Lease Team

Car paranoia for legal eagles?

22/09/2015

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Supposing a firm leases a fleet of cars from a lessor, and overnight all those cars have to be recalled for the same fault. The usual lease agreement says the lessee has to keep paying whether the asset is available to use or not.

But what if the lease is through the car manufacturer’s leasing captive? They’re all in the same group, could the manufacturer’s fault be put onto the leasing captive, giving the lessee good legal reason to stop paying rentals? Wouldn’t the captive then have large repayments to make to the bank every month, but uncovered by rental inflows?

And if that were not the case, what would be the reputational damage to a car lessor if they demand ongoing lease rentals for cars that the lessee does not have in their possession to use? Or are we being paranoid?



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