Can I get out of my vehicle lease if my circumstances change?
While a lease contract may not seem like a long time, it’s enough time for your circumstances to change. Sometimes drastically. So you might be asking, ‘can I get out of my lease contract?’
You can. However, the point of a lease contract is that you see it out to the end; they aren’t designed to be finished half way through. But, we understand that things change, and some of these changes are out of your control. So, we’ve written an article explaining your options should you want to get out of your lease contract.
Before we start, it should be noted that this is for contract hire, private contract hire, operating lease or private operating lease. Any other agreement will be dealt with differently.
Can I pay an early termination fee if I want to get out of my lease contract?
Your first option is that you can pay an early termination fee.
You can phone the lease company and say you want to finish the agreement early. They will ask for the mileage, and then they will calculate an early termination fee. If you accept the fee, they will pick the vehicle up and you’ll pay the fee. Simple as that.
Be aware though, you will still be subject to condition charges if you hand it back early. So you need to make sure your car is up to the BVRLA Fair Wear and Tear standard. If not, then you could incur extra charges.
Can I sell my lease car on?
Your second option is not as well-known as the first one. When you phone up the finance house and ask for an early termination fee, also ask them the purchase price. Get these both in writing because in most cases you will have to add the two figures together. This will give you the price to technically buy the vehicle.
You can then advertise the car yourself. Either in something like Autotrader or a car buying website. If you find someone who wants to buy the car, it will cost you less than just handing the car back. However, when you do come to selling your car, be reasonable. Everyone negotiates when buying a car, so set it at a reasonable price. Otherwise you might not sell it.
[vc_single_image image=”34409″ img_size=”article-image”]Alternatively, if you want to change the car because you don’t like it or need another style, then you can go to a dealership or a vehicle broker. Talk to them armed with the information on how much you owe on the vehicle and you could part exchange the vehicle. If you are in negative equity, then they may be able to build this into your next vehicle.
If you do this, then the dealer or broker will clear the finance off for you if it’s just to hand the vehicle back to the lease company. Or, they will pay the lease company the early termination and purchase figure so they can then sell it on to someone else.
Can Someone Else Take on my Lease Contract?
Your third option is to reassign the lease to someone else. However, not all leasing companies will do this, and it’s quite rare.
If you know someone who is interested in taking over your lease car then you need to phone your leasing company to see if it’s possible. If it is, then whoever is taking over your contract will need to contact the lease company with the relevant agreement number and will propose themselves to the company. Of course, you should warn the leasing company that this will be happening to avoid confusion.
Once that person has been approved and the lease documents will be signed, the vehicle is there’s to lease. You may have to pay some admin fees on the way, but it’s pretty straightforward. If you want to know why you have to pay an admin fee then you can read our article here.
It should be noted that if you have a business lease you can only reassign the lease to another business. If you have a private lease then you can only reassign the agreements to a private individual.
What happens if I want to reduce the cost of my lease cost?
If you want to simply reduce the cost of your lease, this is actually a little bit more complicated than if you just wanted to cancel it.
You have to get the early termination figure and purchase price. Then you need to go to a bank or a vehicle broker (who knows what they are doing) and they will be able to offer you a refinance option to buy the vehicle. A good vehicle broker might be able to set up a 4 year personal contract purchase or a hire purchase for up to 5 years. The monthly payments could also be less.
What is important is that you shouldn’t assume it’s going to cost a fortune. It entirely depends on the vehicle and the lease agreement.
We have had customers who have gone through this process with us and actually have made money from terminating early. I know. However, we have also had customers that have wanted to end their contract early and it has made no sense to do so.