Wrong wheels on 107

Hi everyone, first time poster.

I bought a used Peugeot 107 for my wife and 18 year old son to use two weeks ago from a second hand car dealer. We noticed a grinding noise when the steering wheel was turned both ways towards full lock. On inspection I have found that 15" alloy wheels have been fitted to the car, they should be 14", confirmed by a Peugeot dealer. I have also found that the back bumper has been cut to allow fitment of the wheels again confirming that they are too big. The Peugeot dealer has informed me that 4 steel wheels will cost around £450 fitted and they have advised me that this should be done on safety grounds. Also I am unable to insure my son on the car as it has been classed as a non-standard modification.

I have spoken to the dealer and advised them of the problem and they have told me that they don't know if this would be covered under the warranty. I told them when I bought the car that it would be for use by my son.

Any advice on where I stand with this would be greatly appreciated, and any thoughts on where I go next if they refuse toreplace the wheels.

Thanks in advance