Lease van residual value

[mikegml]

I’m a self employed carpenter. I had a new van on a 4 year ‘finance lease’ agreement. (allowing me to offset payments against tax). Ownership of the van remaining with the finance company.

At the end of the leasing period, for tax reasons I cannot keep (own) the van, I am legally obliged to sell the van on to a third party. However, 95% of the sale proceeds are mine, with 5% going to the finance company.

There is an estimated future value of the van at the end of the leasing period which in my case was £2,937. If sold for this amount the finance company would get £146 (5%) and myself £2,790 (95%).

To get to the point. Two months ago a young guy ran into the back of me (at about 60mph!) while I was stationary. Fault was not disputed as there were many witnesses to confirm what happened. The van was a total write off . I was exactly 2 years into the 4 year deal at the time.

His insurers have settled directly with my van finance company to end their interest in the vehicle. However, this deprives me of the £2,790 residual value of the van had the lease run its course.

I’ve got myself another van ( a 10 year old small van as opposed to an almost new large van!) but the main point as far as I’m concerned is I’m £2,790 down.

I have solicitors on the job who I suspect aren’t sure as to whether on not my claim for the residual future value of the van is valid though they’ve not said as much.

Do I have a claim?

Any advice gratefully received.

[Mike Boss]

How are you £2790 out of pocket when you still had another 2 years of paying for the van ?

[mikegml]

As explained, at the end of the four year lease agreement the van is mine, or rather the 'value' of the van is mine, technically I'm not allowed to keep the van, (that would be another type of leasing agreement) I have to sell it onto a third party with 5% of the sale value going to the leasing company and the other 95% to me. So I've lost 95% of whatever the van would have been worth in two years time.

The fact there was another two years to run on the lease is neither here nor there, I would have continued to lease the van for two more years and then realised 95% of whatever the value of the van was at that time, but now I can't cause there is no van!

It's a bit like you having lets' say a £10,000 car on HP; after a while I come along and write off your car, my fault, my insurers pay off all money owing to the HP company leaving you with no car. The HP company are happy, they've been paid but the car which would have been yours at the end of the HP agreement is gone and you've received no other money from your insurers or me. It would be no consolation to you that you're free from the remaining HP payments. This making sense? I'm not being sarcastic mate.

The leasing company who technically always own the van are only interested in recovering 'their' money which they have done. In fact my figure of £2,790 is wrong, I based that on the final 'balloon' payment of £2,937 due to the finance company at the end of the lease, (£2,790 being 95% of £2,937). The value of the van I think would be more than £2,937.

Since my original post my solicitors have looked into it a bit more and in legal speak think I have a 'good head of claim'.