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Non Regulated Agreements for limited companies


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Hi,

 

I am posting here to find out if someone can help me. Two and a half years ago a purchased a car on a hire agreemt from mercedes smart value of finance was £8k. The agreement was in my limited companies name but with myself as a guarantor and wasn't explained what a non regulated contract or agreement was.

 

I am currently in the process of paying of the finance agreement and have subsequently found out that as the agreement is non regulated theycan charge me 4 months interest as an early repayment charge. Nowhere in the contract does it state they can do this nor does it outliine what a non regulated contract is.

 

I have advised the dealership that the loan value is below £25k so it should be regulated and their response was that limited companies are not covered by the CCA, is this correct? Surely my company is covered if I am guarantor and if my company has less then 5 employees?

 

Also if the agreement does not highligh there is a 4 month interest charge penalty for an early repayment can they charge it?

 

I would appreciate any help on this and advice on what to do to resolve my issue in trying to retreive the four months of interest back. Oh and when I approached the finance company they are accepting no liability for the miss selling of the dealership.

 

thank you

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Firstly, you say you purchased the car on a hire agreement; do you mean hire purchase? If it is a hire agreement, you are not purchasing it, only hiring it for the duration of the agreement and it remains the property of the finance company. If it is hire purchase, it is the property of the finance company until you pay the option to purchase fee, when it becomes yours.

 

A limited company is not a 'consumer', which is why the agreement is not regulated by the Consumer Credit Act, and the terms of the agreement will say what happens if you wish to settle the agreement early.

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No finance agreements written in the name of a limited company are regulated, so sub £25k or not, it will never be regulated. How many employees are within the business. You being a guarantor does not make an agreement limited, it is simply additional security that will have been required due to the size/strength of the business.

 

I don't think you have any grounds for miss-selling of the agreement as being a "business" customer, responsibility for understanding what the "business" signs for falls back to the business. A sole trader and partnership with less than 4 partners will work differently and would have been regulated.

 

As for the 4 months interest, you are getting off relatively lightly as I know of high street lenders that will offer little or no rebate on a non reg finance agreement.

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