NEW MERCEDES SPRINTER 6% Increase after signed contract

[Delboy0127]

Hi I have been asked the question as I have owned mercedes for 30 years

A colleague of mine runs a fleet of Mercedes Sprinter Vans 6 in all soon to be seven

He ordered a New Mercedes sprinter van approx 1 month ago he paid the deposit and signed the contract. This is an outright purchase no finance involved .

He was quoted a delivery of approx 14 months which fits in with his requirements. The approx price £40,000 to £45,000

This morning he has received a telephone call from the Mercedes Commercial dealership advising they had some bad news for him advising him that the price of his van was going up by 6% £2700 plus vat.

What is his legal position ? I would have thought that they would certainly been aware of this future price increase when he signed the contract and should have advised him .

Any guidance appreciated please.


Someone has suggested he use his Insurance legal cover to investigate the suituation

 

[Rory]

I suppose it depends what the contract says - it'd be pretty astonishing if it doesn't say they can put the price up if they feel like it.

Presumably it's a commercial (business to business) contract - you can't apply private consumer way of thinking to it.

 

[Dryce]

What is his legal position ? I would have thought that they would certainly been aware of this future price increase when he signed the contract and should have advised him .

Depends what the contract says.

In principle if they are taking a deposit and then delivering the van in 14 months - then it's unlikely that the contract will not allow for price variation - it wouldn't make commercial sense.

 

[Stocho]

Depends what the contract says.

In principle if they are taking a deposit and then delivering the van in 14 months - then it's unlikely that the contract will not allow for price variation - it wouldn't make commercial sense.

It makes no commercial sense to pay a deposit if it does not lock in all the key features of the deal including price.

Unfortunately, sounds like the various unfairness provisions might not apply as it is probably not a consumer contract as buying vans is not incidental expenditure for that kind of business.

 

[Dryce]

It makes no commercial sense to pay a deposit if it does not lock in all the key features of the deal including price.

Conversely.

It makes no commercial sense to offer to take a deposit and commit absolutely to a price on deivery that far ahead - unless you can protect your costs or load a suitable risk premium into the price.

Reality bites.

Now I do think the situation is exacerbated when the supplier figures that if the customer can cancel that they have little incentive to keep the customer if they can resell a cancelled order to another customer at the higher price.

 

[Stocho]

Conversely.

It makes no commercial sense to offer to take a deposit and commit absolutely to a price on deivery that far ahead - unless you can protect your costs or load a suitable risk premium into the price.

Reality bites.

Now I do think the situation is exacerbated when the supplier figures that if the customer can cancel that they have little incentive to keep the customer if they can resell a cancelled order to another customer at the higher price.

So given that the business is small and not buying in quantity seems the solution is to ask your relatives to pay the deposit so that it is a consumer sale. I do hope that HMRC would then apply substance over form principle and treat it as purchase by the business (which they often do at least implicitly with smaller items) and allow VAT reclaim.