Lex Autolease · DRN-6129846

The complaint Mr G complains that Lex Autolease supplied him with a car that wasn’t of satisfactory quality under a hire agreement. What happened In August 2025, Mr G acquired a car under a hire agreement from Lex. The car was brand new and Mr G was required to pay an initial rental of £1,838.59 as well as 23 further monthly rentals of £204.29. Within the first 30 days Mr G contacted Lex to exercise his right to reject the car under the Consumer Rights Act 2015 (“CRA”). He said that the car had a number of issues including (but not limited to) that it pulled to the left while driving and the driver display would intermittently fail to operate. Lex arranged for an independent inspection of the car. The inspection concluded that there was an issue with the steering as it was pulling to the left, but the other faults Mr G had highlighted could not be replicated. Mr G maintained that he wanted to reject the car. However, Lex didn’t agree to this as it said Mr G needed to take the car into an approved garage for a repair attempt. Mr G complained, but Lex didn’t agree it had acted unfairly or that Mr G was entitled to reject the car. Our investigator recommended the complaint be upheld. They considered that Mr G was entitled to reject the car and that it should be collected at no cost to him. They said the hire agreement should be ended so that Mr G wasn’t liable for further monthly rentals and he should be given a pro-rated refund of his initial rental payment. They also considered that Lex should pay £150 compensation for any distress and inconvenience caused. It is unclear whether Lex accepted the investigator’s findings. In any event, Mr G didn’t accept. He said at the very least he was entitled to a refund of everything he paid from the point at which he asked to reject the car. While Mr G accepted he had continued driving the car past this point, he says this was out of necessity and assurances from Lex that he wouldn’t be financially disadvantaged if Lex later accepted rejection of the car. As there was no agreement, the complaint has been passed to me for a decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Mr G acquired the car under a regulated hire agreement and our service is able to consider complaints relating to these sorts of regulated consumer credit agreements. The CRA covers agreements like the one Mr G entered into. The CRA implies terms into the agreement that the goods that are supplied are of satisfactory quality. Lex is the “trader” for the purposes of the CRA and is responsible for dealing with a complaint about the quality of the car that was supplied.

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The CRA says that the quality of the goods is satisfactory if they meet the standard a reasonable person would consider satisfactory – taking into account the description of the goods, the price and all other relevant circumstances. I think the other relevant circumstances here include the age and mileage of the car at the point of supply. This was a new car, so I think a reasonable person would expect it to be free from defects. An independent inspection commissioned by Lex found that the car was not free from defects. It was pulling to the left when driving in a straight line. Lex appears to suggest this might have been caused by some kind of damage after Mr G acquire it. However, the independent inspection report states there was no damage on the car and makes no findings as external factors being the likely cause. I’m therefore satisfied the available evidence suggests the car wasn’t of satisfactory quality when it was supplied. Lex has also sought to argue this is a minor issue and therefore it isn’t reasonable or proportionate for this to warrant rejection of the car. I’d argue being able to drive in a straight line is one of the more basic expectations of a car, so I’m not persuaded that this was a minor issue in the way Lex has sought to argue. I accept the repair for such an issue might be minor, but nevertheless, it requires a repair to rectify. Under the CRA Mr G is not obliged to accept a repair within the first 30 days of taking possession of the car. In those circumstances he has a right to reject the car and that is what he asked to do. I therefore find it fair and reasonable that Lex accepts rejection of the car. To put things right, Lex should therefore arrange collection of the car ensuring that Mr G is not liable for further monthly rentals from the point it collects the car. It should also provide a pro-rated refund of the initial rental payment Mr G made. In doing so, Lex should assume the payment is spread equally across the full term of the hire agreement and the refund should reflect the number of months remaining on the agreement once the car has been collected. Mr G says that he should be entitled to a refund of everything he has paid under the hire agreement. However, I don’t agree that would be fair or reasonable here and I’ll explain why. Mr G continued to use the car, so my starting point is that it is fair he pays for that use. Mr G says that as he rejected the car he is entitled to a full refund. However, while Mr G stated his intention to reject the car, it could be argued his actions didn’t support his assertion that he was treating the contract at an end. If he was treating the contract at an end, that would mean he no longer wanted the car, for him to continue using it has therefore created some ambiguity. Given that Mr G has continued to drive the car, the overall condition of the car is now materially different to the point at which he asked to reject it. So, to not allow Lex to charge for use could be considered unfair. Mr G has effectively had use of something he should not have had if the rejection had been carried out when he requested it. To provide a full refund in these circumstances would place Mr G in a position of betterment. This is because he would never have realistically been a position where he would have had use of a car for free and that would be the effect of giving him a full refund. Further, the CRA also sets out that where the goods are under a contract for hire (such as here) any refund should only extend to the period of hire the consumer doesn’t receive because the contract is at an end. In this case, as Mr G continued to use the car, he did receive benefit of the goods for an extended period of time. As there was some ambiguity about whether Mr G was treating the contract at an end and he continued to use the car, I think it’s fair and reasonable he pays the monthly hire payments for the time he’s used the car. Notwithstanding what I’ve said about the ambiguity of Mr G’s intention for rejection, I still

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consider it fair and reasonable in all the circumstances of this case that he be allowed to reject the car. I accept in practice Mr G was to a certain extent forced into a situation where if he needed a car, he would need to use this one, so I don’t think it would be fair to not allow him to reject the car especially as Lex ought to have accepted it in the first place. However, this doesn’t change my view on the fairness of Mr G paying for his use of the car. Mr G says that he only continued to drive the car because Lex assured him he wouldn’t be financially disadvantaged if he did. However, I’m not persuaded the remedy I’m setting out does place him at a disadvantage. Mr G would always have needed to pay to stay mobile in some way. As this was a hire agreement he was never going to own the car so his payments for use were never going towards an asset he would eventually own. And I’m satisfied the refund ensures he receives a fair proportion back of his initial rental for the time the car was on hire. Lastly, I think Lex has dealt with the matter poorly and it has understandably caused Mr G some distress and inconvenience in the way it responded to his rejection request. Mr G continued to use a car he didn’t feel entirely safe in which would have added to his distress. However, I’ve not seen anything to suggest his overall usage of the car was significantly impacted. Taking everything into account, I think Lex should also pay Mr G £150 compensation for any distress and inconvenience caused. My final decision For the reasons given above, I uphold this complaint and direct Lex Autolease Ltd to: • End the hire agreement ensuring Mr G is not liable for any monthly rentals from the point the car is collected. • Take back the car ensuring Mr G is not charged for the collection. • Refund, on a pro rata basis, the initial deposit of £1,838.59. • Pay 8% simple interest per year on the above refund calculated from the date Mr G first made the payment to the date of settlement. • Pay £150 compensation for the distress and inconvenience caused. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr G to accept or reject my decision before 23 April 2026. Tero Hiltunen Ombudsman

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