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I'm posting this again here because I think I put in in the wrong forum last time so apologies for that...
I know there are similar threads on here but I think I need help to identify exactly what kind of lease/hire agreement I've saddled meself with(!)
Anyway, I'm leasing/hiring a vehicle for my cleaning business but it's not really working out - it's costing too much and it's no longer suitable for the kind of work I'm doing.
Quick question; can I VT the leasing agreement or whatever it is, if not, what are my options?
The Hire Agreement is headed 'Hire Agreement regulated by the Consumer Credit Act 1974'
It mentions 'Period(s) of Hire, Rental Payments, but also Secondary Term(s) which I though were for leases - I'm confused!
I think that you will be tied in for the full term of the lease unless you can find someone to take it over from you. Usually leasehire is pretty iron clad as you never own the vehicle it is always theirs and you use it with their permission.
You can contact them and expalin that you cannot afford it, they may be willing to negotiale a severance fee for the agreement but I think that would be the best you can hope for.
I do not pretend to be an expert so wait and see what others can offer. Are you able to scan the terms and conditions and I could hyave a look at it for you if you can post a link to it on here.
It is a Personal hire contract - if fact the only way it could be deemed 'business' if it was signed as a partnership or Limited company (or Plc). So, you get the benefit of the CCA, but my earlier comments hold good - explain that the vehicle doesn;t meet your needs and require another. If you are prepared to take a different vehicle with them financing it, you may be OK but expect to pay for the change of mind!
Do you know what options I would have if I wanted to do a voluntary termination of the agreement? I know I can do this with HP if I've paid off 50% of the total balance, but would this be applicable in this case?
There are so many variations of Personal Leasing you'd really have to look at the 'Rights to Terminate' in the small print of the contract. The finance house can also advise, but as their interests aren;t the same as yours - see what they say and let us know what they suggest.
Looks like they will come after me like a pack of bloodhounds if this (from the Rental Agreement) is anything to go by (my comments in brackets):
"Additional amount payable if this Agreement or the hiring ends following your breach, see further under paragraph 12 of the terms and conditions.
You will have to pay:
(a) all Rentals and other sums which have fallen due but are unpaid as at the date of Termination or the ending of the Agreement under paragraph 11 of the terms and conditions; and
(b) damages for any loss we suffer as a result of any breach of your obligations; and
(c) by way of agreed liquidated damages and in addition to any arrears of Rentals, a sum equal to the Rentals which but for the Termination would have become payable during the remainder of the Term discounted at the rate of 5% per annum from the date the Agreement Terminated or ended to the dates on which the relevant Rentals would otherwise have fallen due; and
(d) any reasonable administration costs and expenses incurred by us as a result of your breach in accordance with paragraph 2.1.3 of the terms and conditions".
([b] + [d] = in other words an open cheque)
"Less the net sale proceeds of the Vehicle after deducting cost of repairs, storage, insurance and sale and any other costs including legal costs reasonably incurred if the vehicle is repossessed and sold within 3 months of termination, or if the vehicle is repossessed but not sold within such 3 month period, the value of the Vehicle as reasonably determined by us."
('reasonably determined by us' oh look another open cheque)
"Charges payable if you breach this Agreement:
• any repossession agents fees/tracing agents fees, vehicle storage charges/auction fees, insurance costs and abortive collection fees which we incur will be charged at the rates which are current at the time we incur them we will charge an administration fee of £70.50 (incl. VAT) each time we instruct a repossession agent or tracing agent
• any legal costs we incur will be charged (on a solicitor and own client basis) at the rates which are current at the time we incur them
• if you have failed to keep the Vehicle in good repair and condition, fair wear and tear excepted, and the Vehicle is for any reason returned to, or repossessed by us, we may require that you pay the costs of such repairs which are necessary to put the Vehicle in good repair and condition."
(They decide what's fair wear and tear - oh look yet another open cheque)
Looks like I'm stuffed unless there's some way to wriggle out of it! I don't really want to contact the finance company at this stage until I've explored all my options, or at least until I know what my rights are under this agreement...will have to apply for a copy of the t's and c's which I don't seem to have got.
Aha = but that is the requirements for a Breach of the agreement - you're not planning to do that, you're wanting to renegotiate the contract and try to get your existing vehicle swapped - so hopefully you can do this all amicably...!
Well actually it would be more cost effective for me to give them this one back and buy another vehicle outright so if I could 'breach' the agreement say by voluntary termination that would be my preferred course of action.
However, I wouldn't want to do this if it were going to work out to be too expensive in the long term.
That's why I'm hoping what this may be is actually Hire Purchase, which would give me the option of VT once I had paid off 50% of the total cost (which I believe I may have by now).
At the moment I don't know how to differentiate between HP and personal leasing / personal hire contract...
It goes without saying it would be more cost effective (in pure financial terms) to walk away from a binding agreement, however the pitfalls are many - forget abot the credit defaults, DCA harassment and the other joys of premature contract termination. If you're running a business, you need a default like a hole in the head as this will work against you for a minimum of six years. Can you put a price on that?
What is there to lose by seeiking an amicable (as far as the contract allows) amendment so get the vehicle you require? Of course, if the whole issue is money, and that the vehicle must go because the contract is now untenable, and you don;t plan to end it by negotiation, there is nothing within the CCA that really protects you from a justified creditor seeking enforcement of a debt. The best course of action is to short-stop the action if at all possible, becasue you end up paying big money to everyone else for the early termination, fees for the recovery, sale and residual value of the vehicle. It is a nightmare (BTDT) and to be avoided at all costs.
(b) damages for any loss we suffer as a result of any breach of your obligations;
This is the majic clause, if you want to walk away you are going to have to pay the piper. They may negotiate on payment if you tell them you cant afford it but if you want to cancel they will most likely say OK but expect you to pay the remainder of the lease. The other clauses make sure that if you mess up or hold out in any way they can nail you to the wall.
My honest advice is to plead poverty and ask to return the vehicle as you cannot afford to keep it. they may negotiate on an out clause which orks out cheaper for you.
Okay I see - well thanks very much for the advice - really appreciate it! (sniffle!!!)
BTW I just found out the buggers mis-sold me PPI (or GAP cover as they call it) so I've been paying for something that ain't worth the paper it's written on - don't suppose I can get them on that one?
Perhaps I should just be nice and ask them very politely if they would take their truck back?!!!!
Just a thought, but it occurred to me that if I was mis-sold PPI (GAP insurance) and this was lumped in to the finance agreement there might be a chance that I could claim that there is a flaw in the contract and so it is non enforceable.
I will post this in the PPI forum as well just to see if anyone there knows if this is a possibility, but I would appreciate any views you may have.
Just to keep you all posted - I've been contacted by the leasing co who have confirmed that the insurance is not valid, and offered to repay the premium.
I pointed out that if they had not mis-sold the vehicle and the policy I would not have entered into a finance agreement with them and I now would like them to take back their vehicle and give me a generous settlement figure so that I can walk away from it.
Having taken some legal advice, it seems I'm on fairly solid ground so I'm going to write to them today outlining my case and wait for their response.
VT possible on Hire Agreement (Lease)?
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Re: VT possible on Hire Agreement (Lease)?
