Thousands of people have been left out of pocket after car supermarket Carcraft went into administration.
Pamela, 69, from the West Midlands, was just one of the firm’s panicked customers who inundated me with emails last week.
She explained that she bought a car from her local Carcraft branch last year on finance.
As part of the deal, she purchased a Drive Happy Plan – a package which covers warranty, MOT, servicing and roadside assistance.
Administrators have been appointed to wind down the firm that labelled itself as “the UK’s leading car supermarket” and pay off as many creditors as possible.
Unfortunately, this means customers with the Drive Happy plans will no longer be covered.
Pamela says she has no spare cash to pay again and feels devastated and very angry – and who can blame her.
However, she was a bit happier when I explained to her that all might not be lost.
When buying goods or services using your credit card or via a loan agreement you potentially have the protection of a law known as Section 75 of the Consumer Credit Act 1974. This means that where there is a problem with the trader, the finance provider will potentially recompense you and then step in your shoes to take up the fight.
Fortunately for Pamela she purchased her car via a point-of-sale loan agreement and Carcraft is now in breach of contract as it is not going to supply some of the services promised – and she can therefore claim.
Many other customers will have extended their packages by adding to their car finance deals. But hire purchase agreements and some other forms of payment do not fall within the Section 75 protection.
If you paid by another means go to Grant Thornton, the administrators for Carcraft, and tell them about your claim.
You will have to provide proof and if they accept it you will become an official creditor.
However, a word of warning – it is rare in this situation for a creditor to receive compensation.