Upheld: PCP / HP mis-selling complaint against Zenauto Limited

Decision detail

Summary

Mr G complained that Zenauto required him to arrange an MOT before returning a hire car at the end of a 36-month agreement, despite the MOT not expiring until the day after the agreement ended. Zenauto claimed this was a contractual requirement but failed to demonstrate it was clearly communicated before Mr G entered the contract. Although Zenauto offered to pay the MOT cost, Mr G initially refused as he considered it his responsibility and was concerned about potential repair costs. The ombudsman upheld the complaint, finding Zenauto should have clearly set out the MOT requirement before contract formation, but limited the remedy because Mr G failed to mitigate losses by not arranging collection promptly after obtaining the MOT, instead continuing to use the car for an additional 400 miles.

The Ombudsman's reasoning

The ombudsman found that while Zenauto's terms required the car to be returned in good condition, Zenauto failed to clearly demonstrate that the MOT requirement was a term of the contract before Mr G entered into the agreement. However, the ombudsman found Mr G did not adequately mitigate his losses as he was able to arrange the MOT in time (completed 9 September) but did not arrange collection until 23 September, during which time he continued to use the car (covering approximately 400 additional miles). The ombudsman therefore upheld the complaint but limited the remedy to refunding the base MOT cost and awarding £150 compensation for inconvenience, rejecting claims for additional rental charges and insurance costs as Mr G had continued to use the car.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website