When a finance company demands an indemnity payment for a vehicle rejection, most dealers feel they are fighting a losing battle. However, a recent court victory by one of our subscribers proves that these claims can be successfully defeated.
A finance provider attempted to recover over £10,000 from a dealership following an engine failure. They argued that because the fault occurred within the first six months, the dealer was automatically liable under consumer law.
We provided the dealership with expert advice to challenge the allegations from the finance company. Our guidance focused on several technical points that the finance company had overlooked:
The dealer argued that their contract with the finance company was Business-to-Business, meaning the consumer-law “assumptions” do not apply in the same way and therefore the indemnity clause from the lender was unenforceable against the dealership.
The dealer highlighted that the driver continued to use the vehicle after the fault appeared, materially worsening the damage.
It was identified that the finance company had failed to follow the specific dispute procedures laid out in their own Operating Agreement.
The dealership successfully defended the matter in court. The claim was dismissed in full, and the garage was protected from a five-figure loss.
Why Subscribe to LegalSolutions4u? This win demonstrates the power of having a specialist partner in your corner. We don’t just give “general” advice; we provide the tactical roadmap to help you handle disputes, rejections, and indemnity demands plus much more.
As a subscriber, you get:
Direct Instruction: Clear steps on how to respond to “unwind” demands.
Expert Content: Access to the legal logic that wins cases like this one.
Revenue Protection: We help you stop meritless claims from eating your profit.
Don’t let an unfair claim become a foregone conclusion. Join the community of garages who use Legalsolutions4u to trade with confidence. Call us today on 01914813992