Mileage Discussion and Qualification

Have you ever had a customer come back to you and say – ‘I thought we had agreed to more (or less) miles than is on this agreement’?  If so, what evidence did you have to support what you had included in their agreement?  Regardless of the Finance product you sold them – you should be able to show the customer evidence of the discussions and considerations before they agreed on a mileage (and product)

• Provided training, communications and support on how this should be done
• Partner HUB Compliant Sales Process 
• Qualification Forms 

• Ensure your process would stand up to scrutiny from regulators and FOS.  Have controls in place to monitor your mileage qualification process and documentation

• Carry out a full and detailed qualification of the customer requirements and mileage and capture evidence

  • Appraise any Part Exchange – what is their current mileage – does that tally with what they are telling you now?

  • Will their situation change (e.g. affects of COVID (level of commute?), moving house, starting a family, having a new job, working from home more) which will impact their mileage compared to their current profile (this will also be relevant when offering finance and insurance products and the customers future ability to afford any monthly payment commitments)

  • Ask questions about insured mileage under their motor vehicle insurance policy

• Mileage discussions apply to all finance products – ensure the customer is fully aware of the limitations/requirements of each type of product and also that it meets the requirements of the products sold by way of any maximum or minimum mileage restrictions

• Provide a printed FAMOS quote to every customer and highlight any excess mileage charges and  encourage customers to check the contents of all documents

• Ensure you have highlighted any excess mileage charges and the circumstances upon which these would need to be paid

• If the customer goes against your suggestion for mileage (i.e. they decide to proceed on a lower mileage – perhaps to try to reduce their monthly payments) – then can you evidence this?

• Ensure you keep a written record of the sales process – some retailers use a ‘mileage disclaimer’ form – for the customer to sign to confirm the above discussions, as evidence should the need arise

• Also offer maintenance packages – this will help ensure the customer does not receive unexpected costs if the mileage is higher than anticipated

• You will find yourselves exposed should a customer come back at a later stage and make a claim for ‘undisclosed’ excess mileage charges.

• You stand a high probability of losing a case brought to the FOS and could incur significant costs therefrom.

• In order to meet TCF requirements – mileage qualification is key

• The FCA will undertake their own mystery shopping exercises to audit dealer processes and may take enforcement action if you do not comply

• Claim Companies Have Car Dealer in Their Sights (Automotive Management Online) - https://www.am-online.com/news/finance/2015/11/03/claims-companies-have-car-dealers-in-their-sights