When drivers refuse to hand back leased cars, the result is
often a legal nightmare for fleet providers, says Richard

Lessors can face ownership battles

A thorny issue has come to my attention recently – the matter of
leased vehicles going AWOL. This causes all manner of difficulties
for lessors. For instance, imagine the scenario in which a company
with 50 leased vehicles goes bust, and a number of the vehicles are
not returned, either because the drivers mistakenly think they own
them, or because they may be owed money by their former employer
and believe they are entitled to the vehicle. Interestingly, in
legal terms, these vehicles are not stolen; they have been
“misappropriated” and this is a firmly a civil, rather than a
criminal matter. As a result, it is very hard for lessors to
reclaim what is rightfully ours.

So what happens when a vehicle goes missing? The driver either
continues to use the vehicle without the lessor’s permission or
tries to gain legal ownership. In the former instance, police
unwillingness to become involved often leads to further financial
loss, because lessors often start to receive penalty charge notices
as the legal owners. Without a crime reference number, we are
liable for the charges.

When a driver attempts to obtain legal ownership (possibly with
a view to selling the vehicle) by requesting a V5 from the DVLA,
the lessor will be fined for not notifying the DVLA that the
vehicle has changed keeper – plus the DVLA is likely to grant the
V5 to the individual in order to maintain the integrity of its
database that records all vehicle “keepers”. In this case, the DVLA
argues that the V5 only signifies keeper status and not

The DVLA will let the lessor know that this is happening, but
cannot disclose the name of the keeper as the car is not reported
stolen. They will reveal this information if the lessor applies
(and pays a small fee) for the Registered Keeper details, which a
lessor can do via its repossession agents, for instance. However,
by the time the information is available, the individual will have
a V5 in his or her name; this of course makes it so much easier for
the keeper to sell the vehicle.

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When it comes to insuring the vehicle, there is a national
database that stores all insurance details. Again, because it is
not registered as stolen, the Data Protection Act stipulates that
it is not possible to find out the details of who has insured

More headaches

The lessor is also unable to carry out its statutory
obligations. For instance, when we have to re-license the vehicles,
the law states that we must either re-license the vehicle or make a
statutory off-road notification (SORN). Neither option is good news
for the lessor; re-licensing the vehicle only helps the new keeper
of the vehicle, as official records would indicate that the duty
had been paid; and declaring SORN incurs a fine because we can’t
actually prove that the vehicle is off the road (and most probably
it isn’t).

Ironically, if we breach regulations and neither re-license the
vehicle or declare SORN, there is a chance that it will be reported
for having no disc or be towed away by a council – which is our
best chance of getting it back.

These are all short-term costs; however, if the vehicle cannot
be traced by repossession agents then the longer term cost is far
more serious for us, as the vehicle is likely never to be seen
again. Assistance from the police at an early stage would
significantly increase the chances of the vehicle being found
quickly and potentially avoid subsequent complications, such as the
vehicle having been sold without good title. A small ray of light
for lessors is that the chances of the vehicle being traced quickly
are ever-increasing, due to the huge increase in Automatic Number
Plate Recognition equipment around the country.

Our suggestion would be for the police and DVLA to create a new
definition for the vehicle leasing industry – illegal
misappropriation. This would then be recognised by the powers that
be, so that the lessor can access the information of the new
‘keeper’ and pursue a claim on a civil basis. Principally, this
could stop the DVLA issuing a V5 and stop it from giving the
lessor’s details as owner when it is aware that the vehicle has
been misappropriated.

If we were able to prove this misappropriation to the police who
would legally acknowledge it as such, then we would be in a far
stronger position to reclaim our vehicles when they go missing. It
would be crucial to access relevant information at an early stage,
helping the repossession agents rather than wasting police time. In
today’s linked-up digital world, such a solution is surely not
beyond the realms of possibility.

The author is head of sales at Siemens Motor

Motor Finance Issue: 44 – June 08
Published for the web: June 26 08 15:47
Last Updated: June 26 08 15:53