AM Online

WH dealer funds are unsecured

Retailers who operated used car dealer guarantee schemes through Warranty Holdings have been told that funds held on their behalf will form an unsecured claim against the Ford-owned business.

Joint administrator, Nigel Ruddock of Grant Thornton, says “more than handful” of dealers are affected, typically smaller dealerships for whom a four-figure sum was involved. Dealers feel aggrieved because they believed the funds were held in a trust account.

One told AM: “The wording of the original agreements was that the funds were held in a trust account. If they weren’t, that suggests they may have been misappropriated.”

It now seems unlikely the guarantee holders’ claims will be honoured – in contrast to previous claims that all customers would be protected and that the insurance companies would stand behind the warranties The fact that some larger groups – believed to include Bristol Street Motors and Reg Vardy - have managed to extricate their funds has heightened the bitterness felt by smaller retailers about the whole Warranty Holdings debacle, and their view that Ford has ridden roughshod over them on this issue.

“A number of dealers have claimed they had a trust account, but the fact is that so far they have not been able to produce a contract, or any evidence that the arrangements were reviewed on a regular basis,” says Ruddock.

  • RAC Warranty has bought Warranty Holdings’ core MBI policy database for an undisclosed sum.
  • If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

    Comment as guest


    Login  /  Register

    Comments

    No comments have been made yet.