A consumer says that she wasn’t aware that the finance agreement had a mileage cap

Consumer Credit

When Claire returned the car at the end of her finance agreement, she was sent an invoice from the finance provider to pay additional charges for exceeding the mileage limit. Claire asked us to investigate her complaint because she wasn't aware of the mileage cap and felt she had been treated unfairly. 

What happened

Claire entered into a hire purchase agreement for a new car. The agreement was set to run for a term of three years. At the end of the three years, Claire returned the car to the finance provider. They sent her an invoice for £2,000 for exceeding the allowed mileage under the agreement. They said the agreement allowed her to drive the car 18,000 miles over the three years of the agreement, but she had in fact driven 28,000 miles.

Claire said she was unaware of a term that limited the mileage she could drive. She said she’d told the dealer the monthly amount she wanted to pay and there was no discussion of a mileage cap. She said she’d had hire purchase agreements before and hadn’t been charged excess mileage when she returned the cars. She said if she’d known about the limit she wouldn’t have agreed to it as 6,000 miles a year wasn’t enough to cover her driving needs.

Claire made a complaint to the finance provider. The finance provider said in its final response that the agreement clearly set out the annual mileage cap and so they were entitled to charge Claire for going over the allowed mileage. Unhappy with the final response letter, Claire asked us to investigate her complaint. 

What we said

We noted that the agreement clearly showed there was an annual mileage cap of 6,000 miles and that Claire had signed it. We contacted the finance providers for Claire’s two previous hire purchase agreements. They confirmed she hadn’t ever been charged excess mileage. We also asked Claire for her insurance certificate. This showed a declared annual mileage of 10,000 miles a year.  We also noticed that when Claire exchanged her old car as part of the new deal that she’d driven it 29,000 miles in the three years she’d had it. We thought that what Claire had said about not being told about a mileage limit was persuasive, and her account was supported by other evidence.

We thought it more likely than not that Claire didn’t know that there was a mileage cap in the agreement. We also thought that this should have been brought to her attention by the credit broker and this hadn’t happened. So we asked the finance provider to waive the majority of the excess mileage charges. But we said that the business could charge Claire a small proportion of the charges, as she would’ve agreed to pay slightly more to have the mileage allowance that she needed.