Partially upheld: Goods and services under S75 complaint against BMW FINANCIAL SERVICES (GB) LIMITED TRADING AS BMW FINANCIAL SERVICES

Decision detail

Summary

Ms S purchased a new BMW car via hire purchase in January 2024 for approximately £44,330. Between August and November 2024, the car developed persistent brake defects requiring multiple repair attempts, leaving Ms S with limited use and eventually no use of the vehicle. Ms S repeatedly attempted to reject the car from September 2024 onwards, with a final unequivocal rejection on 25 November 2024. BMWFS unilaterally ended the agreement on 7 May 2025 and offered £700 compensation. The ombudsman upheld Ms S's right to reject the car as it was of unsatisfactory quality but rejected her requests for refunds of monthly repayments, road tax, and insurance, finding she had substantial use of the vehicle and was kept mobile during repairs. BMWFS was directed to pay £700 compensation and mark the credit agreement as settled in full as of 25 November 2024.

The Ombudsman's reasoning

Under the Consumer Rights Act 2015, goods supplied under a hire purchase agreement must be of satisfactory quality. For a new car with a cash price of £44,330, a reasonable person would have high expectations and would not expect significant defects shortly after acquisition. BMWFS did not dispute the car was of unsatisfactory quality, and the persistent brake defects that could not be repaired meant Ms S was entitled to reject the car. However, Ms S had substantial use of the car (5,827 miles in approximately 10 months, nearly reaching the annual mileage limit) and was kept mobile during repair periods, making it fair that BMWFS retain all monthly repayments. The £700 compensation already offered adequately covers distress, inconvenience, and interest on the refunded advance payment. Refunds for road tax and insurance are not warranted as Ms S was required to maintain these while using the car and continued to benefit from protection during the settlement period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website