How Can Companies Repossess Vehicles That Default on Leasing?
Is the vehicle you have leased? Or are you planning to buy a vehicle on lease? It's good to make your vehicle dreams come true. However, leasing a vehicle means that you are subject to an agreement with the relevant financial institution. According to that agreement, you are bound to pay the lease installments. What happens if something happens and you are unable to pay these lease installments continuously? Not much. The company will repossess the vehicle. But can the vehicle be repossessed as you wish? Everyone is talking about this. But what is the real story? MotorGuide Today, we will tell you how companies can repossess vehicles that have defaulted on lease.
How to start a leasing company?
Without a leasing company, you cannot start a leasing finance company as you wish. As stated in the Lease Finance Act, you must meet the qualifications, obtain the necessary permission, and become an institution that operates Yes. Therefore, if you start a leasing company, you must be registered under this act. Or, you must have the right to provide leasing financial services.
Who owns the vehicle when leasing a vehicle?
Here, the vehicle has two rights.
- Absolute ownership
- Registration rights
The absolute ownership of the vehicle is given to the finance company. Then the registration rights of the vehicle are given to the lessee.
How to get the vehicle back to the company?
If the lessee is unable to pay the installments for some reason, the leasing company has legal steps to take possession of the vehicle. That is, the vehicle cannot be seized by force for non-payment of installments.
If more than two installments are not paid, the first thing the financial institution should do is send a letter to the lessee. The letter should state, “You have not paid the installments. Please pay the relevant installments. Pay” notice. If such a letter is sent but the installments are not paid, another legal letter is sent next. It should state, “This tax is over. Therefore, it is illegal for you to keep the vehicle any longer. Hand over the vehicle to us” notice. All these letters should be sent by registered mail to the address given in the lease agreement.
After receiving that letter, the tax payer can come to the financial institution and ask for some relief. Or they can get a restructuring. If the financial institution does not provide such an opportunity, the vehicle can be seized on the basis that the financial lease agreement has been broken.
According to the law book, Section 27 of the 2000 No. 56 states how the financial institution can retake the vehicle. As stated therein, the police can be obtained as much as possible when seizing a vehicle. However, it is not necessary. But usually any financial institution files a police complaint before an institution takes possession of the vehicle. And a police complaint is also filed after the vehicle is taken.
According to the existing law of the country, employees of financial institutions cannot go to agencies where representatives of financial institutions are present. Therefore, they are given a legal letter called "Order to Reclaim the Vehicle". The letter informs them that this right must be brought within the legal framework as a representative of the relevant financial institution.
What if the lessee does not return the vehicle?
If the lessee is not ready to return the vehicle to the leasing company after all these things, the company can file a petition with the District Court. That is, it can request an interim order to allow it to take possession of the vehicle. Here, the lessee can come to court and show reasons for not paying the installments. If the court is satisfied with these reasons, the relevant interim order will be canceled. Then, after hearing the evidence in the relevant trial, a decision will be made at the end of the trial.
But if the lessee does not give such reasons, this interim order will be confirmed. Then the leasing company can take possession of the vehicle.
This is how the vehicles that default on leasing can be repossessed by the relevant companies. Although everyone has talked about it one after another, you now know the details. This is something that needs to be done legally. So, if you are also planning to lease a vehicle, or if you have purchased a vehicle through leasing, you should be aware of the details we have mentioned today. Be sure to tell your friends about this. Then, like you, they will not have to regret buying a vehicle on lease.
