Lombard Car Finance Agreement - enforceable?

[russgs]

Hi All,

 

Apologies but I am hoping someone can give me some guidance.

 

I have attached a car finance agreement that i took out in March 2007, and i'm curious as to whether it is enforceable or not.

 

There is no cancellation clause also the terms seem quite restrictive.

 

I was looking at some articles on the web and on this forum and i'm honestly not 100% sure, so i should be grateful for any advice.

UnEncrypted.pdf

[manny001]

Hi,

 

I just had a quick look, The agreement does NOT look enforceable.

[russgs]

thanks Manny, I spent a good part of last night reading through CCA1974, 2006 amendments and the OFT guidelines on this.

 

From what I can make out, this agreement either became regulated by virtue of the CCA 2006 amendment (especially as it is not for land, I have not signed any high net worth wavier, not for property etc...).

 

The other option is that if it does not automatically revert by virtue of CCA 2006, which i think it does, but also if they have made any amendments to it, according to the terms & conditions I have signed for all amendments in advance, then any amendment makes it regulated as per CCA 2006.

 

Alternatively (and this where i would like a banana eye), the t&cs state "all references to statutes or other regulations will include any re-enactment from time to time" which would suggest that any change in the law regarding this agreement, implies an amendment to this agreement which thus alters this agreement from non-regulated to regulated and thus enabling me to treat this agreement as regulated within CCA1974/2006 and contend its enforceability on that basis!

[chillinlong]

Hello all,

 

Please forgive me for a silly question, but when you say the agreement is not enforcable. Do you mean as in they cannot sue you for failure to keep up with payments and then them taking the cars back and selling them with a large shortfall and expecting it off you?

 

Thanks

[DeRichleau]

Depends weather Lombard agree that it is unenforcable. They may want to take a chance in court, assuming that they can produce the original, which after reading many posts on this site is not a foregone conclusion. It surprises me how many cases never make it to court.

[chillinlong]

Thanks for your fast reply.

 

I am just trying to understand as I have two agreements with Lombard via a company I use as I was renting them out. I struggled to keep up with payments therefore they have now terminated on one of the agreements, and passed onto Link.

 

They have kindly explained to me that they will take the 2 cars back (1 agreement) and auction them off which the value will be around 13k and yet I owe 23k. I will have to pay the difference and I have only had this agreement for around 9 or 10 months on a 5 year plan so I have not even paid half of it off yet.

 

I am just trying to understand what my legal rights are as I tried to ring them to make payment plans but they are not willing to entertain as the agreement is terminated.

 

I might have to do a seperate post to see what the others think...

 

Thanks again.

[DeRichleau]

How can they take both cars back when they have only terminated one agreement? If you have paid over a third they can not take anything without a court order. Or do you mean you are voulantarily handing them back? If you have a choice I should hang on to them both, make a bit of money from the rental and let them try to win in court. If they do then you may come out ahead, depending on how much the rental produces. There are all sorts of delaying tactics, meanwhile the money keeps coming in. (presumably)

Edited October 30, 2009 by DeRichleau

[chillinlong]

Hi DeRichleau,

 

I got two cars on one agreement as it is a private hire business I run. I doubt very much I have paid over a third. I presume the next step is for them to take me to court to take the vehicles back? They have already appointed Link to collect the vehicles.

 

Thanks

[DeRichleau]

No if you have not paid a third (on each agreement) they can come and get them,without a court order Sorry. You might be able to stop them by challenging the agreements, or if there are unfair charges get them back, even so I am not sure that it will stop them repossessing. There is another way though, if the registered keeper is for example your business partner then they will probably have to take proceedings for 'wrongfully retaining their property due to undischarged finance' and that may give you a chance to deny there is any undischarged finance because the agreement is unenforcable (assuming that it is unenforcable-but the burden of proof will be with them) Not sure how legal transferring the registered keeper is though,but it's hardly crime of the century if it is to your wife or brother.

[chillinlong]

Thanks again for your help DeRichleau...

[DeRichleau]

Just had a thought. If the cars are registered to your business there may be a different set of rules that come into play. Not sure about that but worth checking out. A business loan is a different animal to a private loan with different terms and conditions. Was the agreement ever signed or was it done on line. I assume you have blocked out the signitures? I agree with manny001 it does not look enforceable.

[chillinlong]

hello again,

 

it was not my agreement posted above but mine looks similiar. It was in the name of the limited company but personally guaranteed by me .

 

The agreement was personally signed and then faxed over...

 

Thanks again.

[pedross]

I am no expert on this type of agreement but I think you will find it is not covered by the CCA 1974 etc.

 

From reading it briefly it looks to me like a lease agreement with an option to purchase at the end. You have agreed to lease the vehicles for a set term and it looks as if you have agreed to pay for the whole term. You have repudiated the agreement and it is terminated and they want their goods back. A bit like hiring a car for a week except you have agreed to hire it for 5 years and make the payments monthly.

 

Basically, the difference is that they have not loaned you the money they have loaned you the car.

 

Once they have collected the goods I expect they will want some money.

 

Pedross

[chillinlong]

Hello Pedross,

 

That probably sounds right, so there looks like I will have to stump up the shortfall eventually. Maybe if I post the agreement on a new post there might be some new angles possible? I will give it a try and see what happens.

 

Thanks again for all your help.

[DeRichleau]

All well and good but what name is the registered owner of the cars? Yours the business or Lombard.. It might make a difference as to weather they can take them or need a court order.

[chillinlong]

Sorry my mistake, it is the money they have lent me as my company will own the vehicles at the end of the 5 year period.

 

The name is in the company name...

 

Thanks again...

[pedross]

I think its a lease purchase agreement, you lease the cars for 5 years and if all of the payments are made you get the option to purchase for say £50 or whatever the agreement says.

 

I don't know how you would determine who is the registered owner. The DVLA documents refer to the registered keeper as far as I am aware and I think they state that they may not be the actual owner.

 

I would think that if you read through the agreement word for word it will say clearly who owns the vehicles, how you get to purchase them and what happens if you do not pay. I will be surprised if they need a court order but I do not claim to be anywhere near an expert in that field.

 

I don't want to be a spoil sport but its best you understand the facts and they will be clear to anyone who reads the documents you have posted. I have had a quick look and I think I am right but I have not had time to study carefully.

 

Pedross

[pedross]

I have had another glance here is one of the points I was refering to:

 

You will have no right to terminate this Agreement earlier than on the expiry

of the Period of Hire unless you have exercised your right to become the

owner of the Goods by paying us a sum equal to the Payments on

Termination calculated in accordance with this Agreement.

[DeRichleau]

If the vehicles are in your company name, they will have to sue the company for the wrongful retention of their property. This will take them ages and you can give them all sorts of grief. They will have to come after you seperately for the cash.Not 100% about all of this but it sounds more than likely. Protecting assets is the whole point of a 'Ltd company and I am surprised you opted for personally gauranteeing the payments.

[pedross]

But they are not the assetts of the Ltd Company. The agreement accepted was this:

 

keep the Goods free from claims by any other person, company or other

authority;

 

not do anything which may prejudice or interfere with our rights in the

Goods;

make sure that we, or any agent appointed by us, has the right of

immediate access to the Goods at all times if we become entitled to

retake possession of the Goods from you;

make sure that the Goods remain identifiable, accessible and easily

removable;

make sure that we, or any agent appointed by us, has the right to enter

the premises where the Goods may be from time to time to inspect them

within three working days notice to you of our intention to carry out such

an inspection;

[DeRichleau]

Ok fair shout. So it all depends on weather the agreement is properly executed. Is this agreement governed by the CCA? If not we are in alien territory. As far as I can see this agreement says 'waive your rights under Ltd Company Law'. How enforcable or legal is that.

[chillinlong]

Thanks for everyones comments, it looks like there is a option to purchase for £50 once the hire is finished as said by Nick Pedross...

 

They would not give the cars unless I signed the personal guarantee at the time. Unfortunately I did not think I would be in this situation until business was hit hard during the start of the recession beginning of this year.

 

I will have to try and negotiate a suitable payment plan for the shortfall once I hand the cars back... Some 12k I expect ...

 

Thanks

[pedross]

The final point that I would make is to try and locate 'postggi' and ask for advice as he seems to be very knowledgable in this area which I do not claim to be.

[chillinlong]

Thanks Pedross, I will try to locate my agreement tomorrow and see if it matches with the above...

[postggj]

Ime Looking Into This

 

Even Under A Lease Contact, It Should Be Under The Cca 1974 As Its A Contract Credit Agreement

 

Dont Quote Me As Confirming A Few Things First