Not upheld: hire agreement terms clarity and sales practices complaint against Tesla Financial Services Limited

Decision detail

Summary

Mr O complained about a hire agreement with Tesla Financial Services Limited for a vehicle costing approximately £46,000, which he entered into in May/June 2023. Mr O claimed he was told he would own the car at the end of the term but discovered in February 2025 that he had a hire agreement and was being charged Vehicle Exercise Duty (VED). The ombudsman found that the hire agreement clearly stated it was a lease with Tesla retaining ownership, the order form did not commit Mr O to a purchase, and there was no evidence he was misled about the agreement type. Although Mr O claimed the signing was rushed in a public car park, the ombudsman found the terms were sufficiently clear and Mr O had adequate opportunity to question the agreement before and after signing. The complaint was not upheld, though the ombudsman reminded Tesla to treat Mr O's financial circumstances with forbearance regarding any outstanding balance.

The Ombudsman's reasoning

The ombudsman found that the hire agreement was clear in its terms, explicitly stating it was a hire agreement where Tesla retained ownership. The order form did not commit Mr O to a purchase but rather secured a vehicle with financing terms to be decided later. Although Mr O claimed he was told he would own the car, there was no documentary evidence to support this, and the agreement itself clearly explained the leasing nature of the contract. The location of signing in a public car park, while unusual, did not prevent Mr O from having a fair opportunity to read and understand the terms. Mr O had weeks to question the agreement but did not do so until February 2025 when the VED charge prompted his inquiry. The VED charge was permitted under section 3.8 of the agreement requiring payment of all taxes and duties.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website