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.

 

[FlashingBlade]

I suspect the finance company will treat that as you handing the car back at the end of the PCP and will collect it as such. The finance agreement and manufacturers warranty are two different products and there's no connection between them. Lotus HQ wont care about the finance, they've already been paid by CA

 

[PJS]

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?

Hi - keen to know how receptive you find CA. My balloon is due Feb and i may try to negotiate a years extension providing I can extend the warranty. .

 

[jonsealsportscars]

I would strongly advise against this course of action. You may think its a protest against Lotus but the bank agreement you have and the car are two separate things. Speak to the bank you might be able to get a rebait for time the car has spent off the road but if you simply fail to make a payment it could go on your credit file. Whatever you do open dialogue with the bank dont just default on it.

 

[912Matt]

Just to be clear, I have made an official complaint to CA, and threatened not to make the balloon payment (it isn’t due yet). They will now have to follow their complaints procedure, and provide me with a response, at which point I will have the option to go to FOS. I am not going to risk my credit rating, but am aware from friends in the industry that the FCA don’t need a huge amount of provocation to find against finance companies where there are issues with a financed car, so think it’s worth rolling the dice rather than simply stumping up for piss poor customer service. TBH, this protection was one of the reasons I put a bit on finance in the first place. Whilst the car and the finance are separate, they are linked as a result of CRA 2015. FOS seems to have more teeth than the Motor Ombudsman, hence pursuing this route first. I will post an update when I hear further.

 

[jonsealsportscars]

All this stuff takes time to resolve though and you are just a number with a bank so if you default on it you'll get a marker on your credit file. threatening to withhold payment over a customer service issue with the car maker is a separate issue to the finance agreement you have taken out. I would go for recourse afterwards option if it was me. You may well be in the "right" but the banks are just machines and will just follow their own process.

 

[912Matt]

CA have to provide a response within 8 weeks, which falls well before the payment is due. Have attached screenshot from FCA’s own website that clearly states that the finance provider is deemed to be the supplier, and is therefore responsible for the quality of the car.

 

[schuey100]

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.

Correct, you’ll end up
with a ccj

 

[jonsealsportscars]

CA have to provide a response within 8 weeks, which falls well before the payment is due. Have attached screenshot from FCA’s own website that clearly states that the finance provider is deemed to be the supplier, and is therefore responsible for the quality of the car.

None of this stuff matters to the bank. You will need their prior agreement to default on payment don't forget if you are in breach of contract if you don't pay.

 

[Rupes]

This isn't a game I would want to play, but I also understand your frustration.

I imagine your case would be stronger if the car wasn't functioning vs something cosmetic. Especially since there is a queue for a solution, but you don't want to wait for it.