united-kingdom consumer-protection
Motorcycle price dropped less than a year after purchase. Can I get a refund?
<p>I purchased a motorcycle in 2018. It was a new model. Towards the end of the year Honda launched yet a new version and to get rid of the 2018 stock dropped the price of of about 15% (£1000 from the original price).
I bought the bike on a PCP finance and because of the price drop the bike is now worth less than the remaining amount. Can I ask for compensation? Is there any rule about price drops?</p>

<p>NOTE FOR CLARIFICATION: I understand goods depreciate after purchase and I would be OK with a "normal" depreciation. The thing is that Honda has done something unusual.
My motorbike should be worth around £3500 now but because Honda HQ (not the single dealer) has announced worldwide a price drop of the model I purchased, my bike is now worth only £2500.</p>

<p>Since I purchased the bike with PCP, the finance company guarantees the value of the bike at the end of the contract. 
At the end of the contract my only option now will be to return the bike, otherwise I will have to pay for a difference that is nowhere near its actual value.</p>

<p>You paid a higher amount so you got to drive the latest model for a year. </p>

<p>I can buy a lower amount right now, but I only get to drive last year's model. Or I can pay a higher amount to drive the latest model again.</p>

<p>That's life. I have a Wii. I didn't buy it when people queued up for it, but when the shop was selling them off for half the price. That's life. You pay more for the latest and greatest, and then it gets cheaper. </p>

<p>The protection you are talking about is this: If the shop advertises a motorbike for £8,000 and when you go into the store the price is suddenly £10,000 then there is some protection in place. The protection means the shop will get a major telling off from trading standards if you complain, and possibly a fine. It doesn't mean you get the motorbike for £8,000. And it most definitely doesn't mean you get money back when they reduce the price a year later. </p>

<p>No sane nation would try to control prices like that.  You paid more but you have held the product since that time.  It is generally accepted that goods released with a brand year decline in value as they age.  Some products have definite life spans and may not be able to be sold at any price after some point (would you like a set of 1995 Encyclopedias?) Certainly you wouldn't expect a discount on your Chanel outfit when it goes out of style and goes on sale everywhere.  This is the same principle.</p>

<blockquote>
  <p>I purchased a motorcycle in 2018. It was a new model. Towards the end of the year Honda launched yet a new version and to get rid of the 2018 stock dropped the price of of about 15% (£1000 from the original price). I bought the bike on a PCP finance and because of the price drop the bike is now worth less than the remaining amount. Can I ask for compensation? Is there any rule about price drops?</p>
</blockquote>

<p>In short <strong>no</strong> - that's not how these things work, you bought a product at a given price at a given point in time. Barring any retailer policy or being able to return the goods/cancel the purchase using normal returns policies/statutory rights, you're stuck.</p>

<blockquote>
  <p>Since I purchased the bike with PCP, <strong>the finance company guarantees the value of the bike at the end of the contract</strong>. At the end of the contract my only option now will be to return the bike, otherwise I will have to pay for a difference that is nowhere near its actual value.</p>
</blockquote>

<p>PCP further complicates things here and paradoxically makes it simpler at the same time. You see what you actually bought isn't a bike - the way PCP works is that you aren't buying the vehicle you're paying a finance company what they <em>estimate</em> the depreciation on the vehicle to be due to you having the possession/use of the vehicle over the term of the finance agreement.</p>

<p>So how this simpler? Well, you still have the <strong>exact</strong> same options you always had. You either pay the fixed balloon payment and keep the vehicle or you hand it back at the end of the term and walk away. Since you have a fixed value in the agreement <strong>nothing</strong> regarding the current "market value" of the bike matters one jot in this scenario, if you return the vehicle the fact that the bike will be worth less than what the finance company estimated is their loss, not yours. Arguably unless you especially want to keep this particular bike then returning it is the sensible move for you, since even if you wanted that <em>model</em> of bike but weren't fussed about the individual one you could just hand the bike back and go buy a different one second hand for less than what your balloon payment would have been.</p>

<p>Of course the nature of these agreements is that it could also have gone the other way - if depreciation had been less than expected then you'd have had the option to pay a balloon payment that was less than the bike was worth and be quids in or the finance company would have reaped the rewards of the asset being worth more than they planned.</p>

<blockquote>
  <p>NOTE FOR CLARIFICATION: I understand goods depreciate after purchase and I would be OK with a "normal" depreciation. The thing is that Honda has done something unusual. My motorbike should be worth around £3500 now but because Honda HQ (not the single dealer) has announced worldwide a price drop of the model I purchased, my bike is now worth only £2500.</p>
</blockquote>

<p>Nothing Honda has done is remotely unusual - it doesn't happen every time by any means but this sort of thing happens all the time.</p>

<p>It's not your bike. This is actually a good thing for you.</p>

<p>If you've got a PCP deal, the finance company owns the bike and you are renting it from them for the duration of the contract. At the end of the contract, you have already agreed the price that it will be available for you to buy (£3500 if I read correctly). It's actually the finance company that is out of pocket now, as they've got a bike, worth £2500 that they were expecting to sell to you for £3500 at the end of the contract.</p>

<p>Don't buy it from them, give it back and buy an identical one on the second hand market for £2500. Problem solved.</p>

<p>To answer the question directly, the only thing you could reasonably ask for would be a reduction in the purchase cost from the finance company at the end of the contract. If your valuation is correct, they may well agree.</p>

<p>I do not have any specific knowledge of British law, but as a European industrialized country they are likely to be in line with general principles elsewhere.</p>

<p>As a general rule, consumer protection laws try to mitigate an information deficit on the side of the consumer which is rooted in the better access to information and knowledge of the law on the side of the commercial seller, and other disadvantages originating in the asymmetry of the professional/private seller/buyer relationship. </p>

<p>For systematic reasons &mdash; all adults are principally considered self-responsible agents! &mdash; <strong>the mitigation only takes place when the disadvantage is deemed systemic and overly unfair.</strong> Examples are online purchase return rights, or cancellation rights for doorstep-purchases, or minimal mandatory warranties.</p>

<p>By contrast, the normal consumer goods model cycle which can be generally anticipated even by a private citizen with no special market insights is not unfair enough.</p>

<p>The situation would be different if the dealer had been made aware of an impending delivery of new bikes, and a corresponding announcement of impending rebates for the old model. If he then had raved about the excellent lasting value of the old model you could reasonably claim to have been misled. Whether that would be criminally fraudulent or at least an untrue claim which leads to a right of refund or compensation (provided you'd be able to prove it) I don't know &mdash; but I'd surely have more sympathy for your case. </p>
