BMW Financial Services (GB) Limited · DRN-6134203

The complaint Mrs T is unhappy that a car supplied to her under a hire purchase agreement with BMW Financial Services (GB) Limited trading as Alphera Financial Services (‘BMWFS’) was of an unsatisfactory quality. Mrs T has been represented during the claim and complaint process by Mr S. For ease of reference, I will refer to any comments made, or any action taken, by either Mrs T or Mr S as “Mrs T” throughout the decision. What happened In April 2024, Mrs T was supplied with a used car through a hire purchase agreement with BMWFS. She paid an advance payment of £2,000 and the agreement was for £11,770 over 49 months; with 48 monthly payments of £183.02 and a final payment of £7,254. At the time of supply, the car was just over three years old and had done 32,567 miles (according to the agreement). The car broke down due to a broken camshaft drive chain in February 2025 when it had done 47,753 miles – around 15,000 miles since it was provided to Mrs T. Mrs T arranged for the car to be inspected by an independent engineer, and this inspection took place on 24 June 2025. The engineer confirmed the camshaft drive chain had failed, and that this failure had been accelerated by the lack of servicing of the car – the engineer incorrectly understood that the car hadn’t been serviced prior to the pre-sale service and said that the recent servicing would not reverse the existing chain wear. The engineer concluded that the camshaft drive chain failed prematurely, and this was linked directly to a known design flaw (a 7mm chain was fitted, and a retrograde repair option of upgrading this to an 8mm chain was available) and the lack of servicing before the car was supplied. As such, this “undermined durability and invalidated warranty coverage.” However, despite this apparent lack of servicing, the engineer still thought the car wasn’t sufficiently durable at the point of sale, and that the supplying dealership were responsible for this. Mrs T complained to BMWFS, but they didn’t uphold her complaint. They said the car wasn’t advertised as having a full-service history, and that Mrs T was able to drive the car more than 15,000 miles before the camshaft drive chain broke. They also said that, had the upgrade to an 8mm chain been necessary, the manufacturer would’ve issued a recall, but this didn’t happen. Unhappy with this response, Mrs T brought the matter to the Financial Ombudsman Service for investigation. Our investigator said that the camshaft drive chain had failed prematurely due to the lack of servicing, but had this part been failing when the car was supplied, Mrs T would not have been able to travel 15,000 miles. The investigator also said that Mrs T was aware of this lack of servicing when the car was supplied to her, and it wasn’t the responsibility of the dealership or BMWFS to provide detailed advice of what might potentially happen because of this. So, they didn’t think BMWFS were responsible for the costs of repair.

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Mrs T didn’t agree with the investigator’s opinion. She said that, due to the manufacturer’s recall and extended warranty covering the camshaft drive chain, she didn’t believe the issue was down to poor maintenance – there was a pre-existing fault with the car when it was supplied to her. Mrs T also provided a recall notice from the manufacturer, dated 10 November 2025, which said “our investigations have revealed that your vehicle may be affected by premature wearing of the camshaft drive chain, leading to abnormal noise or to a breaking of the chain in the worst case.” The letter explained that work was needed on the car, which may include the replacement of the chain, which would be carried out free of charge. The letter also made it clear that immediate action was required. The investigator didn’t think the additional information changed their opinion. I issued a provisional decision on 19 February 2025, where I explained my intention to uphold the complaint. In that decision I said: If I haven’t commented on any specific point, it’s because I don’t believe it’s affected what I think is the right outcome. Where evidence has been incomplete or contradictory, I’ve reached my view on the balance of probabilities – what I think is most likely to have happened given the available evidence and wider circumstances. In considering this complaint I’ve had regard to the relevant law and regulations; any regulator’s rules, guidance and standards, codes of practice, and (if appropriate) what I consider was good industry practice at the time. Mrs T was supplied with a car under a hire purchase agreement. This is a regulated consumer credit agreement which means we’re able to investigate complaints about it. The Consumer Rights Act 2015 (‘CRA’) says, amongst other things, that the car should’ve been of a satisfactory quality when supplied. And if it wasn’t, as the supplier of goods, BMWFS are responsible. What’s satisfactory is determined by things such as what a reasonable person would consider satisfactory given the price, description, and other relevant circumstances. In a case like this, this would include things like the age and mileage at the time of sale, and the vehicle’s history and its durability. Durability means that the components of the car must last a reasonable amount of time. The CRA also implies that goods must confirm to contract within the first six months. So, where a fault is identified within the first six months, it’s assumed the fault was present when the car was supplied, unless BMWFS can show otherwise. So, if I thought the car was faulty when Mrs T took possession of it, or that the car wasn’t sufficiently durable, and this made the car not of a satisfactory quality, it’d be fair and reasonable to ask BMWFS to put this right. The evidence is clear that the camshaft drive chain has failed on the car, and that the car was fitted with the 7mm chain, not the upgraded 8mm chain. The 7mm chain fitted to the car had an expected lifespan of 60,000 to 100,000 miles. And it failed before this. The manufacturer’s service schedule is for the oil to be changed every 12-months or 20,000 miles, whichever is sooner. Failing to service the car in line with this schedule could result in oil degradation, meaning that the engine could suffer premature wear and is therefore at risk of early failure of key components, such as the camshaft drive chain. The car was first registered in December 2020. I’ve seen information from the supplying dealership, dated 31 March 2025, that shows the car was serviced on 26 July 2023 (at 15,726 miles), and on 14 November 2024 (at 21,455 miles). The independent engineer was

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not aware of this when they reached their conclusions about the lack of servicing. However, I’m not satisfied this information is entirely reasonable to rely upon, and I’ll explain why. The MOT history shows the car had done 32,277 miles at the time of the MOT test on 6 November 2023. And it’s not disputed there was a pre-sale service in early 2024, when the car had done around 32,567 miles. What’s more, the MOT test that took place on 31 October 2024 shows a recorded mileage of 41,304 miles. Given this, it would not be possible for the car to be serviced on 14 November 2024 at only 21,455 miles. It also means that the car would’ve had to have travelled 16,841 miles between the dealership recorded service on 26 July 2023, and the MOT test on 6 November 2023 – over 1,000 miles a week which, while possible, is unlikely given the rest of the mileage history. This means that the service history supplied by the dealership is incorrect, with it being most likely that the dates are wrong. I’ve also seen that Mrs T has asked for proof of when these services took place, as this was needed in relation to the recall notice. However, the dealership has failed to provide this. When looking at the patently incorrect dates, I think it’s most likely that the car was serviced in July 2022 (at 15,726 miles) and in November 2023 (at 21,455 miles). With a registration date of December 2020, this would mean the December 2021 service took place around 7- months late, and the subsequent July 2023 service took place around 4-months late. However, the car was then serviced in early 2024 (the pre-sale service), and in January 2025 (by Mrs T at 46,034 miles). While these services haven’t taken place within the 12-months part of the schedule, the car has been serviced less than every 20,000 miles, the manufacturer’s other servicing trigger point. Therefore, taking this along with the recall letter and the independent engineer’s report (which was done without the knowledge of these two additional services), I’m satisfied the failure of the camshaft drive chain is unlikely to be because of a lack of servicing, instead being the result of a durability issue with the car when it was supplied to Mrs T. And this makes the car of an unsatisfactory quality when it was supplied. For completeness, I’ve also taken into consideration section 56 of the Consumer Credit Act 1974. This states that any negotiations conducted by the credit broker or supplier of goods are deemed to be conducted in the capacity of an agent of the creditor, and that this includes all communications (including the advert) and representations made. This means that, in this case, if it turns out that the servicing information dated 31 March 2025, and provided to Mrs T at the point of supply by the dealership, is incorrect, the dealership provided false information as an agent of BMWFS, for which BMWFS remain liable. So, given the above, I’m satisfied that BMWFS need to do something to put things right. Following the recall notice, the car has been inspected by a manufacturer’s approved garage. However, no decision on whether the car will be repaired has yet been made, and the hold-up is the dealerships failure to provide the evidence to support the service history information they’ve provided. Section 24(5) of the CRA allows for the single chance of repair. The recall notice is clear that repair is needed, but this is being held up by the dealership’s inaction. As I’ve said, as this directly relates to information supplied when they were acting as an agent of BMWFS, BMWFS are responsible for this. Section 23(2) of the CRA states “If the consumer requires the trader to repair or replace the goods, the trader must (a) do so within a reasonable time and without significant inconvenience to the consumer.” As Mrs T has not had use of the car for more than a year,

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and as things cannot move forward due to the intransigence of the dealership (acting for BMWFS), I’m satisfied that BMWFS have failed to comply with Section 23(2)(a) of the CRA. So, Mrs T should now be able to reject the car. The car has been off the road and undrivable since 14 February 2025, and since this date Mrs T hasn’t been provided with a courtesy car. So, she was paying for goods she was unable to use. As, for the reasons already stated, I’m satisfied the car was off the road due to it being of an unsatisfactory quality when it was supplied, and as BMWFS failed to keep Mrs T mobile; I’m satisfied they should refund the payments made since this date. Mrs T has also incurred the costs of having the car independently inspected. Given that the car wasn’t of a satisfactory quality when supplied, I think it’s only fair that BMWFS reimburse these costs. I also think Mrs T should be compensated for the distress and inconvenience she’s been caused. But crucially, this compensation must be fair and reasonable to both parties, falling in line with our service’s approach to awards of this nature, which is set out clearly on our website and so, is publicly available. Having considered all the facts and evidence, I think £300 is fair and falls in line with our service’s approach. So, this is a payment I intend to ask BMWFS to make. Therefore, I intend to ask BMWFS to: • end the agreement, ensuring Mrs T is not liable for any monthly payments after the point of collection (if any payments are made, these should be refunded); • collect the car at no collection cost to Mrs T; • remove any adverse entries relating to this agreement from Mrs T’s credit file; • refund the deposit Mrs T paid (if any part of this deposit is made up of funds paid through a dealer contribution, BMWFS is entitled to retain that proportion of the deposit); • refund the payments Mrs T has made for the period 14 February 2025 until the agreement has ended; • upon receipt of an invoice and proof of payment, reimburse Mrs T for the cost of the independent engineer’s report of 24 June 2025; • apply 8% simple yearly interest on the refunds and reimbursements, calculated from the date Mrs T made the payments to the date of the refund; and • pay Mrs T an additional £300 to compensate her for the trouble and inconvenience caused by being supplied with a car that wasn’t of a satisfactory quality. Responses Mrs T accepted my provisional decision. She referred to the additional costs she’d incurred since the car broke down. However, she said that she didn’t want to pursue these. BMWFS chose not to respond to my provisional 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. While Mrs T has said she doesn’t wish to pursue the additional charges, I have considered these when making my final decision.

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Mrs T feels she should be refunded the cost of insuring the car since 14 February 2025. However, I don’t agree these costs should be refunded, and I’ll explain why. While the car has been off the road since 14 February 2025, it’s a legal requirement that a motor vehicle is insured. This is needed whether the vehicle is being driven or not. The insurance covers the vehicle for risks not associated with being driven, i.e., fire, theft, and third-party damage, so Mrs T was still benefitting from the insurance payments, including building/maintaining a no claims discount, whether she was driving the car or not. Mrs T has referred to recovery costs, mechanic’s time, and storage fees, but I haven’t seen any evidence of any such costs being incurred. However, if there are any storage costs, these would be the responsibility of BMWFS as the dealership (acting on their behalf) have unreasonably delayed matters by failing to supply evidence to support the service history they supplied, which would’ve allowed the car to be repaired under the manufacturer’s recall. As such, Mrs T’s comments don’t change my view, and I see no compelling reason why I shouldn’t now adopt my provisional decision as my final decision. So, BMWFS need to do something to put things right. Putting things right For the reasons stated, BMWFS should: • end the agreement, ensuring Mrs T is not liable for any monthly payments after the point of collection (if any payments are made, these should be refunded); • collect the car at no collection cost to Mrs T; • remove any adverse entries relating to this agreement from Mrs T’s credit file; • refund the deposit Mrs T paid (if any part of this deposit is made up of funds paid through a dealer contribution, BMWFS is entitled to retain that proportion of the deposit); • refund the payments Mrs T has made for the period 14 February 2025 until the agreement has ended; • upon receipt of an invoice and proof of payment, reimburse Mrs T for the cost of the independent engineer’s report of 24 June 2025; • apply 8% simple yearly interest on the refunds and reimbursements, calculated from the date Mrs T made the payments to the date of the refund; and • pay Mrs T an additional £300 to compensate her for the trouble and inconvenience caused by being supplied with a car that wasn’t of a satisfactory quality. †If HM Revenue & Customs requires BMWFS to take off tax from this interest, they must give Mrs T a certificate showing how much tax they’ve taken off if she asks for one. My final decision For the reasons explained, I uphold Mrs T’s complaint about BMW Financial Services (GB) Limited trading as Alphera Financial Services. And they are to follow my directions above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs T to accept or reject my decision before 6 April 2026. Andrew Burford Ombudsman

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