Many individuals resort to using the car rental system that ends with ownership when they want to buy cars. In view of what this system grants the possibility of obtaining and using the car without paying the price of the car in one payment and the possibility of paying it in monthly installments, and this is considered a form of financing.
Through this system, banks or companies that practice the activity of leasing ends with ownership purchase the car, and then lease it to the customer in return for paying the price of the car in monthly installments, but with the bank or company retaining ownership of the car, and after paying all the installments, the ownership of the car is transferred to the customer according to According to the terms contained in the contract concluded between them, however, the problem appears when the customer is late in paying the monthly installment on the date agreed upon with the bank or the company, as citizens complain about movements to banks and financing agencies that take over the withdrawal of their vehicles purchased according to the financial leasing system in the event that they are late in paying the installments.
Legalists emphasized that the withdrawal of vehicles in the event of late payment must be through the judiciary, and the financing agencies are not entitled to withdraw the vehicles on their own. And they indicated that the withdrawal of vehicles according to official circulars can only be done through the competent agencies or under their supervision, to reduce customer complaints claiming the existence of identity papers, personal property, or sums of money.
According to the Saudi Central Bank statistics for the year 2021, the volume of vehicle financing for financing companies amounted to 18.76 billion riyals until the end of the first quarter of this year 2022.
Car towing requires a court order
Lawyer and legal advisor Bandar bin Muhammad bin Hussein Al-Amoudi said: It is not permissible and it is not permissible to withdraw the car except by a judicial order from the competent authorities. 5/16/1427 AH, which includes “The car is not withdrawn by companies that practice leasing ending with ownership except through the competent authorities,” in addition to the Monetary Agency’s circular on 8/27/1436 AH, which confirms the companies’ commitment According to the instructions of the Minister of Interior in this regard, and stipulated that “based on Paragraph No. 2 of Article 25 of the financial lease system, the lessee has the right to recover the assets transferred from the lessee in cases that include a contract between the two parties, and this is supervised by entities licensed by the Ministry of Justice.”
He added: The aggrieved party can file a lawsuit with the courts and judicial enforcement departments. Companies operating in the activity of leasing ends with ownership or daily leasing are not entitled to tow cars when customers are late in payment. This behavior is not entitled until after the issuance of a judicial execution order to withdraw the car.
Submit a complaint to the Central Bank
Attorney Khaled Abu Rashid stated that the relationship between the lessor and the lessee is governed by two things. The first is that the leased vehicle gives the lessee the right to use and benefit from it during the lease period, with a promise to own it when the last payment is paid according to the contract. The second thing is that the leased vehicle belongs to the lessor, and he has the right to own it. Retrieving it whenever the tenant violates the terms of the contract, including failure to pay for several months, and this is done under the supervision of the concerned authorities at the Ministry of Interior.
He stressed the need to read the terms of the leasing financing contract before signing it, and explained that in the event that the financing company withdraws the vehicle from the customer without informing the security authorities, the affected person must ensure that there is no judicial order to withdraw the car at the “Nages” judicial portal, and then register a complaint via The Saudi Central Bank, which addresses the financing entity and gives it an opportunity to respond within five working days.
Car recovery is the responsibility of the competent authorities
A circular from the Arab Monetary Agency (Central Bank) confirmed that the recovery of movable assets from the lessee in cases where the contract between the two parties includes the right of the lessor to recover them is exclusively through the competent authorities.
And the circular indicated that based on paragraph (2) of Article (25) of the financial lease system, which stipulates that the lessor has the right, in accordance with the provisions of this system, to recover the assets transferred from the lessee in cases where the contract between the two parties includes the right of the lessor to recover them.
Specialized companies licensed by the Ministry of Justice shall supervise the implementation of the recovery of the asset from the lessee in accordance with the implementation system.
The circular referred to the instructions of the Ministry of Interior not to recover cars in cases where the contract between the two parties includes the right of the lessor to recover them except through the competent authorities.
The circular requires financing agencies licensed to engage in financial leasing activity to comply with the instructions of the Ministry of Interior in this regard, until the Ministry of Justice licenses specialized companies to carry out this task based on the provisions of the above-mentioned article.
She explained that whoever proceeds to recover the movable assets from employees of the financing agencies without referring to the competent authorities is subject to judicial prosecution.
Provisions for compensation and cancellation of bonds and bills of exchange
Lawyer Saad Al-Bahouth said: Judicial rulings were issued to compensate and cancel promissory notes and bills of exchange in car towing cases, and suspended the rights owed by the tenant, and the contractor can claim the value of maintenance and what was spent on the vehicle, including administrative fees, so the car rental system ends with ownership or what is called car rental With the promise to own (the right to own or the promise of it) is a financing system in which the entity licensed by banks or financing companies buys the car you want and then leases it to you in exchange for monthly rental payments. At the end of the contract period, the entity transfers the ownership of the car to you, after paying all Contract payments or payment with a specific amount, by donation, or otherwise, based on what was agreed upon in the contract, and the contract must include data of the contracting parties, car data, insurance data, contract duration, fare amount (cost), method of calculation, and methods of payment, in addition to the agreement of the contracting parties to sign On the terms and conditions of the leasing process, and the purchase by promise of ownership does not obligate the financing entity to transfer ownership of the vehicle, as the financing entity has the right to refrain from transferring ownership because the contract is called a rental contract.
Obliging an agency to write off 120 bills of exchange
The Commercial Court in Jeddah obligated the agent of a car company to pay 4 million riyals in favor of a car rental showroom and charge him the expertise fees, being the loser in the case. Lease to own. The Court of Appeal upheld the verdict and it became final.
According to the facts, the lawsuit boils down to a dispute between the owner of a car rental showroom and a car agency over the contracts of 300 lease-to-own cars.
The owner of the car rental showroom stated that he was committed to paying the monthly payments and installments for the cars on time, but the defendant car agency refused to provide him with statements of accounts showing his financial position for review, in addition to its absolute independence in estimating discounts and accident cars despite obtaining compensation for many cars by the insurance company. The owner of the car rental showroom indicated that there are major manufacturing defects in some cars, and he addressed the defendant car agency, but they did not respond. Which caused him great damage without realizing the benefit from those cars.
The court heard the arguments of the parties and decided to assign an accounting expert to review all contracts, bonds and promissory notes and verify the sale system between the two parties. The place of the lawsuit.
Towing a vehicle and refusing a revocation fine
A Saudi court approved the actions taken by a company specializing in vehicle rental when it decided to terminate a contract concluded between it and a citizen to rent a vehicle for an amount of 160,000 riyals, divided into monthly sections of 2,700 riyals per month. The fines and the value of repairs were considered (from consuming money unlawfully), and the court obligated the citizen to pay an amount of 50 thousand riyals to the leasing company, the value of the lease contract, and the ruling became final.
The court heard all the parties and examined the contract and the exchanged notes. The court considered that the termination took place during the lease stage, as evidenced by the citizen’s responsibility for the unpaid rental payments only, which is an amount of 50 thousand riyals, and the car company does not deserve any fines for the termination of the contract. What the court considers to be consuming money unlawfully, and it ruled obliging the citizen to complete the value of the installments and that the leasing company is not entitled to more than the amount adjudicated in relation to the contract between the two parties.
According to the Consumer Protection Association, companies operating in the activity of leasing ending with ownership or daily leasing are not entitled to tow cars when customers are late in payment, except after a judicial execution order is issued to withdraw the car, and the affected person can file a lawsuit with the courts and judicial enforcement departments.
Procedures for renting a car:
Submit a case to the courts and judicial enforcement departments
Claim the maintenance value, including administrative fees
Register a complaint through the Saudi Central Bank
Adnan Shabrawi (Jeddah) @Adnanshabrawi
