Welcome Car Finance: Closure and What it Means

Welcome Car Finance, a UK-based provider of vehicle finance, ceased trading in December 2021. This closure left many customers with questions and concerns regarding their existing finance agreements. Here’s a breakdown of what happened and what it means for those affected. **Why Did Welcome Car Finance Close?** Welcome Car Finance’s parent company, Moneybarn (owned by Provident Financial), decided to shut down the business. The decision was primarily driven by financial performance and a strategic realignment within the Provident Financial group. Welcome Car Finance faced challenges related to its business model, including high operational costs and increasing regulatory scrutiny within the subprime lending market. The impact of the COVID-19 pandemic further exacerbated these existing difficulties. **What Happened to Existing Finance Agreements?** The closure of Welcome Car Finance *did not* automatically cancel existing finance agreements. While Welcome Car Finance itself is no longer operating, its loan book (the collection of outstanding loans) was transferred to another entity. This means that the obligation to repay the loan remains in place. Customers were notified about the transfer and informed of the new entity responsible for managing their accounts. This new entity is responsible for collecting payments, handling queries, and processing any necessary changes to the finance agreement. **What Should Customers Do?** If you had a finance agreement with Welcome Car Finance, it is crucial to: * **Identify the New Lender:** Ensure you know which company is now managing your loan. This information should have been communicated to you directly after the closure. If you’re unsure, contact Moneybarn or check your bank statements for details of where your direct debit payments are now going. * **Continue Making Payments:** It’s imperative to continue making your scheduled payments to the correct lender. Failure to do so will result in late payment fees, damage your credit score, and potentially lead to repossession of the vehicle. * **Update Direct Debit Details:** Make sure your direct debit or standing order is set up correctly with the new lender’s bank details. * **Contact the New Lender with Queries:** If you have any questions about your agreement, need to make changes (e.g., update address), or are experiencing financial difficulties, contact the new lender directly. * **Keep Records:** Maintain records of all communications, payment confirmations, and any correspondence related to your finance agreement. **What About Complaints and Disputes?** If you had an ongoing complaint with Welcome Car Finance before its closure, the new lender is typically responsible for addressing it. You should contact them to understand the status of your complaint and provide any necessary documentation. If you believe you were mis-sold the finance agreement or have other grounds for a dispute, you can also explore your options through the Financial Ombudsman Service (FOS). The FOS can investigate complaints about financial services and potentially award compensation if your complaint is upheld. **In Conclusion:** The closure of Welcome Car Finance was a significant event for its customers. While the company no longer exists, the obligation to repay existing finance agreements remains. It is crucial for customers to identify their new lender, continue making payments, and address any concerns directly with the new management entity. Understanding your rights and responsibilities is essential to avoid potential financial complications.