Partially upheld: unfair deduction for car usage and handling of rejection/refund process complaint against Hyundai Capital UK Limited trading as Hyundai Finance

Decision detail

Summary

Mrs C complained that Hyundai Finance handled the rejection of her car unfairly and applied an unreasonable mileage-based deduction of £1,233.90 at 45 pence per mile for car usage. After faults developed in December 2024, Hyundai eventually agreed in March 2025 that the car was not of satisfactory quality and Mrs C could reject it. The ombudsman found that while Hyundai acted reasonably in requiring return of the V5 and spare key before issuing the full refund and the refund timing was acceptable, the mileage-based deduction was unfair. The ombudsman determined that fair usage should be calculated based on Mrs C's monthly repayments of £169.05 applied pro-rata from supply date to 14 March 2025 (when the courtesy car was returned), as Mrs C continued to have use of a vehicle throughout this period. Hyundai was instructed to recalculate the usage charge and refund any overpayment with interest, and to ensure Mrs C received £400 total compensation for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that while Hyundai acted reasonably in requiring return of documentation and keys before issuing full refund, and the timing of refund was not unreasonable given the circumstances, the mileage-based deduction of 45 pence per mile was not fair or proportionate. The ombudsman rejected both Hyundai's mileage approach and Mrs C's expected lifespan approach. Instead, the ombudsman determined that fair usage should be calculated based on monthly repayments applied pro-rata for the period Mrs C had use of a car (from supply date to 14 March 2025 when the courtesy car was returned), as Mrs C continued to have use of a vehicle throughout this period despite the fault. The ombudsman was satisfied that £400 total compensation (£150 + £250) fairly reflected the distress and inconvenience caused.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website