Check the fine print with finance leases
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• byNildd Daly Days after buying a leased truck, an owner-driver was told it could be taken away by a credit company which claimed ownership.
A letter from Huddersfieldbased Manor Credit informed the haulier that his leasing contract with ABI Leasing (West Yorkshire) had been terminated and he was no longer the legal owner of the truck. If no response was given within two working days, agents would repossess the vehicle, Manor Credit warned.
Two years earlier the haulier had leased the truck through Bellblock Trading. Under the credit agreement he paid a premium of £700 a month for two years to ABI teasing. Also within the agreement was a £600 purchase option, which the haulier paid in March. The haulier had no idea that the truck was in fact owned by Manor Credit Repossession was only avoided when the operator's lawyers demanded proof of ownership and supplied the haulier's purchase receipt from ABI Leasing.
Following the confusion John Eyre, partner at Skipton-based solicitors Savage Crangle, recommends that any hauliers entering such an agreement should get proof of ownership via the purchase invoice.
Clive Smith, area manager at Manor Credit, says it owned the vehicle from day one but the haulier would not have been aware of that. "We had no idea the leasing agreement Contained a purchase option," he says. "You cannot have a purchase option or a finance leasing agreement."
ABI Leasing's managing director, John Franklin, explains that late payments of up to a year on about 10 other leasing agreements had prompted Manor Credit to take over the accounts.
He adds that the haulier's final payment was about six weeks late and Manor Credit was entitled to repossess the truck, but admits that the letter was "heavy-handed".
"The haulier was caught up in an unfortunate series of events," he says, adding that the haulier concerned now officially owns the truck.