Lender permission for self-drive hire

Three separate permissions

Finance agreements commonly restrict hiring the vehicle out to others. If your customers will drive the car, you need the finance provider’s written permission for that use, in addition to suitable hire insurance and any licences or registrations relevant to your operation. None of these substitutes for another, and Sorbus cannot promise any lender will grant permission.

Finance permission

The provider owns the car until the agreement ends. It decides whether hire to third parties is allowed.

Hire insurance

Cover must specifically include self-drive hire. A standard business policy usually will not.

Licences and registrations

Depend on what you do and where. Check with the relevant authority.

What to ask before signing

Ask the broker to raise intended use at the outset so any proposal describes it accurately. Questions worth settling in writing:

• Is self-drive hire expressly permitted?
• Are there restrictions on hirer age, licence history or hire length?
• Can the car be taken abroad?
• What must be notified if the car is damaged or stolen while on hire?

Cars already on finance

If you already have a car on a standard agreement and want to add it to the hire fleet, contact the provider. Putting it on hire without consent may breach the agreement and could affect insurance. Refinancing onto an agreement that permits hire may be an option to discuss, but it is not guaranteed.

Conditions that often come with permission

Where a provider is willing to permit hire, it may attach conditions. Examples worth asking about include minimum hirer age and licence history, whether trackers are required, restrictions on hire to business or private customers, limits on taking the car overseas, and reporting duties after damage or theft. Make sure your rental terms and day-to-day process can meet any condition; permission you cannot comply with offers little protection.

Keep the written permission with the agreement and give a copy to your insurer if asked. If your business model changes, for example adding hourly hire or delivery to customers, check again rather than assuming the original permission covers it.

If permission is refused

A refusal is useful information, not a dead end. You might buy the car with your own funds, look for an agreement written for hire use, or keep that car for chauffeured or personal business use and choose a different vehicle for the hire fleet. What you should not do is put it on hire regardless. Ask the broker why the answer was no, because the reason, whether the vehicle, the hirer profile or the business, often points to the better route.

Accurate disclosure protects you

Describing hire use vaguely to secure an agreement creates risk later, particularly if a claim arises. Sorbus will present use accurately; if a lender will not permit it, that is an answer worth having before purchase.

What happens after you enquire

1. 1

   Enquiry

   You tell Sorbus about the business and the vehicles. It is not an application, and no lender sees it.

2. 2

   Discussion and evidence review

   A broker talks it through and reviews accounts, bookings, licences and vehicle details.

3. 3

   Lender proposal, only if appropriate

   If it looks suitable, and only with your agreement, we approach selected lenders from our panel (not the whole market). Any decision is the lender’s.