Terminating Your Lease Agreement
A lot of people these days when they want to get a car often go to a car dealership to lease a car instead of traditional funding methods such as HP/PCP. Let’s face it, the prices for car leasing (also known as Personal Contract Hire) can be significantly lower, and because they are renting it, they may feel as if they have less obligation towards it.
There are many reasons why you might want to discontinue your lease - maybe you can no longer afford monthly payments, maybe you want a bigger car to support your family, maybe you’re just the type of person who likes to drive all the latest car models, or maybe you’ve just had enough of your current car and will do anything to get rid of it. Whatever the reason might be, we understand that people change their minds or sometimes their financial situation changes.
Don’t worry - there are some ways to get out of a leasing agreement if you feel the car is no longer meeting your needs. Here are some ways you can break free from your lease if you ever need to.
Option 1: Transfer your lease
Generally speaking, this option is only available between two limited companies. The majority of leasing companies will not transfer a regulated personal contract to another user.
Option 2: Pay the penalty to break free of your lease
Depending on how desperate you are to end your lease, you can return the car back to the leasing company and pay an early termination charge. Remember that you will still be charged any damage/rectification charges if applicable, and any excess mileage charges due.
Option 3: Contact Your Leasing Company
If you are struggling financially and feel as if you can no longer handle the weight of the monthly payments, get in touch with your leasing company.
Some leasing companies are willing to change the payment plan to match how much you can afford. This ultimately means that they can lower your monthly payments for a couple months or even put a halt to your payments altogether. However, this will only be temporary until you are able to resume your payments again. In this instance, they will likely ask you to complete a detailed income and expenditure form.
How Are Termination Fees on Car Leases Calculated?
Each contract type is different, which is why we advise customers to really have a thorough read through of the contract before putting pen on paper.
Different leasing companies will charge different termination fees. Typically, this can be as low as 50 % of outstanding rentals; however, the leasing company has the right to charge you at a rate agreed in their terms and conditions.
If you would like to discuss how to end your car lease early with an Account Manager - request a call back today.
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