3yrs car lease ending - have to pay 7.5p/mls as new car delayed? **RESOLVED**

[kkatiew]

Hi,

I leased a car through a salary sacrifice scheme on a 3 year deal.  The 3 years were up on 5 October 2021.  I was asked to order a new car about 3 months ago or buy the car or send it back.

 

I ordered a new one and got an email to say that the car would be arrive in time and it will now be next year (end of Jan) but I can keep the old car until the new one arrives.  My mileage allowance is 15,000 over the 3 years and I am now on 14,240. The car company have said that once I have done the 15,000 miles, I will then be charged at 7.5pence for every mile.

 

Now my issue is that should be new car have arrived on time, I would be entering into a new mileage allowance and not having to pay this 7.5p per mile.

 

Where do I stand with this ?  

 

I am, of course still paying the monthly payment for the vehicle, again I am making at least 4 extra payments for a car that is over 3 years old.

 

Thanks.

Edited October 3, 2021 by dx100uk
block of text spaced to paragraphs

[BankFodder]

Interesting problem. Not because the principles are difficult – it's clear that they are in breach of contract unless it says something different in your contract. What makes it interesting is the calculations and it's going to take me a bit of time to get those sort it in my mind.

They are in breach of contract and you certainly shouldn't suffer any loss at all as a result of the breach of contract.

I'm trying to understand whether there are two issues here – the mileage fee and separately, the monthly payments.

I think it will help us if you would have a look at the contract and see if it says anything about late delivery. If there is a new contract for the new vehicle then check that one as well.

Presumably they aren't saying that when you eventually take delivery of your new vehicle at the end of January which is four months late, that you are already eating into your three-year allowance on that one – but maybe you can clarify.

In the event that your three-year period begins with the delivery of the new vehicle, what they are saying is that they are extending your three years on the existing vehicle.

Can you tell us what the payments are on this one and maybe you could tell us what kind of vehicle it is. What are the payments on the new one and what kind of vehicle is that one.

Apart from anything else, does it bother you at all having to hang onto the old vehicle? Is the new one a substantial improvement over this present one?

Also, please can you tell us the name of the company you are dealing with

[unclebulgaria67]

This delay is caused by Covid, with some new cars not due to be delivered for months or years after the original advised delivery date. Manufacturers plants making car parts have been closed and there has been disruption to transportation logistics.

 

I suspect the end of January 2022, is an estimated delivery date and the lease plus mileage fee is extendable. 

 

Check your lease contract, to see if the lease extension and mileage fee are included within the terms.

 

If you just handed the car back at end of 3 year lease, what other vehicle choices are available to you?

[CraigMcK]

Just to clarify the delays with cars is more likely due to a global shortage of chips. There are very few silicone manufacturers and one in China had a fire and was/is closed.  This is why deliveries are generally much longer just now and the likes of JLR are on reduced working. 
I assume you don’t want to hand the car back?

[Tony P]

As Bankfodder says - it depends on the terms of the contract of which "they" are in breach. Also who are the parties to this contract - you, your employer or an outside firm?

 

If you continue paying the monthly fee under a contract extention (effectively a new short term contract) you surely should also continue to get the monthly mileage allowance. This ignores that the monthly payment was based on a new car instead of a 3 year old one.

 

Additionally, if negotiating with them, on a numbers approach, your initial contract equaled 416 miles per month. You have 760 in hand which, at that limit, should see you through to late November before any mileage fee. 

[kkatiew]

Right, so I have attached my new and old contracts to this message.  The only thing I canfind relating to the late delivery of a car is :

 

 

The current status of your order is showing as :  Scheduled for build – ETA late November

 

We have placed your vehicle order with one of our preferred dealers.  The dealer places the order with the factory and are advised the estimated time of arrival.  The ETA of a vehicle is based on varying factors such as build schedules, supply demand etc.  The ETA is an approximate estimate, and we are not able to confirm delivery dates until the vehicle arrives in stock with the dealer.

 

[BankFodder]

The documents you have posted above simply seem to be the salary sacrifice agreement and not the contract that you have with the car dealer.

I think that @Tony P has it right, that really this is an extension of the existing contract. I don't think that they can say that you have now moved into a contract where you have exceeded your mileage and therefore you have to pay the mileage fee.
They are extending the contract and that means they have to extend the mileage allowance as well. That means that on an average of 5000 miles a year as has already been pointed out, it should come with an additional 416 miles per month. Because the mileage allowance is calculated on the duration of the entire contract – not simply a monthly allowance, it would not be possible to understand exactly what your mileage allowance would be until you had the car back but it would be calculated on the basis of number of months multiplied by 416. Plus of course your existing unused allowance.

So does that sound reasonable to you that you pay the £75 a month? Is that what you're paying now anyway for the lease of the vehicle?

The only thing which might feel a bit unfair is that you are now paying £75 per month for an old vehicle when in fact you should transfer to a new one.

I asked you earlier how much you are paying for this existing vehicle and how much you are paying for the new one and for some reason or other you haven't answered. Is it a secret?

[kkatiew]

Thanks. I’m paying £306 at the moment and £400 for the new car. 
 

I just don’t think it’s fair to be paying £306 plus £75 as if my new car had arrived as expected then I would just be using the new mileage allowance.

[kkatiew]

I don’t think I ever had a contract with the dealer - I don’t even know who that is. The t&c and agreement is the only paperwork I can find.

 

can you delete my attachments - just noticed it’s got my name etc on them.

 

Thanks

[dx100uk]

put up a redacted version and i'll swap them

you.ve pworded the pdf so cant edit it for you

[kkatiew]

SIneo +55821100613090.pdfHi dx,  Edited version now attached.  Can you replace with the ones that are showing please ?

 

Thanks

 

Katie

[kkatiew]

So just had an email

today confirming that I will be allowed 416 miles per month mileage until

the new car arrives and not have to pay the additional 7.5pm per mile

[dx100uk]

well done!

[BankFodder]

Absolutely the correct result.

Well done just be careful that later on some bean counter doesn't like to see that you are now eating into your new mileage allowance.