PCH price increases

[TriggerFish]

Hi all,

 

Bit of an odd one, and I was wondering if anyone here had any views at all.

 

I've recently signed up on a PCH for a new car, due to be delivered 14th January.

 

I had a phone call earlier today from the supplying dealer saying that the underwriter has cut/reduced funding for this car model for vehicles delivered after 31st Dec. 2015, and that my monthly payments would increase by £70p/m, should I stick with it. Or, they've got this stock car for £13p/m less, but without a leather interior/dash.

 

Now, my thoughts are, I've signed the contracted and posted it back, and I'm outside of my 14 day cooling off period, so I see it that we're both locked into this contract at the agreed price, even if the car isn't here yet. (Correct?)

 

In the contract, the only statements relating to price increases are these:

 

 

(h) We may change the amount of our administration fees payable under this agreement. We will notify you in writing before we make a change.

 

(i) If any change to the rate of Corporation Tax or capital allowances results in a reduction of our after tax rate of return from this agreement, we may adjust the Rentals in order to preserve our rate of return. If we do so, we will give you reasonable notice of any adjustment we make. The adjusted amount will be payable from the date stated in the notice.

 

Edit - it chopped half my post off... :(

 

I don't think that the capital allowances are changing, (and they'd have advance knowledge if so...), so are they able to increase the price like this?

 

I'd have thought that the fact I'm outside of the cooling off period, and that the contracts are signed/returned means that we're locked in?

 

Cheers,

Joe

Edited 11 December, 2015 by TriggerFish

[classic]

Sounds to me like the rules are weighted very much in their favour. If you'd had a change in circumstances you couldn't have said I can only afford it with a £70/ month reduction !

Being cynical if the car is a VW group diesel they may be trying to cover any potential future loss in value.

I honestly don't know the legal position but on a pch where you have no final ownership option, then this an £840 per year additional cost to you with absolutely zero benefit to you. I would seek legal advice as to whether this fundamental change to the agreement gives you a get out.

Edited 11 December, 2015 by classic

[TriggerFish]

Thanks.

 

It's not a VW derv (far from it - it's an i3). I'll swing by the dealer later and ask, as, due to a weird BMW-leasing-options-suck situation, they're outsourcing their leasing to FleetDrive (who outsource to Alphabet, owned by BMW -_- ). so hopefully will be up front about it all. 

 

I'll look at doing further/legal searching later on once I've had a chat, and once I'm not at work

 

Either way, it's pretty rubbish behaviour from the underwriters/funders... 

[Chris]

Pretty sure they can't alter figures etc once you have signed an agreement etc. Also..they will have credit scored you based on the initial cost so how do they know that you can afford an additional £70 a month? Unless they rescore you with the new figures...which you wont have agreed to.

Sounds odd to me....

[classic]

Good luck.

For what it's worth, my sister has an i3 (with leather interior), I was in it at the weekend and it's awesome - good choice !

[TriggerFish]

That's a good point Chris... (I've also started getting PPI calls, which I never had until this credit check :( ). 

 

Good luck.
For what it's worth, my sister has an i3 (with leather interior), I was in it at the weekend and it's awesome - good choice !

 

Cheers - I'm impressed, obviously! I ordered one with the leather interior. They've got a stock car for £13p/m less, but without the leather interior, but with self parking instead (I think I forgot to readd that after my first post was truncated). I'd rather pay the original price, at £13p/m more, and have leather.

 

Part of me wonders if this is a 'ploy' to try and get their stock car shifted... 

[TriggerFish]

The plot thickens...

 

I spoke to Alphabet, and they say that this is something that they're unlikely to do unless the RRP of the car changes, which it hasn't...

 

(I ordered through BMW, who outsourced to FleetDrive, who get their cars from Alphabet...)

[classic]

Sounds like someone in that tangled Web got their sums wrong, and the easy option is for you to pay more...

[gadgetman]

If you've signed a contract and there's nothing in it about increasing payments other than RPI or because you've changed the terms (ie over mileage etc) then this is their problem.

[TriggerFish]

That was my understanding too - their issue, not mine. (Although of course, it is now my issue.)

 

Sounds like someone in that tangled Web got their sums wrong, and the easy option is for you to pay more...

 

I went to see the dealer yesterday (and their stock car, which is nice, but the basic interior just isn't anywhere near as appealing, although if it's that or nothing, I'll take it...). They're saying that Alphabet are dropping funding for the i3 delivered after 31st Dec. '15, and this is why the price is going up. Not that I can see anything that mentions that as a clause anywhere, or why it should be my problem...

[999pooch]

That was my understanding too - their issue, not mine. (Although of course, it is now my issue.)

I went to see the dealer yesterday (and their stock car, which is nice, but the basic interior just isn't anywhere near as appealing, although if it's that or nothing, I'll take it...). They're saying that Alphabet are dropping funding for the i3 delivered after 31st Dec. '15, and this is why the price is going up. Not that I can see anything that mentions that as a clause anywhere, or why it should be my problem...

Is there a clause in the contract that states they can terminate / cancel the contract before supply?

If so they will probably use that to cancel, & then just draw up a new one at a higher price.

Heard this type of thing a few times with the Golf R. Most took the hit because the price was still good, although one guy stood his ground and got the original deal

[TriggerFish]

Nothing that I can see reading through it about cancelling prior to supply.

 

This seems to suggest that it's a fixed price too...

 

How much will you have to pay?

The advance rentals, rentals, hire arrangement fee and other charges are shown in the Pre-contract Information and in your Contract Hire agreement. 

 

Excess mileage charges will be payable if you have exceeded your maximum contract mileage at the end of the agreement. Before signing the agreement you should therefore carefully consider the number of miles you expect to drive during your agreement and ensure the maximum contract mileage stated in the Pre- contract Information and your Contract Hire agreement sufficiently covers your predicted mileage. 

 

You may have to pay additional charges if you break the agreement and you must also pay any speeding fines, parking charges and other fees and charges that become payable in relation to the use of the vehicle during the agreement. 

[999pooch]

Nothing that I can see reading through it about cancelling prior to supply.

This seems to suggest that it's a fixed price too...

There must be a section on them / you terminating the contract. What does it say?

[TriggerFish]

There must be a section on them / you terminating the contract. What does it say?

 

There's nothing that I can see on their part about cancelling.

 

8.Ending this agreement early

In the event of any default referred to in Clause 9 below, you will be considered to have repudiated this agreement. This means we may accept your repudiation and end this agreement after sending you any notice required by law and if (if the default can be remedied) you do not remedy the default by the date which we will notify to you. If we end this agreement, you must return the Vehicle to us in accordance with Clause 10 and pay the sums due in paragraph (e) under Default Charges in "Key Information".

 

...

 

Cancellation: This agreement is not cancellable

 

Clause 9 = defaults

Clause 10 = return condition of the car.

 

Here's the whole PDF: https://www.dropbox.com/s/zt9py4ufwsocifa/Example%20T%26C%27s%20alphabet%20Personal%20Contract%20Hire.pdf?dl=0

[gadgetman]

Again I can't see anything which allows a change in price simply because they're no longer funding this car, that isn't your problem.

 

I'd contact the BVRLA and follow Alphabets complaints process, copying BMW too.  I'm guessing if the deal falls through you won't be dealing with BMW again ;)

 

If you're on Facebook or Twitter, use social media to your advantage for your complaint, or you may find others who have the same problem.

[999pooch]

There's nothing that I can see on their part about cancelling.

Clause 9 = defaults

Clause 10 = return condition of the car.

Here's the whole PDF: https://www.dropbox.com/s/zt9py4ufwsocifa/Example%20T%26C%27s%20alphabet%20Personal%20Contract%20Hire.pdf?dl=0

It will be interesting to hear their take on it, when you ask them how they are increasing the cost of the lease with an existing contract in place for a lower amount then.

[999pooch]

Just read some of the PDF, and I know you have pointed it out already, but I have a feeling they may point to a change in Capital Allowances.

A car can be classed as a capital allowance, and if the depreciation changes, i.e it's worth less over a period or it attracts less funding from a finance company, then they get less capital allowance. Net effect, they are able to increase your monthly rental as per agreement.

I'm not a legal expert, but I can see it maybe going that way :(

Be interesting to see what they do say, as I lease a car, and plan to again. For me I can claim more through my business using this method

[TriggerFish]

Good point about brvla.

Re capital allowances: http://www.rossmartin.co.uk/capital-allowances-75082/315-capital-allowances-rates-and-allowances

100% fya, so not the cause here? Nice thoughts though (at a meal with a friend who works in the city, so able to explain these things to my simple mind

[999pooch]

Good point about brvla.

Re capital allowances: http://www.rossmartin.co.uk/capital-allowances-75082/315-capital-allowances-rates-and-allowances

100% fya, so not the cause here? Nice thoughts though (at a meal with a friend who works in the city, so able to explain these things to my simple mind

I wouldn't get too hung up on actual percentages of the allowances that they can claim, the fact is they may point to it as a reason that allows them to increase the monthly payments. It's as simple as that. Maybe not fair, but it might be their angle :(

Anyway, keep us informed how you get on, as I hope you get it sorted in your favour, and I am interested for future dealings

[Lady Elanore]

I'd have thought that as long as they sent you a proposal,  you have signed the contract and they have acknowledged receipt of this,  you have an agreement and so they should honour the whole thing. Unless there is something in the small print giving them a 'get out' clause, I'd have thought they were stuck with your agreement.

[Chris GB]

Personally, I would just cancel the order and get something else unless they agree to honour the original deal.

[Chubbs]

A quick phone call to trading standards may provide the answer....having contacted them in the past I found them very good and informative.

[TriggerFish]

I will keep this updated, don't worry.

 

Principle says I'd love to cancel and get something else, but, having spent ages going over this, there's nothing else that really fits the bill once you add the lease + fuel costs together (I can charge the i3 at work FOC, so it has 0 running costs...)

 

I'd forgotten trading standards, thanks. (I was thinking CAB, but I guess TS would be better for this.)

[punyXpress]

It's nothing to do with the government electric car grant is it?

[TriggerFish]

No, they're still valid, so I don't think it's those, but thanks.