Upheld: unsatisfactory quality of goods (vehicle) supplied under hire purchase agreement complaint against RCI Financial Services Limited
Financial Ombudsman decision DRN-6357835 of 2026-05-13T00:00:00+00:00. unsatisfactory quality of goods (vehicle) supplied under hire purchase agreement complaint against RCI Financial Services Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6357835 |
|---|---|
| Decision date | 2026-05-13T00:00:00+00:00 |
| Firm | RCI Financial Services Limited |
| Product | hire purchase agreement (vehicle finance) |
| Claim type | unsatisfactory quality of goods (vehicle) supplied under hire purchase agreement |
| Outcome | Upheld |
| Remedy | RCI Financial Services Limited must: (1) arrange collection of vehicle within reasonable timeframe at no cost; (2) terminate agreement with nothing further to pay; (3) refund payments made since return of courtesy car; (4) reimburse costs for attempted repairs, diagnosis, and storage since 31 July 2025 with proof; (5) pay 8% simple interest per year on all refunds and reimbursements from date of payment to settlement; (6) remove adverse credit file information if applicable; (7) pay £250 compensation for distress and inconvenience. |
Summary
Mrs A purchased a used electric vehicle via hire purchase with RCI in May 2023. In August 2025, the Power Delivery Module (PDM) failed after 36,000 miles and approximately 2 years of ownership, with repairs quoted at £6,000. RCI refused to allow rejection, citing the failure occurred outside the warranty period. The ombudsman upheld Mrs A's complaint, finding the vehicle was not of satisfactory quality because a reasonable consumer would not expect such a major component to fail within 14 months of warranty expiry on a low-mileage vehicle. Considering Mrs A's loss of use, financial hardship from leasing an alternative vehicle, and loss of confidence in the vehicle, the ombudsman directed RCI to terminate the agreement and collect the vehicle, refund payments made without use, reimburse repair and storage costs, pay interest and £250 compensation.
The Ombudsman's reasoning
The ombudsman concluded that although warranty periods represent expected component lifespans, a reasonable person would expect a low-mileage vehicle to last longer than a high-mileage vehicle and to cover the mileage limit before suffering major failures. The PDM is a key component, and its failure 14 months after warranty expiry and 24,000 miles before mileage limit expiry constitutes a major fault rendering the vehicle not of satisfactory quality. RCI provided no evidence that external factors caused the damage. While RCI was initially entitled to attempt repair, the extended timeframe, Mrs A's loss of use, her financial hardship from leasing an alternative vehicle, and her loss of confidence in the vehicle's safety made rejection the fairer remedy.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| RCI Financial Services Limited, all decisions | 456 | 39% |
Source
Read the original decision on the Financial Ombudsman Service website