Rejection charges

legal updates

We are often asked for guidance on what can be taken into account when calculating a deduction for use.

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In the event a trader accepts a final right to reject in accordance with s24 of the Consumer Rights Act 2015 following a failed repair, the trader is permitted under s8)(10)(a) CRA 2015 to make a deduction for the use the customer has had of that vehicle. 

In these circumstances, we are often asked for guidance on what can be taken into account when calculating a deduction for use.  We suggest a good starting point might be the mileage the customer has covered in the car.  The HMRC mileage allowance of 45p per mile up to 10,000 miles could be a good starting point, but in this HMRC takes into account what the user has already paid in tax and insurance for example, which the rejecting consumer will argue they have also paid.  Another way may be to consider what car hire for the same period for the same car may have cost, but again, a consumer will often argue the full cost of what a rental would have been is an inappropriate deduction.

The truth is, each case spins on its own set of particular circumstances and obviously the condition the car is being returned in plays a large part in the negotiations.  Consult the guides, consider the current condition, consider the mileage and the reason for the return of the vehicle as well as the length of time the customer may have been without the vehicle whilst the initial repairs were taking place.  When you accept a rejection make sure it’s done in full and final settlement and that the relevant documentation is signed and dated. 

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Octane Finance is the broker of choice for new and used car dealers nationwide. With our uncompromising service levels and our genuine and professional approach, you and your customers can trust us to deliver.

Polly DaviesLegal AdvisorRead More by this author

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