Mr U v a Motor Finance Company

Mr U saw a Mercedes-Benz Benz GLS 350d AMG LINE for being offered for sale on Autotrader and went to view it. The Mercedes was 2 years old at the time and it was therefore implied that it had 1 year of the manufacturer’s warranty left, so Mr U agreed to buy it for close to £46000 by way of a consumer finance agreement.

On the way home, it became apparent that one of the headlights was defective and the supplying dealer told him to go to Mercedes-Benz who would replace it under the terms of the warranty, which he did.

Mercedes-Benz informed Mr U that the vehicle required a replacement front and rear lamp unit, but that they would not be covered under the terms of the warranty as there were signs that the vehicle had had accident damage.

Investigations into the vehicle’s history revealed that it had sustained significant and extensive collision damage the previous year, resulting in repairs costing over £19,300.

Mr U raised a complaint with the finance company who declined his rejection request, and Mr U instructed Stormcatcher Law to handle his case for him.

The case centres around 3 legal issues:

• First, the selling dealer has a statutory duty to disclose any information to a consumer which, if revealed, would likely affect the decision to buy the car. Clearly, the nigh on £20,000 repair bill would have been off-putting, to say the least.
• The second is the implied representation that the Mercedes Warranty was intact. Although the finance company argued that there had been no express representations that the warranty was active, there is a clear assumption that a 2 year old car would still be covered. The dealer should have corrected that wrong impression.
• Finally, there is the issue as to whether the car met the standard a reasonable person would consider satisfactory given the age, mileage and price in accordance with section 9 Consumer Rights Act 2015.
  With the case being made across all the relevant heads of claim, the finance company eventually accepted the rejection but not without a fight and after several months.

Nevertheless, the finance agreement was unwound, and the payments made in respect of it refunded along with various other costs.