MI Vehicle Finance Limited · DRN-6112453

The complaint Mr L complains that a hire purchase agreement with MI Vehicle Finance Limited, under which a car was supplied to him, was unaffordable and that it provided the credit to him irresponsibly. What happened A used car was supplied to Mr L under a hire purchase agreement with MI Vehicle Finance that he electronically signed in February 2023. The price of the car was £25,999 and Mr L agreed to make 59 monthly payments of £569.12 and a final payment of £570.12 to MI Vehicle Finance. Mr L complained to MI Vehicle Finance about the hire purchase agreement in June 2025, but it didn’t uphold his complaint. Mr L wasn’t satisfied with its response so referred his complaint to this service. His complaint was looked at by one of this service’s investigators who, having considered everything, didn’t think that MI Vehicle Finance had acted fairly. He said that he would have expected MI Vehicle Finance to have verified Mr L’s declared yearly income to ensure that the repayments were affordable for him and, if it had requested information about his income, it would have seen that he couldn’t afford the monthly repayments and wouldn’t have approved his credit application. He recommended that MI Vehicle Finance should refund any payments Mr L had made in excess of £25,999, with interest on any overpayments, and remove any adverse information recorded on Mr L’s credit file regarding the agreement. MI Vehicle Finance confirmed that it accepted that recommendation, but then said that Mr L had only paid it £15,295.58 so it proposed that it either collect the car and sell it at auction, with any excess over the difference of £10,703.42 refunded to Mr L, or that Mr L pays it the difference of £10,703.42 and retains the car. The investigator then recommended that MI Vehicle Finance should: end the agreement and collect the car; refund the deposit, with interest; calculate how much Mr L had paid in total and deduct £14,732.00 for fair usage. If he’d paid more than the fair usage figure, he said that it should refund any overpayments, with interest, and remove any adverse information recorded on Mr L's credit file regarding the agreement. If there were arrears after the settlement had been calculated, he said that it should arrange an affordable repayment plan. Mr L didn’t accept the investigator’s revised recommendation and has asked for his complaint to be considered by an ombudsman. He’s provided a formal submission in which he disputes the fair use figure of £433.31 per month and that the only option to keep the car is immediate full settlement with no reasonable time to raise funds. He says, in summary and amongst other things that: fair usage should be charged using the excess mileage charge of 9p per mile; he should be given 60 to 90 days to raise the funds; and his credit file should be corrected; but he’s since said that he doesn’t believe that he can realistically secure and repay £10,703.42 within 90 days. What I’ve decided – and why

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I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. MI Vehicle Finance has confirmed that it accepts that it didn’t provide the credit to Mr L responsibly, so I don’t consider that I need to consider that issue any further, other than to say that I agree that it didn’t make a fair lending decision. Mr L has been able to use the car since it was supplied to him, and he said in his January 2026 response to the investigator’s recommendation that the car had been driven for 63,475 miles in his possession. I consider that it’s fair and reasonable that he should pay for that use. Mr L says that the excess mileage rate is MI Vehicle Finance’s stated measure of mileage related reduction in value, so is a relevant benchmark for fair usage. The hire purchase agreement says: “For the Duration of this agreement you must not at any time exceed the [18,000] Annual mileage allowance … If you do so, and the Vehicle is returned to us (whether at the end of the agreement or earlier) you will have to compensate us for the resulting reduction in value of the Vehicle by paying a charge at the rate [of 9p] for each excess mile”. The excess mileage charge is payable in addition to the monthly payments that would have been paid under the hire purchase agreement, so the monthly payment covered 18,000 miles of use each year. Mr L used the car to drive 63,475 miles between February 2023, when it was supplied to him, and January 2026, which is an average of more than 21,150 miles each year. I’m not persuaded that the excess mileage charge is an appropriate charge on which to base the fair usage charge. The fair usage charge needs to take account of the amount of interest charged under the hire purchase agreement, Mr L’s usage of the car and what his costs to stay mobile would likely have been if he didn’t have the car. The investigator recommended that Mr L should pay £433.31 for each month that he had use of the car and I consider that a monthly fair usage charge of £433.31 is fair and reasonable in these circumstances. I’ve carefully considered all that Mr L has said and provided about his complaint, including his responses to the investigator’s recommendation, so I appreciate that my decision will be disappointing for him. I find that it would be fair and reasonable for MI Vehicle Finance to take the actions described below to put things right because it didn’t make a fair lending decision. Mr L doesn’t have to accept my decision and, if he doesn’t accept it, he’ll be able to keep the car, but the hire purchase agreement would continue and he’d have to make the payments to MI Vehicle Finance that he agreed to under that agreement.

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Putting things right As MI Vehicle Finance shouldn’t have provided the credit to Mr L, I consider that it’s fair and reasonable for the hire purchase agreement to be ended and for the car to be collected from him, both at no further cost to him other than as set out below. I consider that it’s also fair and reasonable that he should pay for the use that he’s had from the car and that MI Vehicle Finance should calculate the total amount that Mr L has paid to it under the hire purchase agreement and a fair usage charge for the period that he’s had the car at a monthly rate of £433.31. It should then arrange an affordable repayment plan with Mr L for the difference between those amounts and should treat him with forbearance and due consideration. MI Vehicle Finance is required to report true and accurate information about the hire purchase agreement to the credit reference agencies. When Mr L has paid the difference between those amounts to MI Vehicle Finance, it should ensure that any adverse information about the hire purchase agreement that it’s reported to the credit reference agencies is removed from Mr L’s credit file. My final decision My decision is that I uphold Mr L’s complaint and order MI Vehicle Finance Limited to take the actions described above to put things right. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr L to accept or reject my decision before 22 April 2026. Jarrod Hastings Ombudsman

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