Black Horse Limited · DRN-6118701

The complaint Mrs T complains about the quality of a new car she acquired through a hire purchase agreement with Black Horse Limited trading as Jaguar Financial Services (Black Horse). Mrs T says that the car suffered from water ingress very soon after she had acquired it, and this has caused multiple problems. These have made the car unsafe to drive. Mrs T’s complaint has been made with the assistance of a representative at times. I’ve referred to Mrs T and her representative’s comments as being from Mrs T for ease of reading. What happened Mrs T’s complaint is about the quality of a car she acquired in April 2021. The car was new. Mrs T acquired the car using a hire purchase agreement. The vehicle had a retail price of £40,839. Mrs T paid a £3,200 deposit meaning £37,639 was financed. This agreement was to be repaid through 47 monthly repayments of £461.62 and then a final repayment of £21,667. Making a total to repay of £46,563.14. Mrs T has repaid the agreement in full, and she now owns the car. Mrs T complained to Black Horse saying that the car had water ingress from a very early point and this has led to it becoming faulty and breaking down. Black Horse considered this complaint, and it didn’t uphold it. It said there was no evidence that the car had long standing water ingress, or that this had caused the recent breakdown of the car. Mrs T didn’t agree with this and brought her complaint to the Financial Ombudsman Service. Our Investigator upheld Mrs T’s complaint. She was satisfied that the car was faulty as this was confirmed by the breakdown report and an independent report her insurers had produced. And she was persuaded that the damage to the car was caused by prolonged water ingress, that Mrs T had brought to the dealership’s attention, and it hadn’t been repaired. And she agreed with the independent report which said the water ingress was due to a manufacturing fault and so the car was not of satisfactory quality. And in any event the car had not been durable as it was relatively young when it had broken down and needed extensive repairs. Black Horse didn’t agree with the Investigator. It said that the garage where the car was now held had inspected it and said that the damage to it was caused by water ingress through a wheel arch, and not through the windscreen. So, it was not established that the car had a manufacturing defect and so was likely of satisfactory quality. There was some further correspondence, but no new issues were raised. Because Black Horse didn’t agree, this matter has been passed to me to make a final decision.

-- 1 of 4 --

What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. In considering what is fair and reasonable, I need to have regard to the relevant law and regulations, regulators’ rules, guidance and standards, codes of practice and (where appropriate) what I consider was good industry practice at the relevant time. The complaint is about a regulated hire purchase agreement, so we can consider a complaint relating to it. Black Horse as the supplier of the goods under this type of agreement is responsible for a complaint about their quality. The Consumer Rights Act 2015 (‘CRA’) is relevant to this complaint. It says that under a contract to supply goods, there is an implied term that ‘the quality of the goods is satisfactory’. To be considered ‘satisfactory’, the goods would need to meet the standard that a reasonable person would consider satisfactory – considering any description of the goods, the price and all the other relevant circumstances. So, it seems likely that in a case involving a car, the other relevant circumstances a court would consider might include things like the age and mileage at the time of sale and the car’s history. The quality of the goods includes their general state and condition and other things like their fitness for purpose, appearance and finish, freedom from minor defects, safety, and durability can be aspects of this. Here, the car was acquired new with a cash price of around £40,000. So, I think it’s fair to say that a reasonable person would expect the level of quality to be higher than a second- hand, more road-worn car and that it could be used – free from defects – for a considerable period. Mrs T has complained about the quality of the car. Below is a summary of the issues complained about by Mrs T and the investigation that has been carried out by several organisations. All the parties are fully aware of what has happened with the car, so whilst I’ve considered everything I’ve been provided, I won’t provide much detail here because of this. So briefly: • In May 2021, Mrs T says she told the dealership that the car was leaking from around the roof and or windscreen area. She’s provided photographs of the problem which she says she sent to the dealership at this time. • Mrs T said that she didn’t receive a response to this initial contact but after several further emails the car was looked at by a dealership who couldn’t find a fault with it. • Mrs T said she continued to experience the car leaking in the same way, and she’s provided several photos and video evidence, some of which are time stamped and some of which aren’t, but overall, they do show this problem existed since early 2021 and wasn’t rectified. • Mrs T says she contacted the dealership several times about this, there is some record of this, but, due to changes with the dealership these are not complete. • And the car has been looked at by the dealership several times for other issues such as safety recalls. Mrs T said she raised the water ingress at these times, but the fault was not rectified. There is some evidence that this happened.

-- 2 of 4 --

In May 2025 the car broke down. It had covered just over 27,000 miles. The report from the recovery company shows that this was due to problems with the electrical system and there was a burning smell coming from the engine bay and dashboard. Mrs T contacted her insurance company who arranged for the car to be inspected by a third party. This report concluded that: ‘Water damage was identified affecting the internal wiring loom and control module. The evidence indicates a long-standing defect present since the vehicle was new. Although out of warranty, the issue appears to be a manufacturer-related defect. The car required repair at a cost of £16,241.10 for parts only.’ And the cover letter to the report said that: ‘The engineer has advised that it is clear from the inspection your vehicle has not been subjected to any flood waters, therefore any water that has entered your vehicle is due to a defect with the vehicle itself, you had shown our engineer video footage of water leaking in the vehicle in the past. You have explained since the vehicle has been in your care from new you have had reoccurring issues with it.’ I understand that the manufacturer has offered to pay 40% of the cost of the repair but the car hasn’t been repaired or driven since this time. But given all of this, I think it’s established that the car has multiple faults caused by water ingress and the car is now potentially beyond economic repair. I’ve gone on to consider if the car was of unsatisfactory quality because of this. I’m persuaded that the damage to the car was caused by water ingress via the roof or windscreen area. I’ve seen videos and photographic evidence of this, and how Mrs T has described the problem over time is plausible. I’m also persuaded that she has raised this with the dealership over time and the issue was not resolved. It follows that I think this leak is the most likely source of the damage the car has suffered. As this leak seems to have been present from a very early point in Mrs T’s time of ownership of the car then it’s reasonable to say that it was a manufacturing defect that was present at the time of sale. As above, a reporting company that looked at the car has also reached this conclusion. I think the car wasn’t of satisfactory quality when it was supplied. And Mrs T should be compensated on this basis. Black Horse has said that, following a discussion with an engineer at the garage where it is stored, it thinks it’s more likely that the water damage was caused by water ingress via the wheel arches. And this would mean that the car didn’t have a manufacturing defect. Whilst I’ve noted this, I don’t think it addresses the very significant evidence that shows water ingress from the roof area of the car over time. For example, the video and photographic evidence Mrs T has supplied of the water leaking into the car from the roof area. I don’t think this should be disregarded in the way Black Horse seems to have done. Any investigation of these issues with the car should encompass Mrs T’s recollections and evidence, it would be unfair if it didn’t. And even if water was entering the car from a different area, this was a new car, and it shouldn’t be subject to water ingress in normal use that would cause it to essentially fail after about four years and 27,000 miles. The car is not of satisfactory quality because water ingress has damaged the car significantly within a relatively short period. In the unlikely event that the water leak came solely from, or in addition to, the wheel arches this wouldn’t

-- 3 of 4 --

change that. As a new car it has not been durable, and this isn’t due to any lack of maintenance or repair on Mrs T’s part. I agree that appropriate compensation is that it should be considered that the car was rejected at the point Mrs T complained about these issues. This would mean that she wouldn’t have paid the final repayment. As she indicated (at the time it was due) that she would not have paid this if she had been fully aware of the extent of the problems with the car. Her deposit should be refunded to her. I agree she had use of the car over most of the contract and so no monthly repayments should be refunded. Mrs T has indicated she agrees with this compensation. Mrs T was inconvenienced by having to report the problem to the dealership over a long period of time and with the car leaking itself. I can imagine it would have been very frustrating and stressful for the problems to keep re-occurring as they did and the car eventually broke down. So, I think the £400 suggested by our Investigator for the distress and inconvenience she experienced is fair. Overall, I think the car wasn’t of satisfactory quality and Mrs T should be compensated for this. Putting things right I uphold this complaint against Black Horse Limited and tell it to: • Take the car back without charging for collection. • Refund the final payment of £21,667. • Refund Mrs T’s deposit/part exchange contribution of £3,200. • Pay 8% simple interest per year on all refunded amounts from the date of payment until the date of settlement. • Pay a further amount of £400 for any distress or inconvenience that’s been caused due to the faulty goods. • Remove any adverse information from Mrs T’s credit file in relation to the agreement, if applicable. If Black Horse considers that it’s required by HM Revenue & Customs to withhold income tax from the interest part of my award, it should tell Mrs T how much it’s taken off. It should also give Mrs T a tax deduction certificate if he asks for one, so she can reclaim the tax from HM Revenue & Customs if appropriate. My final decision For the reasons I’ve explained, I partly uphold Mrs T’s complaint. Black Horse Limited should put things right by doing what I’ve said above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs T to accept or reject my decision before 24 April 2026. Andy Burlinson Ombudsman

-- 4 of 4 --