Car Finance

6. When Things Go Wrong

Although the car remains the property of the finance company throughout the deal (even on a purchase arrangement, you do not obtain ownership until the final payment has been made), you will still have to do most of the legwork if things go wrong.

There are a number of common problems.

6.1 The car is a dud.

• You will have to force the dealer to repair or replace it. This is why it pays to use a reputable dealer.
• If your business is unincorporated (a partnership or sole trader), and you are buying a car or cars worth less than £25,000, you can require the finance company to take some responsibility under the Consumer Credit Act.But it could be hard work, unless you have a cast-iron case.

6.2 The car's performance falls short of your expectations.

• This is too bad. Once you have signed up, you are committed.

6.3 You have an accident and write the car off.

• It is your responsibility to arrange comprehensive insurance cover. This usually costs more for business use.
• Make sure the insurance company knows who is going to drive the car, and anything that affects their driving status (eg endorsements).

6.4 You default by failing to keep up your payments, or by breaching any other terms (eg an arrangement with your creditors).

• Ask about this before you sign. The finance company will be entitled to take the car, but you may be able to come to an arrangement.