Unregulated Car Finance

[susan1349]

Hi Peeps!

New here, and have a question and hopefully someone can help me!

We got a Car on hire purchase (or what we thought it was) in May 2020, right in the middle of the pandemic and we needed a car urgently as we had just had a baby and our other car hire had ended. Just contacted the company (Volvo) to ask how we can hand it back, completely rubbish with fuel and just not economical at all. Sent me back an email saying we had to basically pay £5000 to hand it back early. I then, read the top of the contract and have noticed that it say Unregulated Hire Agreement. This is news to me, as we though it was a regulated agreement. No one at the garage explained any of this to us, just sent us the documents and told us to sign them. I am in the mist of writing a complaint to them as we have been miss sold this insurance and nothing was explained. We would never have agreed to an unregulated agreement.

Has anyone had any "wins" against there provider of finance and been able to hand the car back for free? Has anyone got any advise for me?

Many thanks in advance for any help.

Susan

[R0b]

Hi Susan,

Based on what you've described, it sounds like you have just made a bad bargain. You claim to have been sent the documents and told to just sign them, so you didn't see that those documents contained the words stating that it was an unregulated agreement, yet when you're not happy with the car you suddenly realise what type of agreement it is. That would suggest to me you never read the documents in the first place otherwise you'd have known that it was an unregulated agreement.

Unfortunately, the the courts are not persuaded where those who sign contracts without reading the terms results in a bad bargain or is otherwise unfair, the courts will not rescue you. Unregulated agreements on hire purchase are normally high value cars so it's surprising you would just sign the documents put in front of you without reading any of it.

Other than the insurance element which is likely to be separate the the hire-purchase, I can't see what recourse you have in returning the car without liability unless you can prove somehow there has been a misrepresentation. The fact that you weren't explained about the agreement is not, I think, sufficient for you to hand the car back.

[susan1349]

Hi Susan,

Based on what you've described, it sounds like you have just made a bad bargain. You claim to have been sent the documents and told to just sign them, so you didn't see that those documents contained the words stating that it was an unregulated agreement, yet when you're not happy with the car you suddenly realise what type of agreement it is. That would suggest to me you never read the documents in the first place otherwise you'd have known that it was an unregulated agreement.

Unfortunately, the the courts are not persuaded where those who sign contracts without reading the terms results in a bad bargain or is otherwise unfair, the courts will not rescue you. Unregulated agreements on hire purchase are normally high value cars so it's surprising you would just sign the documents put in front of you without reading any of it.

Other than the insurance element which is likely to be separate the the hire-purchase, I can't see what recourse you have in returning the car without liability unless you can prove somehow there has been a misrepresentation. The fact that you weren't explained about the agreement is not, I think, sufficient for you to hand the car back.

Thank you for your reply. We thought it was a normal business hire that we have had before where we can hand it back once half the payment had been paid or at least been able to sell it and then pay off the outstanding finance like our Mercedes. We should have been given a choice between regulated and unregulated financing agreements and these both should have been clearly explained from the outset. We were not told what unregulated agreement meant and when I asked about handing the vehicle back I then googled what it meant. In my opinion it's not a high value car. Our other vehicles are more expensive and were not put down as an unregulated agreement. If they had explained what it was/meant we would not have went with it. Also, apologies, didn't mean to write insurance! Thanks again for your reply and opinion, much appreciated

[R0b]

Ah well, I presumed you were contracting as a consumer rather than a business. Credit agreements can be deemed unregulated where the credit exceeds £25,000 and the vehicle is predominantly for business purposes, so presumably that is why it is unregulated. If you don't think that's the case then you need to check your agreement or make enquiries to find out why, because those are mainly the two common reasons why it is an unregulated agreement.

The fact that this was a business transaction, makes it even harder for you to consider handing the car back without penalty. Businesses are viewed by the courts as generally having better experience and are therefore less reluctant to step in unless there are exceptional circumstances.

Completely understand why you feel they should have explained this all to you, but on the flip side, you should have asked put your questions to the dealer to satisfy yourself the agreement was suitable for your needs. As above, there are generally less obligations on credit companies where businesses are involved as opposed to consumers.

Don't think I can add anything else other than to say good luck, and if you get a satisfactory outcome, do let us know.