Leasing a car or van for personal use

Leasing a car or a van means hiring it for a fixed term and handing it back at the end. In UK law, a lease to an individual is usually a consumer hire agreement, and the Consumer Credit Act 1974 has rules for it. This page sets out what the Act says.

What a lease is in law

Section 15 of the Act defines a consumer hire agreement. It is an agreement made with an individual, called the hirer, for the hire of goods. The Act's own words are "the bailment or (in Scotland) the hiring of goods to the hirer".

Two more conditions apply. The agreement is not a hire-purchase agreement, and it is capable of lasting more than three months.

Ending a hire agreement early

Section 101 gives the hirer under a regulated consumer hire agreement a right to end it by giving notice. The notice goes to whoever is entitled to receive the payments.

The notice cannot expire earlier than eighteen months after the agreement was made. Where payments fall due at equal intervals, the minimum notice is one interval or three months, whichever is less. Ending the agreement leaves in place anything the hirer already owed before it ended.

When that right does not apply

Section 101 sets limits. It does not apply to an agreement whose payments in total exceed £1,500 in any year, not counting extra charges for breaking the agreement. It also leaves out certain hire for a business, and hire of goods the hirer means to hire out to others.

So the first thing to check is what your payments add up to over a year. Where section 101 does not apply, the agreement's own terms say whether it can end early, and on what conditions.

Is the firm authorised?

The Financial Conduct Authority (FCA) says almost all firms that provide financial services in the UK must be authorised or registered by it. Its Financial Services Register is the official public record for all firms and individuals.

The FCA says the Register shows what each firm is allowed to offer. A firm marked "No longer authorised" or "Revoked" has had its authorisation cancelled, and the FCA says to avoid dealing with it.

Car finance claims

The FCA has set up a compensation scheme for some people who used finance to buy a car, motorbike or van between 6 April 2007 and 1 November 2024. The scheme covers hire purchase agreements, including Personal Contract Purchase. The FCA lists a car leased on Personal Contract Hire among the exceptions.

In October 2026, the FCA's page said parts of the scheme were suspended after a legal challenge. The challenge was due to be heard in February 2027.

If something goes wrong

The Financial Ombudsman Service asks people to complain to the financial business first. It is a free service, set up by Parliament in 2001, and it investigates complaints about financial businesses.

The FCA says a customer of a firm that is registered but not authorised is unlikely to have access to the Ombudsman if they want to complain.

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