Volkswagen Financial Services (UK) Limited · DRN-6236142

The complaint Mrs R complains about the quality of a car she acquired under a hire agreement with Volkswagen Financial Services (UK) Limited (VWFS). She also feels that the car has been mis-sold to her. When I refer to what Mrs R and VWFS said or did, it should also be taken to include things said or done on their behalf. What happened In May 2024, Mrs R entered into a hire agreement with VWFS to acquire a new car which was supplied in June 2024. Mrs R had to pay an advance rental of £3,140.51 which was to follow by 47 monthly rentals, each in the amount of £283.42. Mrs R said she had issues with the car since the beginning. She feels it does not work properly. She was unhappy that the car over-revs when going uphill and it fails to change gears. She has brought it to a garage a few times, however, she has been told it’s a characteristic of the car. Mrs R said when she test drove a car it was a different model, but she was told that it has the same engine and gearbox as the one she was ordering (the car which is the subject of this complaint), therefore, she said, she believed that it would drive the same. She also said that the supply dealership confirmed to her in writing that the car she ordered (a mild hybrid) would perform similarly to the plug-in hybrid she test-drove. She said the driving experience has been noticeably different, particularly in the way the gearbox behaves and how the car delivers power. She feels that the salesperson and the supply dealership provided her misleading information that caused her to make a decision she otherwise would not have made. She said she relied on the representations made by the salesperson when deciding to proceed with the agreement. As she was unhappy, she raised a complaint with VWFS. On 10 July 2025, VWFS responded to Mrs R’s complaint. They said that on 22 June 2024, Mrs R reported that the car start/stop system was kicking in while still in drive, causing the engine to appear to stop and the car to jump between gears. VWFS said no repairs were performed, as the fault could not be replicated. On 29 June 2024, they said Mrs R reported the car jumping between gears, which, she said, was more noticeable when moving from higher to lower gears. But again, no faults were found during inspection. On 21 March 2025, VWFS said Mrs R reported the car was holding gears when going downhill. Upon carrying out a guided fault finding, again, no faults were found. In that correspondence VWFS said that no faults could be confirmed with the gear selector of the car and it appeared that the car was operating normally. As such, Mrs R was experiencing what are characteristics of the model of the car she acquired. However, in recognition of the amount of time Mrs R’s car had to go into the dealership without a courtesy car provided to her, they said they are happy to offer her one month rental at £283.42 for the loss of enjoyment she had experienced, and a further £100 for the distress and inconvenience caused.

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Mrs R was unhappy with VWFS’s response. As such, she brought her complaint to Financial Ombudsman Service (Financial Ombudsman). Our investigator did not think that VWFS needed to take any further action in relation to Mrs R’s complaint. Mrs R did not accept the investigator’s outcome. As such, the complaint has been passed to me to decide. After reviewing the case, I issued a provisional decision on 4 February 2026. In the provisional decision I said: ‘‘What I’ve provisionally 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 is fair and reasonable, I need to take into account the relevant rules, guidance, good industry practice, the law and, where appropriate, what would be considered good industry practice at the relevant time. Mrs R acquired the car under a hire agreement, which is a regulated consumer credit agreement. Our service can look at these sorts of agreements. VWFS is the supplier of goods under this type of agreement and is responsible for dealing with complaints about their quality. I know that Mrs R is unhappy about certain actions/inactions of certain dealerships where the car was being repaired. However, I can only consider actions/inactions of VWFS, and only the aspects they are responsible for and the ones that they have had an opportunity to address. As such, I cannot look at certain actions and/or inactions of the dealership which Mrs R might be unhappy about. In this decision I only focused on the aspects I can look into, and only the events that have been raised by Mrs R with VWFS, and the ones they had the opportunity to address in their final response issued to her on 10 July 2025. The Consumer Rights Act 2015 (CRA) covers agreements such as the one Mrs R entered into. Under this agreement, there is an implied term that the goods supplied will be of satisfactory quality. The CRA says that goods will be considered of satisfactory quality where they meet the standard that a reasonable person would consider satisfactory – taking into account the description of the goods, the price paid, and other relevant circumstances. I think in this case those relevant circumstances include, but are not limited to, the age and mileage of the car and the cash price. The CRA says the quality of the goods includes their general state and condition, as well as other things like their fitness for purpose, appearance and finish, freedom from minor defects, safety, and durability. In Mrs R’s case the car was brand new. As such, I think a reasonable person would expect it to be of a higher quality than a cheaper and/or previously used car. I think it would also be reasonable to expect the car to last a considerable period of time before any problems occurred, and it would be reasonable to expect it to be free from even minor defects shortly after it was acquired. In summary, Mrs R feels car over-revs when going uphill and fails to change gears. I have considered everything Mrs R has told us about how the car performs. The CRA sets out that Mrs R has a short term right to reject the car within the first 30 days, if the car is of unsatisfactory quality, not fit for purpose, or not as described, and she would need to ask for the rejection within that time. Mrs R would not be able to retrospectively exercise her short term right of rejection at a later date.

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The CRA does say that Mrs R would be entitled to still return the car after the first 30 days, if the car acquired was not of satisfactory quality, not fit for purpose, or not as described, but she would not have the right to reject the car until she has exercised her right to a repair first – this is called her final right to reject. This would be available to her if that repair had not been successful. First, I considered if there were faults with the car. From the evidence on file, I can see that the car was diagnosed on a few occasions. It was checked, as Mrs R felt that the start/stop system was kicking in while still in drive, causing the engine to appear to stop and that the car was jumping between gears. However, it seems that no repairs were performed, as the fault could not be replicated at that time. I can see that on 21 March 2025, VWFS said Mrs R reported the car was holding gears when going downhill. During that visit I can see that a garage carried our basic setting of mechatronics and an adaptive road test. The paperwork states that this improved the gear selection and that following this adjustment, the car was operating all ok. Based on all of the above, I think the car was, most likely, faulty. However, just because a car was faulty does not automatically mean that it was of unsatisfactory quality when supplied. As such, I have considered if the car was of unsatisfactory quality when it was supplied to Mrs R. I have considered all the circumstances of this case, including the age, price and mileage of the car, combined with when the above issues were noted, and from the available evidence I think, most likely, the car was not of satisfactory quality when it was supplied to Mrs R. I say this because, I think, a reasonable person would expect the car to last a considerable period of time before any problems occurred, and a reasonable person would not expect the car to require repairs to its mechatronics so shortly after supply when the car had only travelled about 5,150 miles. Also, I think it would be reasonable to expect this type of a car to last a considerable period of time before any problems occurred. In this specific case, this car experienced the above issues very shortly after supply. I think it is fair to say that a reasonable person would not expect anything to be wrong with the mechatronics so early on. I know Mrs R said that she feels she should be able to reject the car, however, the repairs carried out appear to, most likely, have been successful. I know Mrs R said she now understands that the current behaviour of how the car performs is a characteristic of the type of hybrid that she acquired. Also, I have not seen any evidence that would allow me to conclude that, most likely, the car still has a fault that would render it of unsatisfactory quality. Based on the available evidence, it seems that when the car was having the issues looked at/repaired, Mrs R was not kept mobile in a courtesy car. However, I can see that VWFS has offered to refund one month’s rental (£283.42) for the loss of enjoyment she had experienced. I think this reasonably covers the loss of use she had during the time the car was having the issues looked at/repaired, plus the loss of enjoyment while she was driving with the fault in question. It also more than covers any 8% simple interest, I would have suggested in a similar situation, to be applied the refunded amount, from the date of payment to the date of settlement. As such, I do not think VWFS needs to make any further refunds except for the one monthly payment. However, I also considered that this matter has caused her distress and inconvenience while trying to resolve it. Mrs R had to take the car back to the dealership to be inspected and repaired. I think Mrs R would not have had to do this, had VWFS supplied her with a car that was of a satisfactory quality. However, I think their offer of £100 fairly reflects the impact this situation had on her.

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I know that Mrs R is also unhappy because, she believes, the supply dealership mis-sold her the car. In summary, Mrs R said when she test drove a car it was a different model, but she was told the car she was ordering (a mild hybrid) would perform similarly to the plug-in hybrid she test-drove. She said the driving experience has been noticeably different, particularly in the way the gearbox behaves and how the car delivers power. She feels that the salesperson and the supply dealership provided her misleading information that caused her to make a decision she otherwise would not have made. She said she relied on the representations made by the salesperson when deciding to proceed with the agreement. As such, I have also considered if VWFS had any responsibility for anything that the supply dealership/broker might have told Mrs R regarding the two types of cars performing in a similar way. In doing so I have considered, among other aspects, if Section 56 of the Consumer Credit Act 1974 would apply here. Section 56 deals with “antecedent negotiations” and it explains that finance providers are liable for what they say and for what is said by a credit broker or a dealership (in certain circumstances) before the consumer takes out a credit agreement. However, considering all the circumstances of this case, I think most likely, this section does not apply. I say this because I have not seen enough evidence to be able to say that VWFS was acting as a negotiator with respect to the antecedent negotiations. In addition, I have considered common law principles of agency to establish whether the dealership/broker acted with authority, or apparent authority, on behalf of VWFS. I have not seen enough evidence to say that this, mostly likely, was the case. Also, I have not seen evidence to show that Mrs R directly dealt with VWFS or discussed the proposed transaction with them before she entered into the hire agreement. As such I think, most likely, it was the dealership/broker who Mrs R dealt with, and I do not think the dealership/broker was acting as VWFS’s agent in this particular case. Considering the above and the circumstances of this specific case, I have not seen enough to be able to say that, most likely, VWFS authorised the dealership/broker to act as their agent or that the dealership/broker acted with actual or apparent legal authority on behalf of VWFS. As such, I do not think it would be reasonable for me to hold VWFS liable for the actions of the dealership/broker considering the circumstances of this specific case. While I appreciate Mrs R’s strength of feeling regarding this part of her complaint, I do not think it is fair or reasonable for me to require VWFS to take any further action regarding what the salesperson at the dealership might have told her. While I sympathise with Mrs R for the difficulties that she is experiencing, based on the available evidence, as well as the specific circumstances of this case, I do not think it would be fair or reasonable to ask VWFS to do anything more than what they have already offered to pay. My provisional decision For the reasons given above I intend to say that I uphold this complaint and direct Volkswagen Financial Services (UK) Limited to: - Refund Mrs R one monthly payment of £283.42 if this has not yet been done. - Pay Mrs R a total of £100 compensation for distress and inconvenience caused if this has not yet been paid.’’ I asked both parties to provide me with any additional comments or information they would like me to consider by 18 February 2026.

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VWFS accepted my provisional decision. Mrs R provided further comments. 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. Following my provisional decision, Mrs R provided copies of correspondence she had with the supply dealership. She indicted it was not what the person at the dealership “might” have told her, as I stated in my provisional decision. Mrs R was trying to show exactly what was said. When I used the word “might” while recounting the relevant correspondence as provided in the evidence of this case, I was not trying to imply that the things she said were not said to her. I have seen the correspondence, and I do not doubt Mrs R had the email exchange she said she had with the dealership. But as I said in my provisional decision, I needed to consider if VWFS had any responsibility for anything that the supply dealership/broker might have told Mrs R regarding the two types of cars performing in a similar way. And that is why I considered, among other aspects, if Section 56 of the Consumer Credit Act 1974 would apply. As I explained Section 56 deals with “antecedent negotiations” and it explains that finance providers are liable for what they say and for what is said by a credit broker or a dealership (in certain circumstances) before the consumer takes out a credit agreement. However, considering all the circumstances of this case, I said that I think most likely, this section does not apply. And I still think that, most likely, it was the dealership/broker who Mrs R dealt with, and I do not think the dealership/broker was acting as VWFS’s agent in this particular case. As such, I do not think it would be reasonable for me to hold VWFS liable for the actions of the dealership/broker considering the circumstances of this specific case. That is why I do not think it is fair or reasonable for me to require VWFS to take any further action regarding what the salesperson at the dealership told or not told Mrs R. Therefore, while I still sympathise with Mrs R for the difficulties that she is experiencing, I still I do not think it would be fair or reasonable to ask VWFS to do anything more than what they have already offered to pay for the same reasons as stated above and in my provision decision. My final decision For the reasons given above, and in my provisional decision, I uphold this complaint and direct Volkswagen Financial Services (UK) Limited to: - Refund Mrs R one monthly payment of £283.42 if this has not yet been done. - Pay Mrs R a total of £100 compensation for distress and inconvenience caused if this has not yet been paid. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs R to accept or reject my decision before 16 April 2026. Mike Kozbial Ombudsman

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