Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • robbiegwa
    • By robbiegwa 7th Sep 17, 4:53 PM
    • 5Posts
    • 0Thanks
    robbiegwa
    Cancelling on a car lease
    • #1
    • 7th Sep 17, 4:53 PM
    Cancelling on a car lease 7th Sep 17 at 4:53 PM
    Hi All,

    Iím in a bit of an odd situation and Iím looking for some guidance. Sorry if this is the wrong forum but I can't see a car finance one.

    I Bought an new Audi A4 on a 3 year lease from VW Finance 1 year ago. However, my wife and I have recently been recruited to work in Australia and the Money is too good to turn down. So the question is.

    Can I sell the car back to VW Finance and then refinance the negative equity with them so that I donít default or is there another option available?

    Thanks,

    Andrew
Page 1
    • molerat
    • By molerat 7th Sep 17, 5:59 PM
    • 17,016 Posts
    • 11,194 Thanks
    molerat
    • #2
    • 7th Sep 17, 5:59 PM
    • #2
    • 7th Sep 17, 5:59 PM
    Need to know exactly what type of lease / finance it is. Many use the wrong terms when describing what they have signed up to.
    www.helpforheroes.org.uk/donations.html
    • robbiegwa
    • By robbiegwa 7th Sep 17, 6:16 PM
    • 5 Posts
    • 0 Thanks
    robbiegwa
    • #3
    • 7th Sep 17, 6:16 PM
    • #3
    • 7th Sep 17, 6:16 PM
    I have a 3 year PCP deal with a final lump sum payment.
    • Tarambor
    • By Tarambor 7th Sep 17, 6:45 PM
    • 1,185 Posts
    • 823 Thanks
    Tarambor
    • #4
    • 7th Sep 17, 6:45 PM
    • #4
    • 7th Sep 17, 6:45 PM
    I hope you have deep pockets. Depreciation in the first year is typically around a third of the value of a new car. Ebay shows ads for 2016 A4s with sub 10,000 miles for as little as £18,000.

    How do you intend to get finance for the negative equity in the UK if you're moving to Australia? You would have a duty to declare to any finance company you are leaving the country.
    • molerat
    • By molerat 7th Sep 17, 7:34 PM
    • 17,016 Posts
    • 11,194 Thanks
    molerat
    • #5
    • 7th Sep 17, 7:34 PM
    • #5
    • 7th Sep 17, 7:34 PM
    You can't "sell back" what you don't own. 3 options

    1) Early termination (not recommended). You hand the car back, they sell it at auction (for peanuts), deduct that from the settlement figure and their added charges and you pay the balance.
    2) Voluntary termination. You need to pay half the total finance amount as stated on your agreement. Deduct what you have paid fom that figure to see how much it will cost you.
    3)Sell the car. Get a settlement figure and see how much that is compared to the value of the car.

    VW finance are unlikely to extend you unsecured finance so any shortfall needs to be found from somewhere else.
    Last edited by molerat; 07-09-2017 at 7:37 PM.
    www.helpforheroes.org.uk/donations.html
    • robbiegwa
    • By robbiegwa 7th Sep 17, 7:52 PM
    • 5 Posts
    • 0 Thanks
    robbiegwa
    • #6
    • 7th Sep 17, 7:52 PM
    • #6
    • 7th Sep 17, 7:52 PM
    So it looks to me that I need to go down the early termination route and then get a bank loan to cover the shortfall.

    I wouldn't declare I'm moving to the bank as then I'd likely be refused credit as without getting the loan to cover the shortfall. VW would be owed for arguments sake 8k and I don't have that in cash. A loan is the only way for the company to be paid.

    I've read elsewhere that I could default on the debt and as it's a civil matter I would be fine but that's not the sort of person I am. I pay my debts.
    • molerat
    • By molerat 7th Sep 17, 8:01 PM
    • 17,016 Posts
    • 11,194 Thanks
    molerat
    • #7
    • 7th Sep 17, 8:01 PM
    • #7
    • 7th Sep 17, 8:01 PM
    ET is usually the worst option as they sell the car for peanuts, well below its market value. You need to do the figures on the other 2.
    www.helpforheroes.org.uk/donations.html
    • jimbo747
    • By jimbo747 7th Sep 17, 9:06 PM
    • 221 Posts
    • 595 Thanks
    jimbo747
    • #8
    • 7th Sep 17, 9:06 PM
    • #8
    • 7th Sep 17, 9:06 PM
    Option 4 is set fire to it / push off a cliff / have a crash and claim off insurance, and then use the gap insurance you purchased (you did get gap insurance, right?) to cover the shortfall. If going abroad you'll lose your no claims after a few years anyway.
    • worried jim
    • By worried jim 7th Sep 17, 9:12 PM
    • 8,549 Posts
    • 13,027 Thanks
    worried jim
    • #9
    • 7th Sep 17, 9:12 PM
    • #9
    • 7th Sep 17, 9:12 PM
    Option five- Are you going away for more than six years? If so, park at Heathrow and cancel the DD. Your credit gets trashed but you aren't here to suffer the effects.
    "Only two things are infinite-the universe and human stupidity, and I'm not so sure about the universe"
    Albert Einstein
    • Tarambor
    • By Tarambor 7th Sep 17, 10:59 PM
    • 1,185 Posts
    • 823 Thanks
    Tarambor
    I wouldn't declare I'm moving to the bank as then I'd likely be refused credit as without getting the loan to cover the shortfall.
    Originally posted by robbiegwa
    That would be fraudulent to make an application knowing you're leaving the country without declaring it as in proper go to prison fraud.

    I've read elsewhere that I could default on the debt and as it's a civil matter I would be fine but that's not the sort of person I am.
    "Not that sort of person" but happy to commit fraud?
    • Tarambor
    • By Tarambor 7th Sep 17, 10:59 PM
    • 1,185 Posts
    • 823 Thanks
    Tarambor
    Option 4 is set fire to it / push off a cliff / have a crash and claim off insurance, and then use the gap insurance you purchased (you did get gap insurance, right?) to cover the shortfall. If going abroad you'll lose your no claims after a few years anyway.
    Originally posted by jimbo747
    Because that doesn't look at all dodgy when you move to Oz within a month.
    • bearcat16
    • By bearcat16 8th Sep 17, 1:25 AM
    • 308 Posts
    • 352 Thanks
    bearcat16
    Just get a settlement for the finance balance, then pay it off with a personal loan.

    You can then sell the car, and pay (a chunk) of the loan off.

    That way you'll get full market value for the car, and only have to pay the shortfall on the finance at a minimal rate (if you get a loan from a mainstream lender like Tesco etc)
    • Robin9
    • By Robin9 8th Sep 17, 6:14 AM
    • 1,654 Posts
    • 1,079 Thanks
    Robin9
    Option 5

    Take the car with you
    Never pay on an estimated bill
    • phillw
    • By phillw 8th Sep 17, 10:14 AM
    • 827 Posts
    • 435 Thanks
    phillw
    Option 5

    Take the car with you
    Originally posted by Robin9
    If I had to put it in a container, paid to ship it and all the fees and paperwork then I might just get it crushed.
    • dresdendave
    • By dresdendave 8th Sep 17, 11:32 AM
    • 639 Posts
    • 738 Thanks
    dresdendave
    That would be fraudulent to make an application knowing you're leaving the country without declaring it as in proper go to prison fraud

    Originally posted by Tarambor

    Traditionally a criminal record is a requirement for a Brit to enter Australia.
    • robbiegwa
    • By robbiegwa 8th Sep 17, 1:23 PM
    • 5 Posts
    • 0 Thanks
    robbiegwa
    That would be fraudulent to make an application knowing you're leaving the country without declaring it as in proper go to prison fraud.



    "Not that sort of person" but happy to commit fraud?
    Originally posted by Tarambor
    It's only fraudulant if you don't pay it back and default on the loan. That would then be obtaining funds by fraudulant means as you had no intention of paying it back Taking a loan out as a UK resident is my choice, at no point in any loan or car finance application does it ask the question "Do you intend to leave the UK after you are accepted for this loan"
    • Potbellypig
    • By Potbellypig 8th Sep 17, 2:23 PM
    • 119 Posts
    • 54 Thanks
    Potbellypig
    You will be out of pocket with this. By quite a lot. So it depends on how long you're leaving for, how much money you have, and whether that extra 'x' thousand is worth it for you.

    1) If you need all the money you can for your new life abroad, then like someone said - just default on the thing.

    2) If you value spending your hard earned cash on this in order to have a clear conscience, then your options have been explained.

    I know which one I'd do.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,774Posts Today

7,549Users online

Martin's Twitter