Upheld: Other regulated complaint complaint against MotoNovo Finance Limited

Decision detail

Summary

Mr M complained that MotoNovo Finance Limited failed to disclose material information about a used car he acquired under a hire purchase agreement in February 2022. In April 2025, when attempting to part-exchange the car, an HPI check revealed it had been classified as Category U - Unrecorded and recovered to salvage in April 2021, causing the part-exchange valuation to drop from £9,500 to £5,350. The ombudsman found that dealership P had warranted they undertook an HPI check, which would have revealed this information, but failed to disclose it to Mr M. As MotoNovo is responsible for P's actions, the ombudsman upheld the complaint and ordered MotoNovo to pay Mr M £4,150 (the difference in part-exchange value) plus 8% interest and £200 compensation for upset.

The Ombudsman's reasoning

The ombudsman found that P's failure to disclose the Category U classification and salvage history constituted a misleading omission under consumer protection law. The HPI check undertaken by P (as stated in their warranty) would have revealed this information. MotoNovo is responsible for P's actions as the car was supplied under a hire purchase agreement. The ombudsman was satisfied that Mr M would not have entered the agreement had he been informed of the car's true history, and that the reduction in part-exchange value from £9,500 to £5,350 was a direct consequence of the non-disclosed information. The ombudsman rejected the argument that Category U status meant the car was unfit for purpose, but upheld the complaint on the basis of misleading omission.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website