Car lease finance credit broker regulations?

[Tig]

Hi,
Just wondering whether anyone has advice about the finance on a lease car that my 19 year old daughter managed to somehow obtain last November.

At the time she was (and still is) a full time student studying A levels in college, living at home. She had a very part time job, only a few hours a week earning her around £180pm. She'd recently left that job and got a new part time job as a waitress which she was yet to start and for which she therefore had no payslips.

The car dealership organised finance on her behalf for a brand new Fiat 500. When she brought it home I was horrified as I knew she couldn't afford it, especially with insurance etc on top. The deal is for 3yrs, after which time she can give it back if she wants and walk away, or swap to something else.

I asked her what she'd paid up front and whether myself or my husband were guarantors. Apparently not - we weren't there and there's no way we would have signed anything even if we had been there. She had a perfectly reliable ford KA which she owned outright. Great little car which she sold to a mate about a month after she got the fiat. They just let her drive a brand new car away based on what credit checks exactly? How??


She says the woman organising the finance didn't need wage slips for proof of income. I think my daughter had a Next and Very account at the time with roughly £350 limits. My other daughter was with her at the time the finance was organised and she says the same: they didn't seem to want to see very much to at all to organise the finance. They need to see payslips at the very least surely?

If she were to apply for a credit card she wouldn't stand a hope in hell, in fact she did try and thankfully the responsible lenders said NO, so my question is, how does my daughter have a brand new car in these circumstances? The car is an absolute financial drain on her, a complete waste of money as far as I'm concerned. I can't believe she was allowed to even drive it off the forecourt. I'm still so angry with her but I am mostly angry with the car dealer for organising £10000 worth finance seemingly out of thin air on her behalf. Strangely the woman selling the deal wasn't able to organise finance on one of the many used fiat 500s @£99pm standing on their forecourt but she could on the brand new £180pm flashy new model for which, presumably, she got a nice fat Christmas bonus. My daughter doesn't own anything worth anything to secure against it.

Any ideas anyone about about how the finance was obtained in these circumstances? Either my daughters are being frugal with the facts, didn't understand the facts, or something else isn't right.

Advice much appreciated.
Thanks.

[R0b]

Re: Car lease finance credit broker regulations?

Hello, there could be a number of ways this could have happened, perhaps she gave false information as to her income when making the application for the loan, or the salesperson has falsely input information on the application or some other reason. At 19 with only a part time job, there is of course the question as to how or why the lender agreed to such a high loan given her age, her income and certainly if she has been rejected for credit cards too - if someone has no credit rating lenders would be reluctant to offer credit, especially that amount though I couldn't say for certain that these are the reasons.

They may well have agreed to the loan based on the facts above but I would argue that there could be a case of irresponsible lending here and potentially a breach of the FCA Rules. Offering credit to someone who can only afford to pay the monthly sum and not have any wages leftover is not very responsible lending. If the car was obtained from Fiat, then its possible that the lender is Fiat Financial services who provided the car under a fixed sum loan.

The other problem you have of course is that the loan will be in your daughters name, so technically you have no legal right to request any information or start acting on her behalf without permission and ultimately she will be responsible if she fails to keep up the payments.

Perhaps you may want to make some further inquiries with your daughter and get to the bottom of it. Ask whether they needed her salary information and employment whether full time or part time and what did she respond to this. Then you might want to follow up with the dealership and see a copy of the application too, but she will need to be there as well.

If somethings wrong then a formal complaint would be the starting point and then a complaint to the Ombudsman afterwards, but again, this would have to be instigated with your daughter's permission.

[Tig]

Re: Car lease finance credit broker regulations?

Hi R0b

Thanks very much for your response.

I've been questioning my daughters and a friend who accompanied them. They all say the same - very little proof of anything seemed to be needed. My daughter's friend also has a lease car with a different dealership and she says she had to show them bank statements and utility bills with proof of income and proof of address, outgoings etc but that there was none of that with my daughter, just some kind of credit check. At 19 years old I wouldn't have thought she had enough of a record to be good for £10000 worth of finance even if her record was good from her punctual Next and Very account payment records. Or maybe it could be enough?

Think my next stop will be Citizens Advice, followed by the car dealer if I think we have enough ammo to start asking questions of their finance brokering methods and conduct.

I'll post what happens next in case anyone else is in a similar situation.

Thanks again for your help ��