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Keeping up with the Joneses can turn into a bumpy ride

As with any industry, sometimes things go wrong

Everyone loves that ‘new car’ smell and the thrill of ‘a new set of wheels’ but cars are complex machines and sometimes they give us headaches. Which begs the question of how well you actually know the ins and outs of the Hire Purchase or Personal Contract Purchase that you signed.

You may be the registered keeper, but the chances are you are not actually the legal owner (which could in fact be the finance company)…which could work to your advantage.

If you experience problems with the vehicle then you may have recourse against the dealership and/or the finance company if it comes to demanding a refund or repair costs – notwithstanding the fact that new cars come with warranties.

Your rights are clearly defined in the Consumer Rights Act 2015. In short, the dealership and the finance company have a legal obligation to ensure that the car sold is of satisfactory quality, is fit for purpose and as described. But that is not always the case.

Regarding general faults, the dealer will be allowed to try and fix the vehicle for you, giving them a chance to rectify the fault. In the event that the problem cannot be fixed, you have the right to reject the vehicle entirely and receive a refund, minus reasonable deductions for use/wear and tear.

If a fault appears after six months of ownership, it is down to you as the buyer to prove it was there at the time you took the vehicle.

In certain circumstances, you have a legal right to voluntarily terminate your PCP or HP under the Consumer Credit Act 1974, meaning you can cancel your finance agreement early and simply walk away. For obvious reasons, many car companies take a dislike to these terms and it is usually poorly explained (if at all) by dealers.

What if your circumstances change?

You may be eligible for voluntary termination of your car finance agreement with nothing more to pay and no penalties incurred. The law – fairly and sensibly – provides protection to finance companies to ensure borrowers cannot simply walk away at the drop of a hat by setting the minimum repayment amount at 50 per cent of the total amount payable. That means to be able to terminate the agreement, you have to repay, or have repaid, 50pc of the total amount payable: not 50pc of the contract duration nor 50pc of what you borrowed. The company will also ensure that there is no damage to the vehicle over and above normal wear and tear.

Assuming you have complied with the criteria, you will have nothing further to pay. What is more, voluntary termination will not affect your credit score or credit rating but some finance companies may decline further finance applications from you.

Let’s be clear. We can think of a number of vendors and local leasing businesses whom we would not hesitate to use or hesitate to recommend. They will look after you, explain everything clearly and make sure you get a great deal – some have even, rightly, won awards for their excellent service but there will always be some who are not quite so transparent and as with any industry, sometimes things go wrong.

n Wilson Browne Solicitors have helped to resolve disputes involving vehicles for both consumers and dealerships. To start your journey for practical, down-to-earth advice give us a call. We’re all the help you need. www.wilsonbrowne.co.uk

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