Startline Motor Finance Limited · DRN-6193832

The complaint Mrs T complains that a hire purchase agreement with Startline Motor Finance Limited, under which a car was supplied to her, was unaffordable and that it provided the credit to her irresponsibly. What happened A used car was supplied to Mrs T under a hire purchase agreement with Startline Motor Finance that she electronically signed in July 2023. The price of the car was £11,230 and Mrs T agreed to make 53 monthly payments of £321.56 and a final payment of £331.56 to Startline Motor Finance. Mrs T complained to Startline Motor Finance in August 2025 about the affordability assessment carried out on her application, but it didn’t uphold her complaint. It said that it completed a reasonable creditworthy assessment and Mrs T had a good, stable trace at her current address, with validated income and demonstrated a willingness to pay at the time of application. Mrs T wasn’t satisfied with its response so referred her complaint to this service. Mrs T’s complaint was looked at by one of this service’s investigators who, having considered everything, didn’t think that Startline Motor Finance had acted fairly. He thought that reasonable and proportionate checks would have been to ask Mrs T about her monthly expenditure. He was satisfied that, if reasonable and proportionate checks had been carried out, they would have shown that the agreement wasn’t affordable and sustainable for Mrs T, so he didn’t think that Startline Motor Finance had acted fairly. He said that it should calculate how much Mrs T had paid in total and deduct £208 for each month for fair usage. He recommended that Startline Motor Finance should: end the agreement and collect the car; if Mrs T had paid more than the fair usage figure, refund any overpayments, with interest and remove any adverse information recorded on Mrs T’s credit file regarding the agreement; and, if there are any arrears after the settlement has been calculated, arrange an affordable repayment plan with Mrs T. Neither Mrs T nor Startline Motor Finance has accepted the investigator’s recommendation, so I’ve been asked to issue a decision on this complaint. Mrs T says that the car should stay with her as she’s paid nearly the whole cost of the car and that Startline Motor Finance should be deducting the interest and setting up an affordable repayment for the remaining balance. Startline Motor Finance says that: Mrs T was receiving regular payments into her bank account on top of her salary; it’s unlikely that she’d have disclosed her gambling issues even if it had asked about her spending, and overdraft use isn’t necessarily indicative of financial difficulties. 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. Mrs T applied to Startline Motor Finance for credit to pay for a car to be supplied to her in July 2023 and she declared that her gross monthly income was £2,085. Mrs T provided

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copies of her pay slips for March to June 2023 and I understand that Startline Motor Finance verified her net monthly income to be £1,825. Startline Motor Finance searched Mrs T’s credit file and completed an affordability assessment using data from the Office for National Statistics and the information that it had seen on her credit file. Startline Motor Finance was required to make reasonable and proportionate checks to ensure that any credit to be provided to Mrs T was sustainably affordable for her, before entering into the hire purchase agreement. Mrs T’s credit file showed that she’d defaulted on twelve accounts, was near her credit limit on two credit card accounts, was using her overdraft and had recently been discharged from bankruptcy. As its search of Mrs T’s credit file would have shown signs of recent financial difficulty, I consider that reasonable and proportionate checks would have required Startline Motor Finance to have obtained a more detailed understanding of Mrs T’s financial situation by asking her for information about her expenditure. I don’t consider that the checks that Startline Motor Finance made were reasonable and proportionate in the circumstances of the credit for which Mrs T had applied, so I’ve looked at what it was likely to have discovered if it had obtained information about Mrs T’s expenditure. Mrs T has provided copies of her bank statements for two accounts, one covering March to June 2023 and the other covering April to June 2023. I don’t consider that Startline Motor Finance was required to have reviewed Mrs T’s bank statements as it could have obtained information about her expenditure in other ways, but they are a useful source of information about her income and expenditure. Startline Motor Finance’s affordability assessment showed that Mrs T would have been left with a monthly disposable income of £236.51 after making the monthly payment under the hire purchase agreement, but the investigator has conducted an income and expenditure analysis using the bank statements that Mrs T has provided. It shows that Mrs T would have been left with an average of £228 each month, before making the monthly payment under the hire purchase agreement of £321.56. Startline Motor Finance says Mrs T was receiving regular payments into her bank account on top of her salary, but those payments are from different individuals and I’m not persuaded that they would properly be considered to be income. I consider it to be more likely than not that, if Startline Motor Finance had made reasonable and proportionate checks before providing the credit to Mrs T, it would have concluded that a hire purchase agreement with a monthly payment of £321.56 for 53 months was unlikely to be sustainably affordable for her at that time. I’ve carefully considered all that Startline Motor Finance has said and provided in response to the investigator’s recommendation, but I’m not persuaded that it made a fair lending decision when it provided the credit to Mrs T. I find that it would be fair and reasonable in these circumstances for Startline Motor Finance to take the actions described below to put things right. I’ve also considered whether Startline Motor Finance acted unfairly or unreasonably in some other way, including whether its relationship with Mrs T might have been unfair under section 140A of the Consumer Credit Act 1974. As I’m upholding Mrs T’s complaint for the reasons given above, I don’t consider that I need to make a finding on that. I consider that the actions that I’ve described below result in fair compensation for Mrs T in the circumstances of this complaint and I’m not persuaded that it would be fair or reasonable for me to require Startline Motor Finance to take any actions other than as described below.

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Putting things right I’ve carefully considered Mrs T’s response to the investigator’s recommendation and her request that the car should stay with her as she’s paid nearly the whole cost of the car and that Startline Motor Finance should be deducting the interest and setting up an affordable repayment for the remaining balance. I don’t consider that that would be fair or reasonable in these circumstances. As I’ve concluded that the hire purchase agreement wasn’t sustainably affordable for Mrs T and that Startline Motor Finance shouldn’t have provided the credit to her, I consider that it’s fair and reasonable for that agreement to be ended and for the car to be collected from her, both at no further cost to her, other than as set out below. Mrs T has had the car since July 2023 and I consider that it’s fair and reasonable that she should pay for the use that she’s had from the car over that time. The investigator said that a monthly fair usage charge would be £208, and I consider that it would be fair and reasonable for Mrs T to pay that monthly fair usage charge for the use that she’s had from the car. Startline Motor Finance should calculate the total amount that Mrs T has paid to it under the hire purchase agreement and a fair usage charge for the period that she’s had the car at a monthly rate of £208. If the total amount that Mrs T has paid to it under the hire purchase agreement is more than the fair usage charge that it’s calculated, Startline Motor Finance should refund the difference to Mrs T as an overpayment. It should pay interest on any credit balances that there would have been on the account using the time-weighted average Bank of England base rate plus one percentage point. HM Revenue & Customs requires Startline Motor Finance to deduct tax from the interest payment referred to above. Startline Motor Finance must give Mrs T a certificate showing how much tax it’s deducted if she asks it for one. If the total amount that Mrs T has paid to it under the hire purchase agreement is less than the fair usage charge that it’s calculated, Startline Motor Finance should arrange an affordable repayment plan for the difference between those two amounts. It should treat Mrs T with forbearance and due consideration. Startline Motor Finance should also ensure that any adverse information about the hire purchase agreement that it’s reported to the credit reference agencies is removed from Mrs T’s credit file. My final decision My decision is that I uphold Mrs T’s complaint and order Startline Motor Finance Limited to take the actions described above to put things right. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs T to accept or reject my decision before 20 April 2026. Jarrod Hastings Ombudsman

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