Highways England have found motorists still using lanes that have been blocked off with a red X signal. Whilst they have not been charging motorists for breaking the rules to date, in future they will incur fines as well as penalty points, due to begin this year – you have been warned. By Graham Hill

According to What Car these are the top ten reasons why drivers call out breakdown services (in 2016)

1. Battery (433,964)
2. Puncture (328,863)
3. Alternator (65,118)
4. Engine (63,870)
5. Clutch (57,153)
6. Starter Motor (48,910)
7. Engine Control Unit (34,756)
8. Ignition Coil (29,287)
9. Gearbox (20,789)
10. Contaminated Diesel (19,711)

Very few of the above can be fixed at the side of the road so you would need to make sure that the cover you have is sufficient. Most new car policies that come with the car for either the first year or sometimes 3 years plus will be quite a good cover but some may only recover you to the nearest garage if you breakdown so check that. On the other hand your car insurance may cover you for a hire car so no need to include it in the breakdown policy.

Check the policies to make sure that you are sufficiently covered. Some policies will cover you in any car in which you are travelling so make sure that you are aware in case a friend’s or relative’s car breaks down and they don’t have a membership of a breakdown service whilst you are in the car.

Oh and make sure you have the number of the breakdown service in your phone, you don’t want to be fumbling about for the number when you break down in the middle of the night. By Graham Hill

According to Cap HPI, one in 16 cars on our roads has been clocked, i.e. had their mileage adjusted. The number of instances of clocking has increased by 25% over the last 3 years with over 40% of dealers having bought a second-hand car that they later found to be clocked. Cap HPI have estimated that an average family car can increase in value between £2,000 and £4,000 after wiping off 60,000 miles from the mileage reading.

The RAC agreed with the Cap HPI findings saying, ‘Our vehicle check data shows that discrepancies with MOT recorded mileages are on the increase for vehicles more than 3 years old.’ The cost of clocking to buyers has been estimated to be £800 million with an estimated 5 million cars showing incorrect mileages.

Years ago someone would climb underneath the car, attach a drill bit to the speedo cable and run the mileage forward till the desired mileage was reached after starting again from zero. Or someone would remove the speedo and with a screwdriver fiddle about with the counters but that often left telltale scratches on the dial and the counters. Not that I ever did anything like that.

It was as wrong then as it is now. But not illegal as long as you told the new owner that the mileage has been adjusted – yeah right. The trouble is these days mileages can be adjusted with a laptop and connector within a few minutes. There are companies out there who will ‘adjust your mileage’ for £100. Frankly, it’s a disgrace.

As always the press has turned on those taking out PCP agreements who realise how much the excess mileage bill will be at the end of the agreement and decide that it would be cheaper to adjust the speedo reading. As a result, it has been suggested by the press, that 3-year-old car are being returned to the leasing companies with an adjusted mileage. Of course years ago the only reason why cars were clocked was to increase value. These days it is suggested that it’s because drivers are trying to avoid excess mileage charges.

The fact is that years ago we had no warning lights in the cockpit. We either had the car serviced whenever we reached the service mileage or at the end of the year, whichever came sooner. Or, as was the case with this struggling accountant, we waited till we heard a crunching noise from the brakes, clutch, suspension etc. and got them replaced. So whilst we were being conned out our hard earned money by the clockers they weren’t putting lives at quite so much risk as those clocking these days.

As I’ve mentioned before, many of the safety systems in modern cars are triggered by the mileage on the car when repairs or replacements are necessary. So if a driver has had the mileage changed on a modern car he or she could be putting theirs and other’s lives at risk by throwing out all the safety alert systems that rely on mileage.

So if you are considering clocking – don’t! And if you are buying a used car check the service history for dates and mileages, look carefully at the condition, worn carpets on a low mileage car is always a giveaway. Test drive the car and ask the seller questions if you have concerns. Don’t get caught out by a dealer who puts a caveat into his sales agreement that states that the mileage isn’t verified.

Another trick of the trade is to show one mileage on the car when you test drive then adjust it back to the original true mileage when you collect it so that they can’t be prosecuted for selling you a car showing an incorrect mileage.

The crazy situation is that clocking can put lives at risk. I, like others feel that the Government should make the selling of the equipment that they use to adjust mileages online illegal and the clocking of cars by anyone other than a registered garage, who only does so after a fault is repaired, to be made completely illegal. As usual our laws are not fit for purpose. By Graham Hill

When a used car dealer buys a car he either buys it at auction, takes it in part exchange or buys it from one of many other sources. As a registered trader he simply advises the DVLA that he is now the owner and has the car up for sale. Thus avoiding another owner in the log book (V5C). All good so far.

As a result of this he must keep the car off the road and when driven on the public highway he needs trade plates. The trade plates identify the dealer and also prove that he has Trader Insurance. As a result he can use the car for his own trips but predominantly the trade plates are used when a customer takes the car for a test drive.

A little like having fully comp insurance with the ‘any driver’ clause. But, unlike a domestic policy that generally only covers other drivers for Third Party Only the trader policy covers all drivers fully comp.

Now here’s the thing, a firm of lawyers has found that under the Road Vehicle (Registration & Licencing) Regulations 2002 a dealer who has held a car in stock for more than 3 months i.e. the three months period of grace, he or the company must register the car in their name (PART 4, Regulation 24).

This means, according to the lawyers who picked this up, that the dealer can no longer use the trade plates on the car once registered in their name, they must tax the car and insure it independently. It could also have a more sinister consequence.

Once the car has been owned for more than 3 months as a ‘stock car’ very few dealers are aware that they must buy the car so continue to take potential buyers out on test drives using their trade plates. As the DVLA would consider that the car was illegally on the road, after the 3 months period, unless registered, it could render the traders insurance void.

So you could be on a test drive, have an accident, and either be uninsured, or if you have fully comp on your own car, your own insurance may take over. However, you will only be covered for possibly third party with potentially a massive excess to pay.

Worse still I understand that many fully comp policies no longer include any cover at all when driving any car other than your own unless requested at the time of taking out the policy.

With over 8 million used cars changing hands each year there must be many car dealers carrying stock over 3 months old. Ask the question when you go for a test drive. By Graham Hill

I read an interesting story about a car crash that happened whilst a car was being driven by a car mechanic. A firm of lawyers was using the story as a case history of what can go wrong when evidence is lost or disposed of. Basically the driver, taking the car on a test drive, had an accident that not only injured him but also several other innocent motorists.

A forensic investigation took place following a police interview with the driver who could recall nothing of the accident. Evidence collected at the scene and an investigation of the wreck showed that the most likely cause of the loss of control was a deflated rear tyre.

However, at this critical point of the investigation, as it was several weeks after the crash took place, the suspect wheel had been thrown away. It was devastating for the driver as the lawyers needed the tyre to be able to prove whether the loss of control was, in fact, the tyre or  whether it was down to driver competence, his input and/or that of those who serviced the car?

Without the tyre they couldn’t tell whether the deflation was the cause or result of the crash. Did the sidewall collapse or did it have a puncture? Without this vital evidence the mechanic was found guilty of causing the accident – seen as unjust by the lawyers as the mechanic suffered and the garage saw its insurance sky rocket, all because a vital part of the car wasn’t kept.

The important message here is never destroy evidence. Which got me thinking. At the end of a contract you often find that a service is due. Some cars tell you on a ‘condition based counter’. This means that the service is due based on the way that you drive the car, time and mileage. On the other hand it could be an annual service per the manufacturer’s recommendations.

As most lease cars are registered a day or two before the car is delivered the service becomes due a day or two before the car is due back. Read the contract but the chances are that you will have to get the car serviced.

It’s a pain in the neck for you but a profit opportunity for the garage to charge for repairs/replacements that aren’t necessary. Typically they will tell you that you need fluid changes or replacement brake pads, even though warning lights haven’t come on.

On one occasion I still had a month to go and my brake warning light came on so I popped in to a garage for a new set of pads. Whilst they were carrying out the work the service manager came out and told me that the discs needed changing as well. I asked if they were illegal and as soon as he said no I told him to leave them. Worse still if I’d said change them and they invoiced me without doing anything. Which is my next point.

Some main dealers and garages take a video of the work they carry out which you can watch in real time on your phone or tablet or have it sent to you after the service/repair has been completed. If they don’t video make sure you ask for the replaced parts to be put into a box and placed in your boot.

If you feel that the item didn’t need to be replaced have it checked and be prepared to challenge the dealer if your expert says the work didn’t need to be done. It seems Trading Standards are getting more pro-active. By Graham Hill