Overpaid on service plan for car - manufacturer is refusing a refund!

[StupidlyStuck]

Hi,

I took out a service plan for a car I’d bought, it was arranged by the local dealer I bought the car from, but administered by a finance-type company on behalf of the manufacturer. The idea of a service plan is that you split the cost of 3 years of servicing and pay it via a monthly direct debit. It also ensures that you get all of the services at the price charged when you buy the plan, i.e. it protects against price rises.

The plan has no admin or interest fees, it is simply the cost of three services added together and split into monthly payments over three years. I’ve worked out that I’ve paid £125ish more than the garages have charged for services, yet both the main dealer and the admin company are both saying that this money is not mine to have back, that it is a “manufacturer clawback”
or “admin fee”. Both companies are refusing to show me where this is in the terms and conditions. If I’d just put the same amount of money to one side each month, I’d still have the £125 in my possession, but now it’s been claimed back by the manufacturer.

I’m so annoyed about this - I am effectively being stonewalled with both companies saying I can’t have the money back but that they will not explain/prove their point further. I have gone to the Motor Ombudsman who have said that the service plan was not sold by the manufacturer, therefore they cannot investigate them.

AIBU? If so, fair enough. If not then I would really appreciate some advice on where to go next?
Thank you for reading

Honestly, I don’t think you can do anything here. You agreed to that price and got a bad deal, which is unfortunate but unlikely to be something you can claim back any more than if you booked and paid for a non-refundable hotel room before the price dropped.

Yeah, that makes sense. I think the grey area here has come about because the garage don’t publish their servicing prices so when they told me it was the cost of 3 services, I believed them.

You’ve presumably signed a contract agreeing to the price you paid?
I’m afraid I doubt you have any chance of getting this money back. The price was known from the beginning, they haven’t changed it or increased it sneakily. The fact that it wasn’t the good deal you thought it was is tough luck I’m afraid.
Learn from this and always check what the alternatives might cost before you agree to anything.

1. The finance company need to earn a fee from somewhere - the way it was described to you doesn't make commercial sense. It's probably been mis-sold by the salesman but unless you have all you say in t&cs or the brochure, you're stuck.

1. Maybe the cost have services has fallen by - say £50 on your second service and £75 on your later service compared to what they internally projected (which you won't know). If you're protected against price rises, you're also risking overpaying if the price drops.

1. All dealers make very little on the sale of the actual car, and huge profits on the extras they sell. Some of that £125 is in their pocket.

1. The service plan will be sold for the same amount everywhere, but the cost of servicing may vary. Your services may be £100 less than a main dealer in Central London if you're up north for example, so they've averaged the cost, meaning you pay more but the London car owner pays less.

1. The plan may include some things which might be replaced during a service (no idea what ... ) and they've decided they didn't need to.

1. Don't buy anything a dealer offers you other than the car!

It also ensures that you get all of the services at the price charged when you buy the plan, i.e. it protects against price rises.

You fixed the price, that means you win if prices increase but lose out if prices drop, that’s the risk you took.

@StupidlyStuck is it Land Rover by any chance?

That’s typically the way with this type of service deal, if you do something similar with British Gas for boiler cover you get services included but you could get the service cheaper if you booked iff if yourself.

Youre paying for the convenience of knowing you’re covered by a particular garage.

Why do people take out service plans? I've never understood this.

Because depending on the type, it can work out a LOT cheaper
(I work in the area)
A service plan might be £600 for 3 services when you buy the car. Where if you pay as you go - 1st service £370, 2nd £560, 3rd £370

Yeah, I don’t think there’s much you can do. Service plans are always a big no no to me

Great advice especially number 6. They always want to sell you a warranty for one. You don't need it.

We had a similar issue with VW. Bought a three service plan with new car but upgraded car at 2.5 years. We were told we could carry the unused, but paid for 3rd service to new car. When the time came they denied this was possible so we lost the money.

We are currently buying a new car with MG. Their plan apparently is like an account you put into each month and they take cost of any work out of that pot. Do you are not paying for a certain amp of services as such. Plus, it's our account not linked to the car and so if we get a new car we still keep the money. We don't know if we are going to take the deal because we have found using a local garage to be cheaper anyway.

If you have proof they informed you it was the cost of three services, you may have a case to get the money back because it was false advertising. You could try the trading standards office in the first instance. They deal with regulations on Consumer Protection from Unfair Trading. I don’t think they will act for you directly to get you compensation but might be able to point you to information on how to do that.