Volkswagen Financial Services (UK) Limited · DRN-6121882

The complaint Mr B complains about the quality of a vehicle he acquired through a hire purchase agreement financed by Volkswagen Financial Services (UK) Limited trading as Audi Financial Services (VWFS). What happened In June 2022 Mr B acquired a used car through a hire purchase agreement financed by VWFS. The car was around four years old and had travelled about 31,000 miles at the time of supply. Mr B said he experienced some issues with the car in August 2022 including noise when steering, brakes and pads, air filter, transmission oil and tyres. The car was taken back to the dealership several times, and Mr B complained to VWFS in May 2023. VWFS sent Mr B a final response partially upholding his complaint in August 2023, and the car was returned to him in September 2023. Mr B said he began to experience issues with the car shaking excessively in March 2024. The car was recovered from the roadside and taken to a manufacturer garage. The garage told Mr B they needed a specialist key to open the engine and replace a part, and this would need to be ordered. Once the key was received, a part was replaced, but this didn’t fix the fault. Mr B complained to VWFS about the quality of the car and about how he’d been treated in July 2025, but VWFS said they’d addressed Mr B’s concerns in 2023 and wouldn’t look at this again, so Mr B referred his complaint to this service for investigation. Our investigator gave their view that they couldn’t look at the issues arising in 2022 and 2023 because Mr B hadn’t brought his complaint to us in time. But they were satisfied that the issue first occurring in March 2024 was separate, and as no final response had been issued by VWFS, it was a complaint we could consider. Our investigator went on to say they couldn’t reasonably conclude that the car was of unsatisfactory quality at the time it was supplied to Mr B, because there was no evidence that the fault was present when the vehicle was supplied to him. It appeared to relate to a cylinder which was a part that was subject to wear, and it didn’t appear to have failed prematurely. New evidence was then provided by the garage that they had opened the engine, and the fault related to a leak caused by poor sealing of an inlet valve and the valve seat, rather than the cylinder itself. Our investigator concluded that such a part is designed to last a significant length of the car’s lifespan and isn’t subject to regular service intervals. So, they thought its failure was premature, the car wasn’t reasonably durable, and therefore it wasn’t of satisfactory quality at the time it was supplied to Mr B.

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Our investigator thought that Mr B was entitled to his final right to reject the car. So, VWFS should end the agreement and collect the car, refund Mr B’s deposit plus interest, refund 20% of Mr B’s payments from March 2024 until the end of the agreement to reflect the loss of use and enjoyment plus interest, pay Mr B £400 compensation to reflect the distress and inconvenience caused and remove any adverse information from Mr B’s credit file. VWFS accepted our investigators recommendations. Mr B didn’t agree. He said, in summary, that the compensation and loss of use didn’t reflect the actual inconvenience he’d suffered. As an agreement can’t be reached, the case has been passed to me for a decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. In considering what’s fair and reasonable, I need to have regard to the relevant law and regulations. The agreement in this case is a regulated hire purchase agreement – so we can consider a complaint relating to it. VWFS as the supplier of the goods under this type of agreement is responsible for a complaint about their quality. The Consumer Rights Act 2015 (CRA) is relevant to this complaint. It says that under a contract to supply goods, there is an implied term that the “quality of the goods is satisfactory” To be considered “satisfactory” the goods would need to meet the standard that a reasonable person would consider satisfactory – taking into account any description of the goods, the price and other relevant factors. Those factors, in the case of a car purchase, will include things like the age and mileage of the car at the time of sale, and the car’s history. The quality of the goods includes their general condition and other things like their fitness for purpose, appearance and finish, safety and durability. Here the car was acquired used with a cash price of around £38,000. It was around four years old and had travelled about 31,000 miles at the time of supply. When a person acquires a used car like Mr B’s it’s reasonable to say that the expectation of quality is higher than that of an older, less expensive, higher mileage second-hand car. But there is still a chance of encountering an issue due to the nature of acquiring a second-hand car. The garage that inspected Mr B’s car concluded that the fault was caused by a leak because of poor sealing of an inlet valve and valve seat. This can lead to various engine issues such as those reported by Mr B. The parts in question here – seals of an inlet valve and valve seat – are made of durable materials. They aren’t subject to regular in-service maintenance or intervals and are expected to last the life of the engine itself. Poor maintenance of the vehicle itself can lead to early degradation of the seals, but I’ve seen evidence that Mr B has maintained the vehicle in line with the manufacturers recommended service intervals, and so I’m satisfied that poor maintenance was not a contributory factor to the fault. Mr B’s car was around six years old and had travelled about 49,000 miles at the time the fault occurred in March 2024. With this in mind, and the age, mileage and price of the car at

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the time Mr B acquired it, I don’t think a reasonable person would expect these parts to have failed so soon. So, I’m persuaded that the car wasn’t of satisfactory quality at the time it was supplied to Mr B, specifically that it wasn’t reasonably durable. Putting things right Having made that finding, I need to decide what, if anything, VWFS must do to put things right. The CRA sets out the remedies available where goods are considered not to be of satisfactory quality and one of the remedies is to allow an opportunity to repair the goods. A repair should be done in a reasonable time and without undue inconvenience to the consumer. Mr B first reported the fault in March 2024. A repair attempt was made once a specialist key had been received by the garage, but this wasn’t successful. It’s not clear if repairs to the seals have now been made, however Mr B has expressed his wish to reject the car. As VWFS had an attempt to repair the car, which didn’t return it to a satisfactory condition, and there was a significant period that Mr B was without his car for, I don’t think repairs were completed in a reasonable time or without undue inconvenience. All things considered, I’m satisfied that Mr B is entitled to his final right to reject the car. That means that VWFS should end the agreement ensuring that Mr B is not liable for monthly payments after the point of collection. VWFS should collect the car at no cost to Mr B and refund his deposit of £2,461, plus interest. Mr B has explained that the car he acquired was used for long distance family trips, and travel overseas as the agreement permitted. However, the courtesy cars he was provided with were often smaller, of a lesser spec, and he wasn’t permitted to take them overseas. VWFS don’t have to provide a courtesy car to Mr B, but I would expect to see a refund of his monthly payments for any periods that he was without a car at all. As Mr B was kept mobile in terms of daily and regular use of a car, I don’t think VWFS need to reimburse all of Mr B’s payments. I have considered whether the courtesy cars provided met Mr B’s needs. Whilst I haven’t seen the specifications of the cars provided, Mr B has explained that they were often of a lower specification and smaller than the car under the agreement. I think this, coupled with Mr B’s inability to be able to take the cars overseas, means that Mr B wasn’t always provided with something suitable. He was without a car with a significantly higher specification for a long period of time. All things considered, I find that VWFS should refund 20% of Mr B’s monthly payments from March 2024 until the agreement is ended to reflect this loss of use and enjoyment. Mr B has said that he’s faced costs in insuring the car and penalties for it not having tax or a valid MOT, that he shouldn’t have to pay as he didn’t have the car. I’ve thought about this carefully, and I’m not asking VWFS to refund these costs. The insurance is in place to protect the car and is a cost Mr B would’ve needed to pay for any car he was driving. I haven’t seen any evidence that Mr B paid twice for insurance costs, and so I’m not asking VWFS to refund the insurance Mr B has paid. Mr B was aware that he had the option to declare the car as SORN whilst it wasn’t in his possession. He didn’t do this, and so I don’t think he’s mitigated his losses in respect of any

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penalty he received for the car being untaxed or without an MOT, and so I’m not asking VWFS to refund these. Mr B has been put to distress and inconvenience in being supplied with a vehicle that wasn’t of satisfactory quality. He’s had to spend time having the faults diagnosed and he’s had to facilitate the return and collection of a number of courtesy cars. Mr B has explained the effect the situation has had on this mental health and the disruption to his family life. Our investigator recommended that VWFS pay Mr B £400 compensation to reflect this. All things considered, I think £400 fairly reflects the distress and inconvenience caused to Mr B. My final decision My final decision is that I uphold this complaint, and Volkswagen Financial Services (UK) Limited trading as Audi Financial Services must: • End the agreement ensuring that Mr B is not liable for monthly rentals after the point of collection. (It should refund any overpayment if applicable) • Take the vehicle back without charging for collection • Refund Mr B’s deposit of £2,461 plus 8% simple yearly interest from the date of payment to the date of settlement. (If any part of this deposit is made up of funds paid through a dealer contribution, VWFS is entitled to retain that proportion of the deposit.) • Refund 20% of Mr B’s monthly rentals from March 2024 to the date the agreement is ended, plus 8% simple yearly interest from the date of payment to the date of settlement. • Pay Mr B £400 compensation to reflect the distress and inconvenience caused • Remove any adverse information from Mr B’s credit file in relation to the agreement (if applicable) If VWFS considers that it’s required by HM Revenue & Customs to withhold income tax from the interest part of my award, it should tell Mr B how much it’s taken off. It should also give Mr B a tax deduction certificate if he asks for one, so he can reclaim the tax from HM Revenue & Customs if appropriate. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 16 April 2026. Zoe Merriman Ombudsman

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