Financial Ombudsman upholds the right to reject Alfa Romeo Giulia Quadrifoglio

It is a widespread belief that the offer or supply of a courtesy mitigates the requirement (a) to complete vehicle repairs in a reasonable time and without significant inconvenience and (b) refund monthly finance payments.

CA Auto Finance shared this view, and that as the attempted repairs on the Alfa were carried out under the terms of the manufacturer’s new car warranty, that they could not be held liable.

The Financial Ombudsman Service disagreed, ordering the finance agreement be unwound and the deposit and monthly payments refunded, save for those when Mr V had use of the Alfa Romeo.

The relevant facts

In December 2022 Mr V bought the 2 year old Alfa Romeo Giulia Quadrifoglio for around £54,000.00 from CA Auto Finance aka FCA Automotive Services UK Ltd T/A Alfa Romeo Financial Services, by way of a 48 month PCP agreement via Motorvogue Norwich.

On 17^th December 2022, Mr V informed Motorvogue the engine management light had come on, who told him to contract Alfa roadside assist, which he did, but no fault was found.

On 26^th December 2022, Mr V informed Motorvogue the Alfa had gone into limp mode, and he had again contacted Alfa roadside assist.

The Alfa was recovered to Johnsons Alfa Romeo who replaced the turbos.

The car was returned in late February 2023, but within a month Mr V told CA Finance and Motorvogue there were more problems with the car.

Because by the end of May 2023 the car remained unrepaired, Mr V rejected it, which CA Finance refused.

Our Instructions

Stormcatcher’s Mr Philip Harmer, a specialist automotive law and car finance lawyer, represented Mr V in pursuing the finance unwind and refund with CA Finance and the Financial Ombudsman Service.

Mr Harmer set out in a letter to CA finance and Motorvogue the factual, evidential and legal basis for Mr V’s rejection and explain the reasons why the decision to refuse the rejection was incorrect.

CA Finance instructed Lester Aldridge solicitors to respond, who confirmed the car repairs were carried out under the terms of the manufacturer’s warranty and because of this the finance company were not liable.

Preliminary decision

In the meantime, Mr V was informed the car had been repaired and because of this the FOS investigator was of the view that the complaint must fail.

Stormcatcher successfully argued that the issue was not whether the car had been repaired, but that Mr V had been without proper use of the Vehicle for around 9 months and that this was not a reasonable time and caused Mr V significant inconvenience, with which the FOS agreed.

However, it was suggested that because Mr V had use of a courtesy vehicle during the time he was without the Alfa, he was not entitled to be refunded the monthly payments paid while the car was being repaired.

Mr Harmer argued that the Alfa was a performance car, bought for fun and enjoyment rather than just a mode of transport and because the courtesy car did not fulfil these requirements it was not a like for like replacement.

Decision

The Ombudsman found in favour of Mr V, for reasons broadly in line with the submissions of Mr Harmer.

CA Finance were ordered to unwind the PCP and refund Mr V his £10,000 deposit and around eight monthly payments as well as compensation of £400 and interest on the refund amounts at 8%.

The full decision can be found here >>>>>>>>

Conclusion

This case further underlines the agreement to repair the car is a ‘time of the essence’ agreement, contrasted with a warranty claim in which the agreement is simply to repair the car free of charge.

Therefore, dealers and finance companies which use the warranty rather than carry out the repairs under the Consumer Rights Act, may well get their fingers burnt.

The idea that by providing a courtesy car avoids significant inconvenience is similarly flawed. For legal advice involving rejecting a car on finance, automotive law and the legal rights in relation to faulty goods, phone 0333 700 7676.