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

Your Rights When Paying A Car Deposit By Graham Hill

Friday, 4. March 2016

When people hear about me and leasing a little late in the day. It is often the case that someone goes into a dealer, test drives a new or used car, negotiates a deal and pays a deposit, often much more than he or she needs to.put down.
They then find out, after contacting me, that there is an amazing deal on a new car that makes the cost cheaper than the used car or by choosing a different finance method can save a lot of money on the same new car supplied through me. As a result he wants to cancel his order with the dealer. Now legally this is a breach of contract but the good news is that the dealer can only legally recover his costs which must be ‘reasonable’.
So if you have paid £1,000 deposit and you cancel the order he has no right to keep the £1,000. He may be entitled to a few pounds admin costs and maybe a few pounds to re-advertise the car but that’s it, he must refund the balance. If he carries out a service and MOT at your request he may also recover those costs but even that is debatable because both add value to the car when he re-advertises.
My advice is pay as little as possible, say £100, and pay by credit card, it increases your legal rights phenomenally, even more so if you end up buying the car, especially if you pay the balance in cash. And if a dealer tries to keep your deposit get straight on the phone to your local trading standards office. By Graham Hill