The Best Car Finance Blog In The World

I read loads of motor magazines and just about every week, in at least one, I read complaints from drivers who have had a warranty claim turned down. The motor magazines try to help out, usually by contacting the dealer, manufacturer or warranty provider. Some warranty providers, realising that they are acting illegally, offer to settle the claim ‘as a gesture of goodwill’, which normally infuriates me because it isn’t a gesture of goodwill it’s a legal obligation.

That aside the advice from the dealer goes nowhere near far enough. Once they have challenged the warranty provider, and in the latest case I’ve seen, that is the RAC, and they refuse to settle the claim it seems to be game over. In the latest story, the buyer of a Mini took out a warranty on his 2010 Cooper D bought from an RAC approved dealer. 10 months later the timing chain snapped and caused serious damage to the engine.

The cost of a replacement engine varied between £4,000 and £7,000 which the driver assumed would be covered by his RAC Platinum Warranty but they rejected the claim arguing that the timing chain had reached the end of its ‘normal working life’. As a result of Auto Express’s intervention RAC warranties sent out an RAC engineer to inspect the car.

Unsurprisingly the engineer claimed that the driver should have noticed the problems with the chain prior to it snapping due to a ‘rattling type noise from the timing chain area of the engine’. The report also argued that ‘reasonable steps have not been taken to mitigate the loss’. The driver argued that he hadn’t heard any rattle or noise from the engine prior to the chain failure. The driver also explained that the car had been serviced twice since he bought the car so it had been properly maintained.

Despite the intervention of Auto Express the claim was still thrown out causing me to get very angry! First of all one has to ask if RAC warranties are worth having in the first place? Secondly, why did they not pursue a claim through the Financial Ombudsman Service as the warranty claim was not fit for purpose and the report, that should really have been independent, confused the issue.

The RAC refused the claim because the timing chain had ‘reached the end of its working life’. So why report that the driver should have heard the noise from the timing area of the engine, are they now saying that had he heard it and made a claim he would have been successful?

Then to confuse matters further they say that ‘reasonable steps have not been taken to mitigate the loss’. So are they saying that they would have paid out for a new timing chain but would not pay out for the engine because the driver should have stopped the car as soon as he was aware of a problem as a result of the noisy engine?

There was a very strong case to take to the Financial Ombudsman as well as a complaint to Trading Standards for breach of the Consumer Rights Act 2015. As the car had been recently serviced the engineer would have been the one to identify the noise from the engine, not the driver sitting in the soundproofed cabin.

To be honest I would also have made a claim to the EU Consumer Centre under the EU 2 year guarantee scheme. That normally sends anyone against whom the claim is made into a tailspin!

I applaud the efforts made by all the motor magazines but they really ought to be more aware of the remedies available. By Graham Hill

I know you love a quirky, but serious, story. You may or not be aware that hitting a number of animals whilst driving must be reported to the police. However, the list doesn’t include cats which has upset a few cat owners according to a survey carried out by Carbuyer magazine.

As the law stands if you his a number of animals, including dogs, horses, cattle and sheep you must report the incident to the police but cats aren’t included. The Carbuyer study found that 59% of motorists were in favour of a law requiring you to report ‘cat incidents’ to the police.

The Labour Party have gone one step further in their calls for reform in domestic pet rules by making microchipping mandatory for cats and a new ruling that would require ‘motorists to report accidents where an animal has been injured’.

Animal rights campaigner, Mandy Lowe, sadly said that if the driver makes no attempt to locate the owner, or take the cat to a vet to be scanned for a microchip, the local authority’s waste disposal team will collect it and dispose of it. I’m not an animal person but that would make me sad if someone’s pet was killed and they didn’t know.

Figures from Highways England show that 320 dead cats were found on motorways and A roads over a 2 year period. More Pussy Power and fairness to cat owners is what I say! Can I say that? Hmmm better move on. By Graham Hill

Increased penalties imposed on those still talking and texting on handheld phones is meant to act as a deterrent in order to prevent drivers from being distracted. We all saw the harrowing scenes on the news when a lorry driver, whilst texting on his phone, careered into the back of a car in a traffic jam.

So it mystified me when car manufacturers started to change their sat nav and in-car controls from a twiddler on the steering wheel, or in the centre console, to touchscreen. In my opinion even more distracting than texting on your mobile.

Years ago all we had to look down at was the speedo and anything that flashed red, warning you to stop. Or if you were a bit of a boy or girl racer the rev. counter warning you before you sent your engine into the next county.

With this in mind, I was shocked to see South Korean tech firm Harman, now owned by Samsung, bring out something close to a cinema screen fitted into the dashboard of a Maserati in order to showcase their latest tech.

Within the screen, that stretched the length of the dashboard was a 12.3” digital instrument screen, a 12.4” curved portrait layout display at the bottom of the centre console, and a widescreen 28” QLED screen that can operate in ‘ultra-slim’ mode or extend upwards to show maps or – wait for it – streaming video!

Are they nuts? Whilst I can understand that they are showcasing what they are capable of doing this is hardly the way forward until we get to autonomous cars that will need something distracting to take away the boredom of not driving. But this tech was fitted into a standard(ish) car.

Harman explained that the Tech could be available for fitting into cars within 18 – 24 months ‘depending on the car maker’s needs.’ They also showcased a similar setup intended for city cars in a Mini. I’m all for building in latest tech for drivers and passengers but I feel they are going one step too far with this latest development. By Graham Hill

As you know I find out some very strange things and like to share them with you and all my other readers. When rear parking sensors came out I met a fitter who was making loadsamoney out of retrofitting rear parking sensors. I assumed this was a very complex exercise but it turned out to be incredibly simple and really cheap.

He told me that in virtually all the cars, into which he fitted sensors, they were already pre-wired for parking sensors. It turned out that it was cheaper for manufacturers to fit standard electric looms, including parking sensor wiring, to all cars whether they had sensors fitted or not.

In some cases, he would have to drill holes in the bumper to match up with the connectors. But there were many with blank plates inserted into pre-drilled holes that simply needed to be popped out and sensors popped in and connected. The crazy thing was that the actual sensors only cost a few pennies each so why didn’t the manufacturers simply make them a standard feature?

They would have only had to connect the sensors and connect the light and sound control units to each end of the loom, again costing no more than a couple of pounds in total, and they were good to go. So why not include the sensors as standard?

So what has all that to do with speakers? Well, it turns out that many cars without sound upgrades or sound packs have all the wiring installed but with blanking plates fitted where it looks like speakers are fitted.

Why not fit speakers as standard? They only cost a few pounds each and all the wiring is there. When you look around the inside of your car you may believe that all the speaker grills are covering speakers when in fact they don’t. When was the last time you squashed your ear to a speaker to check whether there was any sound coming out? An Audi Q2 driver didn’t actually go that far but could tell that there seemed to be no sound balance in his car.

It turned out that all four front speakers were wired up but none in the rear. It looked impressive and when questioned Audi initially said that all speakers were wired but eventually admitted that only 4 speakers were live and all of those were in the front of the car.

In the first place, they should have wired two at the front and two at the rear but better still, as all the wiring was there, why not connect up all the speakers, again for just a few pounds. I sometimes despair of the manufacturers. By Graham Hill

Back in 2012 around a quarter of all new car registrations were autos. In 2017 that grew to 1,016,516, around 50%, so clearly there is a strong move towards autos. The reason could possibly be because we spend so long in traffic jams and nothing irritates quite so much as having to put the car in and out of gear every couple of minutes.

Spend half an hour in a traffic jam and the clutch pedal that always seemed light as a feather is now as heavy as a ton weight. Whatever the reason, the demand is increasing but the manufacturers seemed to have missed it. Whenever we have limited stock deals they tend to be mainly manuals unless the cars are executive cars, then they tend only to be autos.

This week we saw a typical example when we had a limited stock deal from VW on Tiguan petrol cars. Half were manual and half auto. That in itself was unusual because most cars of that size on special offer tend to be manuals. Within 48 hours all the autos had gone but we still had plenty of manuals (unfortunately all gone now). Crazy but proves my point.

So come on manufactures lets have access to more autos. They used to be around £30 + VAT more per month but with stronger resale values that difference has dropped to a more realistic £10 + VAT. Personally, I have driven autos for years and certainly wouldn’t go back to a manual. By Graham Hill

I’ve just been looking at the latest design proposed for the Nissan autonomous car. I’m not picking on Nissan because every time I open a motoring magazine I see the latest designs being proposed, by another manufacturer, for their autonomous car and frankly they all look very similar.

Have you seen them? They look ugly and ridiculous on the outside and even more dopey on the inside. Why? They are turning into functional, minimalist pods. Just because the cars will eventually drive themselves doesn’t mean that they have to look boring and ugly. The good news is that we are many years away from the fully autonomous cars but in the meantime we will have electric cars.

They have to be driven so they will have to have instruments and means to drive them so let’s not move the designs too far away from the cars we have at the moment for Hybrids, petrol and diesel engine cars. Retain some style and good looks rather than move into something that is without flair and simply as functional as an electric plug. By Graham Hill

Most brokers and dealers have been sending out quotes on cars for delivery after the end of March, when all the new Road Fund Licence and First Registration Fee changes come into force, having not been told that the increases have not been factored into all the quoting systems.

It would seem that a few funders have not yet updated their systems to include the changes, especially to diesel cars and those costing over £40,000.

This could end up with customers having to pay the difference between the old figure and the new one. Not an acceptable situation and one that is causing both dealers and brokers concern and potential problems with customers as they are told of the extra costs.

Like most, I’m seeking clarity, but in the meantime please be aware that if you are looking for delivery of your car beyond the end of March the rate will most definitely increase or you may have some money to pay to make up the difference when the road fund licence becomes due.

If possible take delivery of your next car before the end of March and avoid all the increases.  By Graham Hill

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