Upheld: quality of goods supplied under hire purchase agreement; breach of Consumer Rights Act 2015 complaint against Mercedes-Benz Financial Services UK Limited

Decision detail

Summary

Mr J purchased a new Mercedes-Benz car through a hire purchase agreement with MBFS for £78,635 in September 2024. The vehicle developed multiple faults including persistent sensor issues, unexpected braking engagement, and head-up display failure, requiring four dealership visits for repairs. Although Mr J made two earlier rejection requests, MBFS refused them until agreeing to rejection approximately nine months after supply. The ombudsman upheld the complaint, finding the car was not of satisfactory quality at supply and that Mr J should have been allowed to reject it earlier. MBFS was instructed to refund the deposit, refund 50% of all monthly payments, pay £500 compensation, and pay 8% simple interest on refunds, recognizing that the persistent faults substantially impaired Mr J's use and enjoyment of the vehicle.

The Ombudsman's reasoning

The ombudsman found that the car was not of satisfactory quality at the point of supply, as a reasonable person would expect a brand new premium vehicle priced at £78,635 to be free from defects. The faults (sensor issues, braking interference, steering problems, head-up display failure) were persistent and caused significant loss of enjoyment, evidenced by Mr J's reduced usage. A 50% refund of monthly payments was fair because the faults substantially impaired the driving experience on every journey, and Mr J was wrongly denied earlier rejection opportunities. The £500 compensation reflected the distress and inconvenience of being forced to endure these issues longer than necessary.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website