On 20 Apr 2025 at 13:42:16 BST, "Dave" <david.christopher.astles@gmail.com> wrote:

Dear all,

A(nother) friend of mine has got herself into a leasing agreement which she can’t afford. I’m wondering what her options are.

Unfortunately, I can’t give much information to help as the aforesaid friend can’t provide me with the agreement she has with the company.

It is a four year agreement and she is two years into it. If it helps, it
is with Volvo and I’m not saying that they have done anything wrong.

However she is currently paying £450/month. Her rent is £750 and that essentially is pretty much all of her take home income.

I think she should prioritise her rent (the car is paid by standing order) above all else. That would mean she returned the car and came to some more convenient arrangement to pay the outstanding amount on the lease
agreement.

She is concerned about her credit rating, not that she’ll be borrowing any time soon.

Any ideas about practical steps, even if it means breaking the agreement?

Do the same concepts about mis-selling car financial products apply as they do to other financial products? This is clearly not affordable by her. She should have known that but what are the vendor’s obligations?

She has one dependent son who has just turned 18 and is studying for his A-levels.

Many thanks. I know it’s a pain in the absence of the agreement but, believe me, I’ve tried hard to get her to unearth it.

It is so dependent on the agreement that the only simple answer is that it
will be very expensive and dependent on the condition of the car.

It must surely be possible to ring the organisation she is paying money to and ask both for a copy of the agreement and for the current early termination charge.

She may have to borrow money elsewhere to buy herself out of the agreement.

I really don't know about the mis-selling side of things. They could perhaps argue that they are not providing credit at all, just a current charge for the use of the car. But I don't know.

--

Roger Hayter

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On 20/04/2025 08:22, Roger Hayter wrote:

On 20 Apr 2025 at 13:42:16 BST, "Dave" <david.christopher.astles@gmail.com> wrote:

Dear all,

A(nother) friend of mine has got herself into a leasing agreement which she >> can’t afford. I’m wondering what her options are.

Unfortunately, I can’t give much information to help as the aforesaid
friend can’t provide me with the agreement she has with the company.

It is a four year agreement and she is two years into it. If it helps, it
is with Volvo and I’m not saying that they have done anything wrong.

However she is currently paying £450/month. Her rent is £750 and that
essentially is pretty much all of her take home income.

I think she should prioritise her rent (the car is paid by standing order) >> above all else. That would mean she returned the car and came to some more >> convenient arrangement to pay the outstanding amount on the lease
agreement.

She is concerned about her credit rating, not that she’ll be borrowing any >> time soon.

Any ideas about practical steps, even if it means breaking the agreement?

Do the same concepts about mis-selling car financial products apply as they >> do to other financial products? This is clearly not affordable by her. She >> should have known that but what are the vendor’s obligations?

She has one dependent son who has just turned 18 and is studying for his
A-levels.

Many thanks. I know it’s a pain in the absence of the agreement but,
believe me, I’ve tried hard to get her to unearth it.

It is so dependent on the agreement that the only simple answer is that it will be very expensive and dependent on the condition of the car.

It must surely be possible to ring the organisation she is paying money to and
ask both for a copy of the agreement and for the current early termination charge.

She may have to borrow money elsewhere to buy herself out of the agreement.

I really don't know about the mis-selling side of things. They could perhaps argue that they are not providing credit at all, just a current charge for the
use of the car. But I don't know.

It seems that whether the agvreement is a form of consumer credit
agreement (subject to the relevant Act) depends upon whether it is a
lease purchase agreement (the sort that has a "balloon payment" at the
end) or a pure contract hire agreement.

That document is all-important.

--
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www.avg.com

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On 20/04/2025 13:42, Dave wrote:

Dear all,

A(nother) friend of mine has got herself into a leasing agreement which she can’t afford. I’m wondering what her options are.

Unfortunately, I can’t give much information to help as the aforesaid friend can’t provide me with the agreement she has with the company.

It is a four year agreement and she is two years into it. If it helps, it
is with Volvo and I’m not saying that they have done anything wrong.

Many thanks. I know it’s a pain in the absence of the agreement but, believe me, I’ve tried hard to get her to unearth it.

'Volvo' may cover various entities.

If the standing order has a more specific company name and reference to
an agreement number, you may be able to get some information.

e.g. https://ficresuk.santanderconsumer.com/customerservices/SettlementRequest.aspx?enc=+gx1EonnENpVWpI/3BxGUw==

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Dave <david.christopher.astles@gmail.com> wrote:

Dear all,

A(nother) friend of mine has got herself into a leasing agreement which she can’t afford. I’m wondering what her options are.

Unfortunately, I can’t give much information to help as the aforesaid friend can’t provide me with the agreement she has with the company.

It is a four year agreement and she is two years into it. If it helps, it
is with Volvo and I’m not saying that they have done anything wrong.

However she is currently paying £450/month. Her rent is £750 and that essentially is pretty much all of her take home income.

The thing about leases (and PCP etc) is they're basically a way of financing the difference between the purchase price of the car to the lease company (likely not the full sticker retail price) and the value of the car at the
end of the lease. The lease is designed to finance that depreciation.

So one thing to be mindful of is that the depreciation will increase as the
car ages, because a 3 year old car with 3N miles on it is worth less than a
1 year old car with N miles on it.

Therefore it's likely the lowest cost will be to hand the car back asap in
as good a condition as possible, which will boost its resale value. However you'd need to read the T&C as to how penalty charges are levied which may affect this calculus.

Speak to the lease company and ask what the charge is for handing the car
back, and see if you can work out a payment plan. Also compare interest
rates with other forms of debt she may be eligible for, although be wary of paying off one kind of debt with a different kind. It mat be worth speaking
to a debt counsellor so you can prioritise basic living expenses and come to
an agreement with the leasing company.

Theo

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On 20/04/2025 13:42, Dave wrote:

Dear all,

A(nother) friend of mine has got herself into a leasing agreement which she can’t afford. I’m wondering what her options are.

Unfortunately, I can’t give much information to help as the aforesaid friend can’t provide me with the agreement she has with the company.

It is a four year agreement and she is two years into it. If it helps, it
is with Volvo and I’m not saying that they have done anything wrong.

However she is currently paying £450/month. Her rent is £750 and that essentially is pretty much all of her take home income.

I think she should prioritise her rent (the car is paid by standing order) above all else. That would mean she returned the car and came to some more convenient arrangement to pay the outstanding amount on the lease
agreement.

Can she assign the car lease, or sub-lease it? I'm not sure whether £450
a month is a good deal for a 2 year old car. That depends on condition
of car, and whether it can be kept after the remaining 2 years of the
lease are up (and how much that costs).

She is concerned about her credit rating, not that she’ll be borrowing any time soon.

Any ideas about practical steps, even if it means breaking the agreement?

Do the same concepts about mis-selling car financial products apply as they do to other financial products? This is clearly not affordable by her. She should have known that but what are the vendor’s obligations?

Well, as far as I can see, the dealers are all registered with the FCA
for their financial services, so they may well have an obligation there.

You might want to ask on a car forum, like: https://forums.moneysavingexpert.com/categories/motoring

She has one dependent son who has just turned 18 and is studying for his A-levels.

Many thanks. I know it’s a pain in the absence of the agreement but, believe me, I’ve tried hard to get her to unearth it.

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On 20/04/2025 13:42, Dave wrote:

Dear all,

A(nother) friend of mine has got herself into a leasing agreement which she can’t afford. I’m wondering what her options are.

Unfortunately, I can’t give much information to help as the aforesaid friend can’t provide me with the agreement she has with the company.

It is a four year agreement and she is two years into it. If it helps, it
is with Volvo and I’m not saying that they have done anything wrong.

However she is currently paying £450/month. Her rent is £750 and that essentially is pretty much all of her take home income.

I think she should prioritise her rent (the car is paid by standing order) above all else. That would mean she returned the car and came to some more convenient arrangement to pay the outstanding amount on the lease
agreement.

She is concerned about her credit rating, not that she’ll be borrowing any time soon.

Any ideas about practical steps, even if it means breaking the agreement?

Do the same concepts about mis-selling car financial products apply as they do to other financial products? This is clearly not affordable by her. She should have known that but what are the vendor’s obligations?

She has one dependent son who has just turned 18 and is studying for his A-levels.

Many thanks. I know it’s a pain in the absence of the agreement but, believe me, I’ve tried hard to get her to unearth it.

You need the contract wording that may well have a early termination clause.

I was going to suggest the leasing company has a duty to mitigate costs
to your friend of yours, and should act immediately after telling them
she cannot pay. However I'm not so sure if this is classed as an HP like agreement where such duty applies, or is simply classed as a loan.

The contract will have a copper plate wording and reflect statute and
case law. That will contain all you need to assess costs and implications.

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