Consumer Credit Act one-third rule
What it is
The one-third rule is in section 90 of the Consumer Credit Act 1974. Once you have paid at least one-third of the total price under a regulated hire purchase or conditional sale agreement, the lender cannot repossess the car without a court order. If they take it without one, the agreement ends, you can claim back everything paid and can claim compensation. Section 99 gives a separate half-rule termination right: you can hand the car back after paying half the total amount. This page is general legal guidance, not advice on your own agreement. Speak to National Debtline, StepChange or a solicitor for a personal check before acting.
How it applies to you
Most PCO, rent-to-buy and Flexi Own deals sold to Uber, Bolt and Amazon Flex drivers by Splend, Otto, Moove, Kojo and smaller operators can fall under regulated consumer credit if the agreement is under £25,000 and not clearly for business only. National Debtline explains that since April 2008, agreements over £25,000 for business purposes can sit outside CCA protection. If your agreement is regulated hire purchase or conditional sale and you have paid a third or more, any repossession without a court order is potentially unlawful. Take a 34 year old on a four-year rent-to-buy deal at £240 a week totalling about £49,900. If the deal is regulated and he has paid £18,000 so far (more than a third of the total), the PCO firm cannot drive up one night after two missed payments and take the car. Doing so is a section 90 breach. The driver can argue the agreement ended, demand all payments back and claim compensation. At minimum he has a clear complaint to the firm and then to the Financial Ombudsman Service. PCP deals often make the half rule hard to use because so much cost is pushed to a balloon payment at the end, so drivers rarely reach halfway until very late. That does not remove section 90, which kicks in at one-third. Connaught Law's 2025 hire purchase guide and the Oxford Business Law Blog have both confirmed the rule still applies to regulated PCP where it is structured as hire purchase with an option to purchase. If a PCO firm structures a deal to dodge regulation, for example calling it a "membership" while taking regular payments and offering ownership, that raises fairness questions under the FCA's Consumer Duty and the Consumer Credit Act's unfair relationship provisions.
Action steps
- Read your agreement and check whether it says hire purchase, conditional sale, PCP or lease.
- Add up everything you have paid to date. If it is above a third, note the date you crossed it.
- If the firm threatens repossession after you passed one-third, put it in writing.
- If they take the car anyway without court, contact National Debtline or a solicitor immediately.
- Keep every payment receipt. You need the paper trail.
What it is
The one-third rule is in section 90 of the Consumer Credit Act 1974. Once you have paid at least one-third of the total price under a regulated hire purchase or conditional sale agreement, the lender cannot repossess the car without a court order. If they take it without one, the agreement ends, you can claim back everything paid and can claim compensation. Section 99 gives a separate half-rule termination right: you can hand the car back after paying half the total amount.
This page is general legal guidance, not advice on your own agreement. Speak to National Debtline, StepChange or a solicitor for a personal check before acting.
How it applies to gig workers
Most PCO, rent-to-buy and Flexi Own deals sold to Uber, Bolt and Amazon Flex drivers by Splend, Otto, Moove, Kojo and smaller operators can fall under regulated consumer credit if the agreement is under £25,000 and not clearly for business only. National Debtline explains that since April 2008, agreements over £25,000 for business purposes can sit outside CCA protection. If your agreement is regulated hire purchase or conditional sale and you have paid a third or more, any repossession without a court order is potentially unlawful.
Take a 34 year old on a four-year rent-to-buy deal at £240 a week totalling about £49,900. If the deal is regulated and he has paid £18,000 so far (more than a third of the total), the PCO firm cannot drive up one night after two missed payments and take the car. Doing so is a section 90 breach. The driver can argue the agreement ended, demand all payments back and claim compensation. At minimum he has a clear complaint to the firm and then to the Financial Ombudsman Service.
PCP deals often make the half rule hard to use because so much cost is pushed to a balloon payment at the end, so drivers rarely reach halfway until very late. That does not remove section 90, which kicks in at one-third. Connaught Law's 2025 hire purchase guide and the Oxford Business Law Blog have both confirmed the rule still applies to regulated PCP where it is structured as hire purchase with an option to purchase.
If a PCO firm structures a deal to dodge regulation, for example calling it a "membership" while taking regular payments and offering ownership, that raises fairness questions under the FCA's Consumer Duty and the Consumer Credit Act's unfair relationship provisions.
What you should do about it
- Read your agreement and check whether it says hire purchase, conditional sale, PCP or lease.
- Add up everything you have paid to date. If it is above a third, note the date you crossed it.
- If the firm threatens repossession after you passed one-third, put it in writing.
- If they take the car anyway without court, contact National Debtline or a solicitor immediately.
- Keep every payment receipt. You need the paper trail.
Last reviewed
19 April 2026
Internal links this page emits (3-5):
- FCA motor finance redress scheme
- PCO finance comparator tool
- repossession challenge letter
- PCO finance rights guide
- car being taken right now
Primary source used:
Research/Gap/G4.4-fca-pco-motor-finance.md
Before you leave
Sources
- Consumer Credit Act 1974 section 90
- Consumer Credit Act 1974 section 99 voluntary termination
- Consumer Credit Act 1974 section 140A unfair relationships
- National Debtline hire purchase factsheet
- StepChange hire purchase and car finance guide
- Connaught Law hire purchase guide 2025
- FCA Consumer Duty PRIN 2A