Withholding Ballon Payment

[912Matt]

The balloon payment on my Emira is due next month.
As a result, I have been in touch with my local Lotus SC to have the outstanding warranty issues sorted before making the payment.
Unfortunately, I have been told that the warranty work (specifically blistered doors) is on hold due to backlogs.
I have therefore emailed the finance provider (CA Autobank) to let them know I won’t be making the balloon payment until the work has been completed to my satisfaction.
Just wondering if anyone in the UK been down this route previously?

 

[Six Speed Stephen]

I'm not familiar with the UK balloon payment, or UK law so take this for what it is...

But in the US, unless these two things are specifically tied together, you can't withhold payment for X because of Y. Given that the warranty is provided by the manufacturer, and the finance agreement is handled by the dealer/bank, you shouldn't be able to legally withhold payments, unless the two are explicitly tied together, which they likely aren't.

 

[912Matt]

Yes, my understanding is that the UK favours the buyer to a greater degree than in the US. The finance provider is on the hook for faults, alongside the manufacturer, and we have recourse to the FCA in disputes. Appreciate my position is weaker after owning the car for 2 years, and I’m not looking to reject the car, it just seems to me that if I make the final payment I will lose a good deal of my leverage when it comes to getting the issues fixed.

 

[Six Speed Stephen]

Yes, my understanding is that the UK favours the buyer to a greater degree than in the US. The finance provider is on the hook for faults, alongside the manufacturer, and we have recourse to the FCA in disputes. Appreciate my position is weaker after owning the car for 2 years, and I’m not looking to reject the car, it just seems to me that if I make the final payment I will lose a good deal of my leverage when it comes to getting the issues fixed.

How closely are the warranty and the payment tied together? For example, if your warranty was voided by Lotus because of modifications, does that mean you'd no longer owe payment?

 

[912Matt]

I would imagine that if you’ve caused the warranty to be voided by modifying, that would be down to you.

 

[crestima]

I'm not familiar with the UK balloon payment, or UK law so take this for what it is...

But in the US, unless these two things are specifically tied together, you can't withhold payment for X because of Y. Given that the warranty is provided by the manufacturer, and the finance agreement is handled by the dealer/bank, you shouldn't be able to legally withhold payments, unless the two are explicitly tied together, which they likely aren't.

Yes, in the States that's pretty much how it works with vehicles' financing whereby contractual obligations, rights and responsibilities under a loan agreement fall directly, and in most cases exclusively, between buyer(s) and the financing entity which, for the most part, is a bank. Direct dealer financing is much less common. Can't help not sympathizing with @912Matt's position, but unless it's different in the UK, I also suspect he has no recourse.