Not upheld: Travel / life insurance claim disputes complaint against BMW FINANCIAL SERVICES (GB) LIMITED

Decision detail

Summary

Mr A purchased a new car for £47,679.79 under a hire purchase agreement with BMWFS, paying a £7,500 deposit and receiving a £1,500 deposit allowance. After making three monthly payments, Mr A rejected the car on 7 August 2025 due to unsatisfactory quality and entered into a replacement agreement on 1 September 2025. BMWFS refunded Mr A's payments and deposit totalling £9,461.33 by October 2025. Mr A complained that BMWFS should also pay him the £1,500 deposit allowance and additional compensation for distress and inconvenience. The ombudsman found that the deposit allowance was not a personal loss and that the compensation already paid was fair and reasonable, rejecting the complaint.

The Ombudsman's reasoning

The ombudsman applied the Consumer Rights Act 2015, which implies that goods must be of satisfactory quality and durable. While the car's unsatisfactory quality was not disputed, the ombudsman focused on whether compensation was adequate. The ombudsman rejected the claim for the £1,500 deposit allowance as it was not a sum paid from Mr A's own funds and therefore did not represent a loss. The ombudsman found that BMWFS had already paid appropriate compensation comprising refunds of payments for periods without use, a 20% deduction for loss of enjoyment during the period of use, reimbursement of other costs (£101.45), and £300 for distress and inconvenience. The total compensation of £9,461.33 (including 8% annual simple interest on refunds) was deemed fair and reasonable given that Mr A was never without a car and exceeded his mileage allowance.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website