Can End Of Lease Payments Affect Your Credit?

Sunday, 28. November 2010

Hi, Graham Hill here, thank you so much for visiting my blog, I hope you learn a lot and as a result end up driving a great car. In order to do so you can get all the information you need by buying my book, An Insider Guide To Car Finance or use me to finance your next car. Happy driving.

I had an interesting chat with a lawyer friend of mine a few days ago. He had returned a lease car at the end of the agreement and received a bill for the repair work that he was angry about for a few reasons. As far as he was concerned, the work was either unnecessary, as a result of fair wear and tear, or the charges were too high for the work required. When he challenged the charges the leasing company took a tough stance and wrote back to explain that non payment could affect his ability to arrange finance in the future as a result of adverse information being recorded on his credit file. After a few letters the leasing company withdrew their charge but it still left the outstanding question over the affect on his credit file had this not been resolved. The implication was that if he didn’t pay the charges he would attract adverse information on his credit file which my solicitor friend suggested is incorrect and is a scare tactic used to try to force people to pay the charges. He sees the charges to be outside the credit agreement as the charges are not included in the cost of the contract, as stated, so non payment cannot be seen as in default of your agreement. I tend to agree although I would say that that should you not pay the leasing company they may end up taking you to court at which, if the court finds in favour of the leasing company, you could end up with a County Court Judgement (CCJ). In turn if this is not satisfied (paid) within one month it will be recorded on your credit file and will affect your ability to obtain credit in the future. However, this is a little different to the apparent threats made on their letters sent with the repair invoices. My advice is therefore to challenge the charges and don’t be phased by any threats that are made in the accompanying letter. If you are concerned take up your concerns with the OFT and the Financial Ombudsman Service or seek the advice of a lawyer. By Graham Hill

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