Not upheld: misrepresentation of hire agreement terms and alleged breach of contract regarding purchase option complaint against Motability Operations Limited

Decision detail

Summary

Mrs Y complained that Motability misrepresented a hire agreement by telling her she could purchase the car at the end of the lease term. She had paid over £5,000 for optional extras expecting to eventually own the vehicle. When she attempted to purchase the car in 2025, Motability refused, stating it had changed its policy in November 2023 to no longer allow purchases. The ombudsman found that the hire agreement was not a hire purchase agreement and contained no contractual right to purchase. Motability's terms and website indicated purchase was only discretionary ('may be possible'), and while Motability had previously offered this option as goodwill, it was not obligated to continue doing so. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the hire agreement was not a hire purchase agreement and therefore did not confer a contractual right to purchase the car. The terms and conditions clearly stated the vehicle would not become Mrs Y's property and must be returned at the end of the term. Motability's website stated purchase 'may be possible' rather than guaranteeing it as a right. While Motability had previously offered purchase options as discretionary goodwill, it was not contractually obligated to do so and was free to remove this option. The ombudsman concluded that Mrs Y was more likely told 'it may be possible to buy' rather than that she had a guaranteed right to purchase. Motability acted within its contractual and regulatory rights by changing its discretionary policy. The administrative error and subsequent £150 compensation was addressed appropriately.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website