BMW Financial Services(GB) Limited · DRN-6244700

The complaint Miss B complains that a car supplied to her under a hire purchase agreement with BMW Financial Services(GB) Limited (BMWFS) is of unsatisfactory quality. What happened The circumstances surrounding this complaint and my initial findings were set out in my provisional decision which said: “In September 2024, Miss B entered into a hire purchase agreement with BMWFS to acquire a used car. The car was around six years old, with a mileage of around 26,735 miles. The cash price of the car was £27,500.00 and an advance payment of £3,500.00 was paid. The total amount payable on the agreement was £35,906.57, payable by 45 repayments of £473.07 followed by a final repayment of £11,118.42. Miss B explained she had issues with her vehicle soon after purchase and was in contact with the dealership about these. The vehicle was booked in with the dealership in November 2024 to investigate issues including a misfire and cosmetic damage. Following this, Miss B has explained she found the dealership difficult to deal with, and not a lot of progress was made, with issues not being found. Miss B then explained she took the vehicle to another manufacturer linked repairer in April 2025, where many faults were found, including needing a new rear differential, and a juddering and lumpy engine when running. Miss B said she’d been trying to reject the vehicle within the first 30 days of the agreement, and wanted to reject again after the other repairer found these issues leading to potentially needing a new engine. Following this, Miss B complained to BMWFS about the situation. Miss B’s complaint was partially upheld, as the dealership had agreed to resolve the faults deemed to be present or developing at the point of sale. BMWFS did not accept Miss B’s request to reject the vehicle. As Miss B was unhappy with this outcome, she brought the complaint to this service, where it was passed to one of our investigators. The investigator upheld the complaint, and explained that the fair outcome will be to repair the vehicle, repay some monthly payments and pay an additional payment for distress and inconvenience. Miss B wanted to reject the vehicle but accepted the outcome. BMWFS also accepted the outcome. However, the repairs have not been carried out in a timely manner, with around three months passing, and the dealership appearing to be unresponsive with Miss B and BMWFS. As such, the complaint has been reopened and passed to me to review and make a Decision.”

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I sent Miss B and BMWFS my provisional decision. I explained why I thought the complaint should be upheld. The key parts of my provisional findings are copied below: I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. “I’ve read and considered the whole file, but I’ll concentrate my comments on what I think is relevant. If I don’t comment on any specific point it’s not because I’ve failed to take it on board and think about it but because I don’t think I need to comment on it in order to reach my decision. Miss B acquired a car under a hire purchase agreement. Entering into consumer credit contracts like this is a regulated activity, so I’m satisfied we can consider Miss B’s complaint about BMWFS. BMWFS is also the supplier of the goods under this type of agreement meaning they are responsible for a complaint about the supply of the car and its quality. The Consumer Rights Act 2015 (CRA) is relevant in this case. It says that under a contract to supply goods, there is an implied term that “the quality of the goods is satisfactory, fit for purpose and as described”. To be considered as satisfactory, the CRA says the goods 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 vehicle’s history. In this case, Miss B acquired a car that was around six years old and had travelled around 26,735 miles. As this was a used car with this mileage and age, it’s reasonable to expect parts may already have suffered more wear and tear when compared to a new car or one that is less travelled. There’s a greater risk this car might need repair and/or maintenance sooner than a car which wasn’t as road-worn. I’ve reviewed the available evidence about the issues Miss B experienced with the car. Based on what I’ve seen, I’m satisfied that there were faults with the engine and rear differential amongst others. I say this because neither BMWFS or Miss B dispute the vehicle has been faulty and there is a diagnostic report confirming these faults. Having considered the car had a fault, I’ve considered whether it was of satisfactory quality at the time of supply. I can see Miss B has consistently explained she’d asked to reject the vehicle within the first 30 days of the agreement, asking to utilise her short-term right to reject as laid out by the CRA. However, whilst I’ve seen call records from Miss B and her representative, I have nothing to show that the vehicle was definitively rejected within that timeframe. It appears the vehicle was seen in November 2024 by the dealership, as I can see records showing the vehicle was investigated for a few issues, including a misfire. I’m then not able to see what the results were of this investigation, or what if anything was done by the dealership about it. There are dealership system notes in November stating if the alloys weren’t done as well, the customer would be refusing the car and the representative did not want the warranty work doing as he wants a call from sales to reject the car. There are also notes stating as yet no warranty work carried out and collected vehicle, partly to be covered by sales the rest is

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warranty. I can see BMWFS have asked the dealership a few times what the result of the investigation into the misfire resulted in, but I can’t see anything other than these notes. The notes could suggest an issue was found, but Miss B wanted to reject the vehicle, or the warranty work could be referring to one of the other issues the vehicle was seen for. Miss B is consistent in her testimony that she was having trouble with the dealership, and that issues were not being found by the dealership when investigating them. This is why Miss B explained the vehicle was taken to a different manufacturer linked repairer for diagnostics in April 2025. This diagnostic shows several issues, including with the rear differential, and a potential new engine needed with the engine lumpy and juddering. Following this diagnostic, Miss B’s complaint was upheld, and some repairs agreed. Having looked at everything I have, I’m persuaded that the vehicle was not of satisfactory quality when it was supplied, due to the issues appearing to present themselves as early as they did into the agreement. As I’m persuaded of this, it is fair for BMWFS to put things right.” What I’ve decided – and why Miss B responded to the provisional decision and queried the level of redress recommended in the provisional decision. BMWFS replied to explain Miss B had been paid £200.00 compensation and already been credited 15% of her payments made from January 2025 to June 2025, but hasn’t made a payment towards the agreement since February 2025. I thank Miss B for her comments and I acknowledge why she feels the percentage of payments isn’t enough considering the mileage she was able to achieve. This is something that I’d considered in my provisional decision. Nothing provided by Miss B persuades me that the reasoning for the 15% reduction in payments does not go far enough in redressing the situation, although I acknowledge why Miss B feels differently. I appreciate there were issues with the vehicle, however having considered the circumstances I’m persuaded that the 15% reduction is still fair for the reasons explained, and that it is fair that a full refund of any payments made starts after the diagnosis evidence showing the issues with the vehicle produced in April 2025 as explained. I appreciate the information supplied by Miss B regarding stopping using her vehicle, her insurance and the need to purchase another vehicle. However, as the diagnosis evidence that appears to show the repairs were not carried out and the severity of the issues was produced in April 2025 this is when rejection of the vehicle should have been allowed meaning this is when the refund of payments should begin, as such my reasoning and findings remains unchanged in this area. I also acknowledge what BMWFS have explained regarding the compensation and the 15% of payments already credited to Miss B. I recommended an additional £200.00 for distress and inconvenience in my provisional decision, due to the impact on Miss B, none of the information supplied has changed my reasoning or decision making on this additional aspect. BMWFS have pointed out that Miss B hasn’t made a payment towards the agreement since February 2025. Whilst this doesn’t change the reasoning or outcome of my provisional decision, it will have an impact on the redress paid to Miss B, as BMWFS will be able to take the amount already paid to Miss B into consideration when carrying out the settlement. I’ll detail this when outlining the redress due.

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As none of the supplied information has changed my findings or reasoning, I see no reason to depart from them above. I’ve explained below what I BMWFS need to do to put things right. This will be take into account the refund of some payments already credited to Miss B. Putting things right I’ve carefully considered the information available, and in doing so, I’m persuaded that rejection of the vehicle is a fair outcome. I say this because the dealership have already had one chance to repair the vehicle in November 2024, and I’m not persuaded that the information shows they carried this out or did enough to try to carry it out. The vehicle was booked in for investigation into a misfire amongst other issues. There is no information available about what was done to the vehicle, or what was found when it was investigated for this issue. As I’ve referred to above, there is some follow up notes, but this does not say what was found or what needed doing. There is more information available about the cosmetic damage than the misfire. The vehicle is then investigated by a different repairer in April 2025, where a serious issue with the engine appears to be diagnosed, potentially being severe enough to result in an engine replacement along with the rear differential issue as well as others. This is why I’m persuaded that the dealership had a chance to repair the vehicle as a whole in November 2024, but the diagnostic in April 2025 shows this was not carried out successfully. It is at this point that Miss B should have been allowed to reject the vehicle. As such, it is fair for BMWFS to end the agreement with nothing further to pay in relation to the monthly payments and arrange to collect the vehicle at no cost to Miss B. BMWFS should reimburse the deposit paid towards the agreement, with BMWFS allowed to keep any portion of the deposit that was made up of dealer contributions. Miss B suffered impaired usage of the vehicle whist she had it. It is fair that Miss B pays for her usage, but I agree with the investigator that a 15% refund of each monthly payment due, should be returned to Miss B between January 2025 and when the vehicle should’ve been accepted for rejection in April 2025. Miss B has explained she hasn’t used the vehicle since then and had to purchase another vehicle to stay mobile in. As such, any payments due after April 2025 should not be chargeable under the agreement as this is when it should have ended. Miss B has explained she purchased a vehicle prior to this, however as the evidence diagnosing the issue is from April 2025, it is fair that this is when the vehicle should’ve been allowed to be rejected and as such, it is fair this is the date a full refund of monthly payments is due from. As mentioned above, BMWFS have explained that it has already credit Miss B with 15% of her monthly payments from January 2025 to June 2025, but has not received any payments towards the agreement since February 2025. When carrying out the settlement in this complaint, BMWFS should ensure that Miss B has received a refund of 15% of her payments from January 2025 to April 2025, and then a full refund or write off of any monthly payments due after this as this is when the agreement should be treated as ended. If, when carrying out this settlement, Miss B has already received more than is due to her because of the payment situation of the account, it is reasonable in this case for BMWFS to retain any missing amount from funds previously paid by Miss B, to settle what should have been payable to BMWFS and the agreement under the redress direction above. Alongside this, BMWFS should arrange to remove any incorrect adverse information about

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the agreement from Miss B’s credit file, particularly as the agreement should’ve ended in April 2025. I also thought about if an additional payment for distress and inconvenience was needed in this case. I’m persuaded that Miss B has encountered stress, worry and anxiety as a result of what has happened, the contact with BMWFS and the dealership, and trying to have the issues resolved. As such, I agree that an additional £200 should be paid by BMWFS to reflect the distress and inconvenience caused. My final decision For the reasons explained, I uphold Miss B’s complaint and instruct BMW Financial Services (GB) Limited must follow my directions above to do the following: • End the agreement and collect the vehicle as outlined above. • Reimburse the advance payment paid as outlined above. • Pay a refund of some monthly instalments as outlined above. • pay 8% simple yearly interest* on the above, to be calculated from when Miss B made the payments to the date of the refund. • Remove any incorrect adverse information that may have been recorded with the credit reference agencies in respect of the agreement as outlined above. • Pay an additional £200 for distress and inconvenience caused. *HM Revenue & Customs requires BMW Financial Services (GB) Limited to deduct tax from the interest amount BMW Financial Services (GB) Limited should give Miss B a certificate showing how much tax it has deducted If she asks for one. Miss B can reclaim the tax from HM Revenue & Customs if appropriate. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss B to accept or reject my decision before 20 April 2026. Jack Evans Ombudsman

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