Sueing Customers?

[Lease&Go]

Hi all

We are a small car leasing company, we are only 8 months old, so we are learning (the hard way) and we would really appreciate some advice please....

We have a customer who has leased a car from us, and basically not returned in, ofcourse this is going to happen from time to time, the Police are not helping at all, they wont see it as "stolen" as we leased it to them.

So, we need to basically go and get the car and drive off with our spare key, which is going to cost us money to get there etc, so I think we will start charging a "set up fee" when people hire a car from us (as we do not take deposits) which will cover the costs of us having to go collect cars. Can we justify a £149.99 set up fee?

The main question at hand here, is, when a customer hires a car from us, they have to provide 3 months bank statements, so we can see that they earn money and when it comes in etc, but how do we go about getting the money back through the courts?

What is the best way to even get the money back? The customer is refusing to even speak to us, if we sue them, even if the judge says they have to pay us back at £10 per week, thats fine for us, how do we go about doing this?

Thanks

 

[FirstClassVirtualOffice]

Why don't you find out what other car lease companies do?

 

[Lease&Go]

I am trying to find out what all companys do when they try to collect money through the courts.

 

[eventdomain]

the Police are not helping at all, they wont see it as "stolen" as we leased it to them.

Did they give you a certain time period to wait to see if it returned? The basis of theft is

the missappropriation of someone elses property with the intention of permanently depriving of

so when does it become theft - 24 hrs, 48 hrs, a week? I'd go nuts if some police officer told me an unreturned car wasnt theft. Someone hasn't returned your property, and I assume you didnt sell the vehicle to them, the Police must act, its their duty to.

 

[arcon5]

What you can do is take a deposit or payment up front via your merchant terminal, store the cross reference ID, change your terms so if the car is unreturned they will be charged £x for recovery - then use te cross reference ID to charge customers.

Don't get too attached to the idea or pursuing customers through the courts, find other ways to protect yourself. Court can be time consuming and costly - then enforcing a judgement can be even more difficult!

What about taking for example 3 months upfront and payment monthly, so they are always 3 months ahead - if they then default you can terminate the contract and recover the vehicle whilst still having some money.

A setup fee may not necessarily be a bad thing, but may loose you business. Or a refundable deposit could be charged and held throughout the duration.

 

[SEOExpert404]

Take upfront payments, and check what other car leasing companies do.

 

are charges to cover the cost of recovering an overdue vehicle in your T&Cs?

 

[Lease&Go]

Thanks all

We do not currently take a deposit as we wanted to be different from all other car leasing companys.

Thats why we need to start a set up fee, which we can use as a deposit but its non refundable, to help cover costs of going to collect the cars.

Do you think £150 is ok?

We have found a company that chase debts which may be the answer, instead of sueing people through the courts.

Anyone know of any debt collection agencies that could help us collect money owed?

Thanks

 

Do you think £150 is ok?

Due respect, but I suspect you may have plucked £150 out of thin air? .. You really should take a hard look at the actual costs and work from there.

few things to think about...

If you have recovered a vehicle from the lessee then they still have a key for it unless you have the locks on the vehicle changed. How much would that cost?

Take a real count of the hours involved in the administration of the recovery .. Your staff are expensive resources and the cost of their time will soon add up. If someone has to go over and recover a vehicle then that's a car and two members of staff utilised in this one task.

If you need even an hour with a lawyer that will cost you more than £150..



Have you considered insuring against this risk?

 

[Lease&Go]

Well the costs we want to cover are the train ticket or fuel to go to the customers house to collect the car, our time, fuel to drive the car back to our office etc, washing the car and valet (£10) etc

And you are right, a new key, we always have a spare key for our cars, so we use the spare key to drive it back, however we then need to get another spare key cut.

Should we say £250 set up fee? We dont want to lose business you see.

But we do need to cover our costs against these things.

 

[Spearmint]

$hit happens doesn't it!

You've a problem there, but I too would be interested to know what other companies like yours do in this scenario!

Even if you charge £250-£1000 as a deposit, it doesn't give you back the true value of the car. A high deposit will put many customers off as well.
Do you have trackers fitted to your cars to enable you to locate them exactly?
You could send someone to retrieve the car and it could be a false address!
Why can't you report the car as stolen, and that way the police are involved, and you may stand a better chance of finding it sooner?
Other scenarios come to mind - could the car be sold on to an unsuspecting buyer, is it now abroad, all of these thoughts must come to mind.
Even if you get it back, how can you recover and charge the perpetrator?
I hope you get it resolved quickly.

 

[Lease&Go]

Hi

The Police do not see it as serious, they said if they had to recover cars from all car hire companys it would take all their time up!

We will always recover the car, we will go get it ourselves, but we want to make sure we can recover the money owed as well.

This is an amazing forum, learning a lot about business in general from here.

 

[Spearmint]

Are you able to consider the car as stolen in this situation? If so, I fail to see how the Police can ignore it!

 

[Lease&Go]

Yes, as the customers are out of lease and still have the cars, even in our rental agreement it states if the car is not returned within 7 days of the end lease date we will report it as stolen.

Do you think a £150 fee is ok? Should we call it a set up fee, a one time fee or an admin fee?

Its just a fee that protects us against recovering the car if we need to.

 

[Spearmint]

Yes, as the customers are out of lease and still have the cars, even in our rental agreement it states if the car is not returned within 7 days of the end lease date we will report it as stolen.

Do you think a £150 fee is ok? Should we call it a set up fee, a one time fee or an admin fee?

Its just a fee that protects us against recovering the car if we need to.

Like I stated earlier, a high deposit (£150 as you've suggested) could put some bonafide customers off as they need the cash to pay it up front. To those with ill intentions it probably doesn't make much difference - Okay, they'll lose the £150 but they have a car indefinitely until its recovered. In the worst case scenario you may never see the car again! I really don't know how to advise you, but I would report it stolen to the Police, irrespective of their opinions.

 

[Spearmint]

Take a look at the terms and conditions of other hire companies, and see what systems they have in place for customers (for want of a better expression) like this. The penalties need to be pretty high I would have thought, which wouldn't worry an honest customer. A high deposit will put honest customers off.

To a lesser extent, than the situation you have, have a read of the following:-

Most people dont realise it, but I discovered through the mishaps of a colleague, that when most of us take our car in for a service and gladly drive away in a courtesy car, usually there is a pretty hefty penalty if you have an accident in that car even if it wasn't your fault. My friend was driving such a courtesy car, and someone happened to bump into her, but when she took the car back to the garage, she immediately had to pay £500 for damage to the courtesy car irrespective of who was to blame!

Don't be put off for imposing high penalties for the customers that default on your terms.

 

[arcon5]

Sorry but tO differentiate yourself by not charging a deposit but then charging a £150-£250 setup fee is ridiculous! I bet most would go for the deposit! At least with a deposit you have it returned and the end of the period.

You don't have to quantify a setup fee to your customer, but it you are only charging it to cover these situations then the numbers you are talking are ridiculous. Not every customer will keep the car, in fact I'm betting it's a very low number like 1 in 20 at most - so if the total number for recovering and restoring is £500 then charging £50 setup fee in this example will cover this. Although only you know the actual figures.

But tbh it seems to me irrespective of any advise youve made up your mind. With a setup fee instead of a deposit it is my opinion that you've now lost your usp.
I'm betting most of these situations though could be prevented through good credit control

 

[arcon5]

Most people dont realise it, but I discovered through the mishaps of a colleague, that when most of us take our car in for a service and gladly drive away in a courtesy car, usually there is a pretty hefty penalty if you have an accident in that car even if it wasn't your fault. My friend was driving such a courtesy car, and someone happened to bump into her, but when she took the car back to the garage, she immediately had to pay £500 for damage to the courtesy car irrespective of who was to blame!

Don't be put off for imposing high penalties for the customers that default on your terms.

It's likely the £500 was to cover their insurance excess.

Unless op is dealing with business customers, it is unlawful to impose financial penalties on consumers so op should be very put off. However there is nothing stopping op from having the customer indemnifying him of all and any losses

 

[Lease&Go]

Hi

Sorry but I am looking for positive feedback only, if your going to call us ridiculous I would rather you refrain from replying to my post.

Usually a deposit is 3 months payments upfront, which is a lot more than the £150 we want to try out.

 

[SneakSMS]

Hi

Sorry but I am looking for positive feedback only, if your going to call us ridiculous I would rather you refrain from replying to my post.

Usually a deposit is 3 months payments upfront, which is a lot more than the £150 we want to try out.

People here aren't inclined to be yes men/women.

 

[bovine]

What have your insurance company said about this? Presumably they cover you for theft of the cars? I would ask them at what point they they would consider the car to be stolen. They set the ground rules for this. Once you have established their criteria in this situation, once it has been defined as stolen, report it to the police, get crime number, put it through the insurance and move on.

I would consider getting tracker covertly fitted to them so you can trace them and collect the car (or employ a professional company to do this for you), but check out all the legalities on this. Might be worth finding our how the log book loan people enforce this sort of thing.

 

[businessfunding]

Sorry, but what you appear to have done is to set up a credit company without a collections policy and therefore without a verfiable bad debt provision, which is commercial suicide.

On this case, get your car back (in person or using collection agents) before it is stripped bare; then go back to the drawing board and review your business plan starting with a recoveries process.

From that you can get a clearer dea of what you eed to take up front to mitigate potential losses - I would suggest it will be something along the lines of 3 rentals and an admin fe - like the others do. (Because they have evaluated their risk).

 

[arcon5]

Hi

Sorry but I am looking for positive feedback only, if your going to call us ridiculous I would rather you refrain from replying to my post.

Usually a deposit is 3 months payments upfront, which is a lot more than the £150 we want to try out.

Who has called you or your business ridiculous? :|

I said to have a 'no deposit required' usp but having a large setup fee is ridiculous. At least with a deposit it is either refunded or applied to the account at the end rather than just loosing it. That is my opinion - if you don't want the general public offering opinions and advise then don't come to a public forum where anybody can post.

In fact I think everything said in this post is very constructive, but it seems you just want to be told what you want to hear.

 

[Lease&Go]

I did not say they were, but if all your going to bring is a negative post, it is probably best not to post at all.

Thanks

 

[evilonion]

Its hardly negative. You have a massive flaw in your business plan and it's been pointed out.
If you decide to correct your business plan you might want to consider the points being made.

In this particular instance either report the car stolen and make an official complaint if the crime is not dealt with. The police have a great way of passing everything off as a civil dispute. That way it keeps you busy with court and leaves their targets nicely met.

If every other lease company charge a deposit dont you think there is a reason why?
Its a market that is saturated with companies. Virtually everything has been tried in the leasing market. If deposits were the way forward all the big companies would already be doing it.

if a deposit is returned at the end of the lease i see that as a better thing than a setup fee that isnt.
I would completely review the business plan and find another way to compete with other companies.
If you view this as negative so be it.

 

[Lease&Go]

Well the difference is, a deposit is usually 3 months payments, which is quite high, where as our set up fee would only be £99 or £149 you see.

I think the way around it, is if they have not cleared their balance within 7 days, we just go and get the car, using their set up fee to collect it.

And just to be more selective with customers.

We really do not want to go down the deposit route as then we have the same business model as everyone else.

 

[amich]

If the leasee is now driving around without your authorization, then I would presume that he is no longer insured; check your policy T&Cs. The police should take a dim view of this.

Additionally, if you are expecting re-appropriation to take somewhat longer, then I would suggest cancelling the insurance for the vehicle (though you may still want damage cover etc). Many of the police cars these days have ANPR capabilities. If they pick up on an uninsured vehicle, they will likely do a stop and confiscate it. You may have to pay to have the car released, but at least you would get it back and with the key.

 

[Suzuki]

Well the difference is, a deposit is usually 3 months payments, which is quite high, where as our set up fee would only be £99 or £149 you see.

I think the way around it, is if they have not cleared their balance within 7 days, we just go and get the car, using their set up fee to collect it.

And just to be more selective with customers.

We really do not want to go down the deposit route as then we have the same business model as everyone else.

Your reasoning is making very little sense.

If you want to use this £149 to go collect the car if I don't return it, then you should refund this money to me if I hand it back on time.

You also keep mentioning £149 is way less than the deposits charged by competitors. While this is technically true, I would far rather pay £1000 which I get back, than £149 which I don't!

Plus as someone already mentioned, if you are looking to steal a car then it makes sense to use the company who charges £149 and doesn't refund, compared to 3 months lease which they won't get back as they're going to steal the car anyway.

 

[Lease4Less]

You sound more like a car rental company than a leasing company but the theory is the same.

The police will not count it as theft because you rented or leased them the vehicle. It is a civil matter, and you will have to pursue them through a county court.

It only becomes a criminal matter if you can prove that they have obtained the vehicle through deception. (i.e took the vehicle with no intention of ever paying). If they cannot pay, you need to repossess the car. (As long as you have made proviosion within your terms and conditions for this then you are within your legal rights to do so.)

If you are finding however that this is happening a lot to you, then maybe you need to revisit your underwriting criteria?

 

[yourcreditmanager]

Hi all

We are a small car leasing company, we are only 8 months old, so we are learning (the hard way) and we would really appreciate some advice please....

We have a customer who has leased a car from us, and basically not returned in, ofcourse this is going to happen from time to time, the Police are not helping at all, they wont see it as "stolen" as we leased it to them.

So, we need to basically go and get the car and drive off with our spare key, which is going to cost us money to get there etc, so I think we will start charging a "set up fee" when people hire a car from us (as we do not take deposits) which will cover the costs of us having to go collect cars. Can we justify a £149.99 set up fee?

The main question at hand here, is, when a customer hires a car from us, they have to provide 3 months bank statements, so we can see that they earn money and when it comes in etc, but how do we go about getting the money back through the courts?

What is the best way to even get the money back? The customer is refusing to even speak to us, if we sue them, even if the judge says they have to pay us back at £10 per week, thats fine for us, how do we go about doing this?

Thanks

A few things, apart from your prospective customers providing three months of bank statements do you any other credit checks on them...? If not I think this is something you should seriously reconsider as soon as possible...!

I'd recommend you have an initial discussion with either Experian or Equifax, the two biggest players in this market to establish what services they can offer that best meet your meets and to talk you through the registration for data protection your business will need to do for credit checking private individuals.

I think this will help weed out the bad pennies in the future... not guaranteed I know but it will help.

Michael