Car Finance Being Cancelled After Modifying

[tigger73]

This one is doing the rounds so thought I'd post it here also. Haven't heard of this happening with VW Finance (yet)...

[Sharkie]

This is quite likely possible where a car is financed (leased really) with a set "return" date and a specified condition upon return (ie milage limit). Such a contract could potentially have a "no-modify" clause in it, which can result in a vehicle being repossessed if that term is breached. BMW Full Circle program could perhaps have this although the web site does not mention it.

Will require a good read of the Terms and Conditions ..... it ALWAYS pays to read the fine print, it is not there for YOUR protection but theirs.

[tigger73]

This is quite likely possible where a car is financed (leased really) with a set "return" date and a specified condition upon return (ie milage limit). Such a contract could potentially have a "no-modify" clause in it, which can result in a vehicle being repossessed if that term is breached. BMW Full Circle program could perhaps have this although the web site does not mention it.

Will require a good read of the Terms and Conditions ..... it ALWAYS pays to read the fine print, it is not there for YOUR protection but theirs.

I'm sure it's probably in there in one form or another (goes to get contract out and read it), however it's one thing to have it in the contract and another completely to cancel the finance and repossess the car.

[Guest001]

What a lot of people dont seem to realise that the car is not THEIRS till its paid for. Therefore the finance company has every right to go crook if you start frigging with it

No offence to Tigger as financial position unknown..

Same with anything you by on HP

[tigger73]

I'm pretty sure in this case the car was being leased. The lease company (in this case BMW Finance) actually own the vehicle and you're essentially hiring it for a monthly fee for an agreed period.

Other types of financial products are different. The vehicle is listed as a security and if you default on the loan they'll repossess to recover what is owed. The ownership is with the individual. So there's some distinct differences there.

[Ozsko]

Who knows for sure that a vehicle under finance is wholly owned by the borrower? Has anyone here got a car under finance and read the whole agreement and can comment? As an uneducated observation, the car has to be insured as part of the agreement, does that imply ownership by the finance company? It will be interesting if someone actually can quote a finance agreement.

[Dutch77]

How long is a piece of string?

It will be finance-type dependent. Under a lease arrangement it is quite clear, and under a HP similarly it sits with the lender (albeit their are specific tax rules that modify this for business lends). However under the more common CM the lender only has a 'mortgage' over the goods via the PPSR - but they would also be well within their rights to put a unmodified clause in their contracts to protect their security.

At the end of the day - it's a rare circumstance, as you're reliant on the dealer service effectively talking to finance and raising the alarm. That only seems likely under specific guaranteed value type leases where the security is absolutely critical as the loan is non-recourse if the borrower meets the conditions.

Would I be too worried of this happening on more typical finance.. no. But it's like the original modification - it's a risk, and you gotta pay to play.

[doc_777]

Being a clip from the UK by the looks of it, consumer laws are completely different, consumer purchase and leasing laws are different, so it’s irrelevant to Australia.

[Ozsko]

This guy apparently got caught because he is all over social media telling the world what he has done to the car. BMW did not like the idea and decided to do something about it. Until someone comes up with quotes from a finance agreement here in Oz all the comments are conjecture at best.

[Transporter]

Being a clip from the UK by the looks of it, consumer laws are completely different, consumer purchase and leasing laws are different, so it’s irrelevant to Australia.

I'm not sure.
Lease is lease, the car isn't yours and you have to maintain it, so they should be able to sell it, not scrap it at the end of lease.

IMO, if you have to mod the crap out of it, pay for the car you drive first.

[Dutch77]

I don't think it is relevant where the clip took place or how it came about.

It is fairly logical and common sense to conclude that any lease or HP will have clauses preventing modification to the vehicle. CMs will be on a case by case basis, but even a fairly broad comment "car to be maintained and serviced in accordance with manufacturer requirements" will rule you out if challenged.

But my other point holds - the chances of the above sequence of events occurring is slim, but it's there all the same.

[Sharkie]

I don't think it is relevant where the clip took place or how it came about.

It is fairly logical and common sense to conclude that any lease or HP will have clauses preventing modification to the vehicle. CMs will be on a case by case basis, but even a fairly broad comment "car to be maintained and serviced in accordance with manufacturer requirements" will rule you out if challenged.

But my other point holds - the chances of the above sequence of events occurring is slim, but it's there all the same.

Agree, any lease where the car has to be handed back to the manufacturer at the end of the term (including where there is a "Guaranteed Future Value"), could be subject to some clause (or a number of clauses) specifying the condition in which the car is to be returned in or in which condition it is to be kept during the term.

Such a clause will likely be fully enforceable in Australia and can lead to an immediate termination of the lease if breached.

The point is, if you modify your car while it is under such a type of lease you are putting at risk not only the manufacturers warranty but also your lease. Lots of us accept that risk, but it is there all the same (in dutch's words ).

[Captain Courteous]

If it were a secured personal loan, like what many of us on here would have, I don't see an issue with mods. The only time your financier might find out, I suspect, is if you're part of a big accident and insurance gets involved (especially if you're at fault). If your dealer is your financier and you mod your car, then bring it to them for service, that's just silly. Go to a specialist.

Lease is another story altogether..

[Ozsko]

No one here has got their car financed and can report what the agreement says? It seems common sense any who has a car leased would figure out he/she does not own it but a finance agreement to buy is not a lease agreement and a personal loan is different again.

[Mattlock]

My cars are typically on novated leases against my salary.

I know (because I asked when I set it up for my Golf R) that I am entitled to modify my car as long as the mods are roadworthy. My lease company can demand a RWC at any time.

They also state that if my mods reduce the value of the car then that is my problem and I will have to make up the difference.


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