Our Audi sports car sprung a £10,000 leak. We want a refund

My husband and I bought a one-year-old Audi TT convertible in July last year. We bought it from an Audi dealer and took out a personal contract purchase (PCP) agreement with Audi’s finance business, Volkswagen Financial Services. We put down a £3,500 deposit and our repayments were £528 a month.
All went well for the first few months but a year ago the car started filling with rainwater so my husband took it to an Audi centre so it could investigate. We were told that the problem was caused by drainage ports in the roof becoming blocked with debris, which was preventing rainwater from leaving the vehicle.
Audi said this was a maintenance issue rather than a manufacturing fault, but I checked the owner’s manual and there was no mention of maintaining the drainage ports anywhere, so there is no way I could have known to keep an eye on this. The repair is expected to cost £10,000, which includes replacing and rewiring the electrics damaged by the water. Audi said this wasn’t covered under the warranty, which we think is unfair.
Over the next few months we went back and forth with Audi as we tried to reach a resolution. During this time we kept up with our monthly repayments, despite having no access to the car.
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We made it clear to Audi that we wanted to reject the car and finally in February, it agreed to take it back and cancel the finance agreement. We really needed another car but we couldn’t buy one under a new PCP agreement until the previous contract had been cancelled, so we told the finance company that we would cancel the direct debit.
Two months later we had a letter saying that we had defaulted on the agreement by not paying in February and March. This is despite Audi confirming in writing that it would cancel the agreement. We feel that by failing to provide a product that is fit for purpose, it is Audi that has defaulted on the agreement.
We want it to cancel the PCP agreement and return our deposit and monthly payments, worth a total of £6,668.Mark, Flintshire
I can imagine your horror at getting a £10,000 repair bill months after driving your expensive car away from the forecourt.
The car came with a three-year warranty but this ended up being useless to you because Audi claimed the damage came from a maintenance issue rather than a fault with the car. You pointed out that most people wouldn’t know they had to maintain these components without being told, so I thought it was ridiculous of Audi to expect this.
To me this sounded like a fault with the vehicle, and when I searched online I noticed that drainage tube problems are common with this model and year.
You had had the car for more than a month when the problem started so, under the Consumer Rights Act 2015, the retailer gets a shot at repairing it. It was disappointing that Audi did not honour this, instead claiming that you should pay for the repair, but it did the right thing eventually by agreeing to take the car back.
The reason you then started getting letters about defaulting on the agreement was because you cancelled the direct debit yourself before the loan had been cleared. This was unwise. While you had given the finance company notice that you would stop the direct debit, it’s best to let the lender formally cancel the agreement so you don’t risk being in breach of your contract.
By this point, however, you had been without your car for four months and really needed another one.
Returning a car can be complicated when it is bought on a finance agreement, partly because multiple businesses then have to communicate with each other. While the Audi dealership sold your car, your loan was with Volkswagen Financial Services. Even though you were the registered keeper, the finance company owns the car until the loan is paid off. To clear your loan, the dealer has to pay off your debt so that it has the right to sell the vehicle. It also needed to cover the cost of fixing the car so it could be sold on. To make this process work, the companies need to be co-ordinated.
Stuart Masson from the advice website The Car Expert said: “Car finance is like a mortgage that is secured against a car and can be hard to unwind. It’s not just a case of cancelling the agreement because there is still a car that needs to be sold.”
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He said dealers want to sell cars quickly so they often have a streamlined process for customers who reject faulty vehicles. Sadly in your case Audi’s process didn’t sound streamlined at all.
I asked Audi to investigate back in April and it took three weeks for it to stop sending you letters chasing payment. In July you were still the car’s registered keeper and were sent a letter from the DVLA reminding you to tax it.
Audi told me that the car was still being repaired and it needed to be fixed before it could be bought back from you. I asked what was taking so long and it told me there had been complications with the repair but that it was trying to resolve this as quickly as possible.
I thought we were finally getting somewhere in August when ownership was transferred to the dealer and your loan was cleared. But despite you being promised a phone call to discuss your refund, Audi and Volkswagen Financial Services stopped communicating with you.
I told both businesses that it was unreasonable to let this drag on indefinitely, and finally in October Volkswagen Financial Services refunded your deposit, six PCP payments, and gave you a goodwill gesture, rounding the total figure up to £7,000 which is now in your bank account.
Audi UK said: “Customer satisfaction is one of our key priorities. We were always committed to resolving this matter, but due to the number of parties involved, the process took longer than anticipated, which we apologise for.”
You said: “We are absolutely delighted that this is resolved after so long. Your help and advice has been invaluable, thank you so much.”
£1,470,000: the amount Troubleshooter has saved readers so far this year
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