I recently purchased a 2008 BMW 520d from an independent dealer for the sum of £5425. The recorded mileage at the time of the sale was 129,420 miles.
On the evening of 21st March 2015, the car began to suffer vibrations. The following day I contacted the dealer and advised that I was going to arrange for the car to be looked at by the nearest Independent BMW Service Centre to my home. The Service Centre informed me that the engine had the following faults:
1. Inlet manifold holed/broken
2. Swirl Flap Motor broken
3. Cylinder 3 – poor compression. Suspect cylinder damage

The mileage noted on the vehicle’s odometer was 130,593 miles.

The Service Centre advised that the car is un-roadworthy in its current state, that it is uneconomical to dismantle and repair the engine and that the car would therefore require a replacement engine in order to return to road-worthiness. They also advised me that the cost of a replacement engine, plus fitting and VAT is likely to be greater than the value of the car.

I passed this information to the dealer by phone and followed this up with several phone calls and a further three letters. I followed the recommended procedure in anticipation that this may end up in the Small Claims Court. The telephone and written correspondence with the dealer ended with a position that the dealer is offering to either repair the car if I return it to them (which will require a tow as the car is not roadworthy) or they will refund me £4000.

Since the car has been off the road I have incurred significant cost, time and inconvenience through having to hire a car and I believe that the £4000 offered does not adequately compensate me for the £5425 purchase price and the hassle this has caused me, and that it is not right for me to suffer a loss of £1425 having only enjoyed use of the car for a little over a month and 1000 miles usage.

I have tried on several occasions to agree a compromise amount i.e. £5000 and then £4500 but the dealer has refused to offer beyond £4000.

I therefore feel I have no choice but to take the dealer to court but my concern is whether or not I have a legal right to demand a refund rather than repair? I do not wish to have the car repaired as I do not have faith in the dealer to do this properly (he has stated he will not have it repaired by an authorised BMW service centre) and I am concerned any repair he undertakes could lead to further problems and difficulty in selling the car in the future.

I would very much welcome your opinion of whether I have a strong case in court for compensation or whether the court is going to recommend I should have taken the dealer up on his offer of repair?