FOS upholds refund complaint for failed Jaguar F-Pace engine after twelve months.

Car finance companies and car dealers commonly rely on expert evidence from vehicle inspection firms to determine whether to uphold or decline vehicle quality complaints.

Mostly, no one actually reads the report, focussing instead on the conclusion, “We do not consider the condition to have been developing at inception.”

But engineer reports aside, surely common sense dictates that if the engine failed after twelve months into a 60-month hire purchase agreement, it can’t have been the customer’s fault, can it?

In this case, we took on and overcame the opinions of two engineering reports, the decision of the supplying car dealer and the finance company.

The relevant facts

Mr O bought a 2.0L diesel Jaguar F-Pace from Big Motoring World for around £30,000 by way of a 60-month HP agreement with Conister Bank via Marsh Finance acting as a broker. The car had low mileage with around 45,000 miles on the clock and appeared to have been well-maintained and serviced.

Although the F-Pace had been serviced before he bought it, Mr O had to have it serviced again after six months and only a few thousand miles because the service indicator came on.

About five months after that, and having only driven it for 6,000 miles, the car suffered a failed engine.

Big Motoring World obtained an inspection report on the Jaguar by an independent vehicle inspection service, which confirmed an engine “knocking noise,” excessive soot contamination, excessive back pressure and oil dilution.

However, they concluded “we do not consider the condition to have been developing at inception”, and the warranty declined cover.

Mr O had Automotive Consulting Engineers Ltd (“ACE”) carry out a report, which stated the engine is suffering crankshaft bearing issues and that, commonly, this is caused by oil condition, oil contamination.

However, because of the mileage, they could not say that this condition was present at the time of sale.

As a result, Conister Bank declined to uphold Mr O’s complaint.

Our Instructions

Stormcatcher were instructed to analyse the evidence, including the two engineer reports and the responses from the dealer and finance company. We prepared a detailed legal analysis of the facts, evidence and the relevant legal principles.

Although the engine had not been stripped and there was no physical evidence of the cause of the F-Pace engine failure, we could determine from the symptoms, including the knocking, soot contamination and oil dilution, that the crankshaft bearings had failed.

Applying the principles of competing causation, we could establish that the engine problems could only have been caused by an inherent defect.

Ombudsman Decision

The Financial Ombudsman Service (FOS) agreed with our opinion and that Mr O should be allowed to reject the F-Pace, but did not agree that he should be refunded the deposit. We prepared a further legal opinion on the remedy in circumstances like this, with which the FOS agreed. They ordered the finance agreement to be unwound, the deposit refunded along with all the monthly payments since the engine failed, as well as Mr O’s expenses.

Conclusion

This case highlights that while expert evidence can be useful, it’s not foolproof, and as with all evidence, it has to be properly applied to the relevant issue.

As well as this, the F-Pace case shows that just because the two engineers, the car dealer and the finance company agree the problem wasn’t present or developing on delivery, it doesn’t mean it’s true.