Car finance deals are gaining popularity in Britian
The car finance market is booming in the UK with around 80 per cent of cars bought thought to be on a lease deal. Finance offers motorists the chance to drive a brand new car for a monthly repayment and doesn’t require you to fork out the whole amount for a car upfront. They can, however, be confusing and hard to understand and navigate. One motorist found out the hard way that car finance could land you in trouble if you breach any clauses of the contract. One YouTuber found this out the hard way they decided to make modifications to their new BMW which they had received on finance.
The internet video creator Riccardo Senior, who hosts LiveLifeFast, managed to pick up a BMW M4 Competition Pack, which usually costs £68,000, on a steal of a deal.
It cost him £3,000 deposit, zero per cent interest and monthly payments of £610 on a PCP deal. The car in question has 44bhp, 0-62mph time of four seconds and 155mph top speed, making it quite the beast.
However, Senior has made some performance related modifications to the car to squeeze even more power out of the vehicle including a hybrid turbocharger, sports exhaust, and methanol injection.
All these mods increased the power by 276bhp to 720bp, which is what breached the terms of his finance deal.
“BMW are basically demanding full payment for my car by next week otherwise they are threatening to take it away from me.”
BMW got in touch with the YouTuber stating he had breached his finance agreement on two counts – modification and a belief from the finance team that he could not afford the payments.
“I think it’s pretty crazy – you can’t even modify your own car,’ Senior said in his video. “This whole time I’ve been breaching the agreement.”
Senior added: “I bought this car with the intention to modify it. Nothing was verbally said to me.
“One thing I definitely knew was that I was going to lose my warranty if I had an engine or gearbox problem. Whatever issues I had with the car I was prepared to fix these problems with myself.”
Taking into account the cost of the deposit and monthly payments, Senior could be forced to pay up to £50,000 to cover the bill.
A BMW spokesman told This is Money: “While we cannot comment on individual cases as we must take into account Data Protection Regulations we are happy to state the following regarding modifications to vehicles under a BMW Select agreement:
“A BMW Select (PCP) agreement is a Hire Purchase Agreement regulated by the Consumer Credit Act 1974.
“Under the terms of the contract the customer has an option to purchase the vehicle either at the end or during the agreement if the outstanding debt is paid off. Until the customer purchases the car, it remains the ownership of BMW Financial Services (GB) Ltd (BMWFS).
“While BMWFS remains the owner of the vehicle, it has an interest that it is not modified, reasons which include:
1. Any modifications could endanger the safety of the car, its driver and passengers and other road users.
2. Modifications also will affect the insurance cover for the car, to the detriment of the owner, driver, passengers and other road users.
3. It could negatively affect the value of the vehicle.
“Our contract therefore explicitly prohibits modifications to any vehicle, without our prior consent, whilst under a BMW Select finance agreement.
“Should a customer modify the vehicle, it would constitute a breach of the contract, allowing termination of the agreement unless the customer purchases the vehicle by paying off the outstanding debt.”
Modifying your car could also invalidate your insurance.
Matt Oliver, a spokesperson for GoCompare car insurance, said: “While modifications may ring bells of the bygone boy racer, it’s worth remembering that insurers don’t just class body kits, exhaust systems or suspension changes as vehicle modifications.
“The average used car buyer could find there are modifications they’re simply not aware of.
“Typically, modifications are anything which isn’t standard on a car, which could include alloy wheels, a satellite navigation system or even tinted windows – so it’s always worth checking what the factory standard is for your model of car to avoid landing in hot water when it comes to making a claim.
Finance allows motorists to drive a new car for a monthly payment
“Under two per cent of drivers are claiming to have car modifications, but we estimate this figure to be much greater, which leaves potentially millions of drivers open to invalidating their insurance and having their claims rejected.
“Different insurers have different views on what constitutes a modification – so it’s always wise to tell your insurer of changes or additions you make to your vehicle at the time of making them.
“Otherwise you could find yourself in the situation of having a claim rejected and possibly your car insurance declared void – that could affect your ability to be insured full stop, and not only for car insurance.
“Shop around and look for the best deal that suits you and your car, and if in doubt, check the service history for any modification and speak to your insurance provider.”