Our investigation
We learned the vehicle was surrendered in an untidy condition and with brakes that failed a subsequent inspection and required the vehicle to be towed to a garage. The sale value at that time was estimated at $8,500, which would have left Ricardo with a shortfall of $4,300. However, the bank repaired the brakes and groomed the car at a cost of $4,300 and sold it for $14,800 – significantly more than the initial estimate. The bank added the repair costs to the amount owing by Ricardo, leaving him with the shortfall of $2,300. We considered the bank had acted reasonably. Under the Credit Contracts and Consumer Finance Act 2003, a bank must try to get the best price reasonably obtainable for the goods it intends selling, and repairing the vehicle enabled the bank to do just that. The bank was therefore entitled to make the repairs and did not need Ricardo’s agreement beforehand. Furthermore, the loan agreement allowed the bank to add the repair costs to the amount owing.
Outcome
Ricardo withdrew his complaint.
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