Locked Into A Crippling Car Lease?

alunp

Hi

I'm trying to help a friend out here.

Eighteen months ago she took a car lease on a really good car. She was working in field sales at the time so had to drive loads, got a decent car allowance, so decided to go for a reliable car, so got a 3 year lease.

It costs her 305 a month!!

Anyhow, her situation has changed dramatically, she is no longer working at that job, no longer getting that fab car allowance etc, is struggling to pay her bills, and is stuck with this 305 a month bill for the next year and a half.

She contacted the lease company and they told her that if she cancelled the lease she'd be liable for the cash anyhow as its a contract.

This sounds nuts to me. Is she really locked into this? If she could lose this monthly fee she'd get her head above water but as it stands its causing her a big problem.

Can anyone help?

Thankyou

Al

$17mma

Yep I beleive she is locked into it..

I believe though that if she has gone over or paid more than half of the lease agreement ( not sure of the time frame depends on lease) then she can hand the vehicle back. She will be at a loss with no car with all the payments she has made but at least shewonthave those monthly payments. Or she can will have to pay the remainder of the contract and keep the vehicle if keeping the vehicle is an option... I think... something along those lines.


She really needs to check the small print on the agreement.

YorkshireBoy

$17mma wrote:

I believe though that if she has gone over or paid more than half of the lease agreement ( not sure of the time frame depends on lease) then she can hand the vehicle back.

I'm aware this is possible with hire purchase, but is the same true of (contract) lease agreements?

In the case of a lease car, aren't you just signing a "contract to pay", as opposed to a "credit agreement" which would be covered by the CCA and OFT guidelines?

http://www.oft.gov.uk/Consumer/Hire+purchase/default.htm#ending

inmypocketnottheirs

Your friend may be able to appraoch the leasing company to see if they will allow her to transfer the balance of the lease to another interested party, on the same terms. As long as they agree, they will then novate the agreement, and your friend will be released. If it is a lease she has signed then it is a fixed term agreement, and other than as described, may find it difficult to get out of.

Out of interest, what is the vehicle, the specified annual milege, and is servicing included?

MarkyMarkD

I can't see her finding a third party who'd want to take on a half way through lease agreement. It's not going to be a very attractive prospect to anyone else.

The "pay half and hand it back" thing definitely does NOT apply to a lease agreement - only to Hire Purchase.

I honestly think she's going to end up stuck with this agreement.

bob999_2

At work we take out leases for all company cars.
When someone leaves we try to swop cars around sending back the oldest, this way its minmises cost, since your stuck in contract,

By negotiating to send car back early you will save a few hundred on total expenditure, but still pay them money for nothing since they will have car back early , and you wont have one so will have to get one anyway!

MarkyMarkD

That sounds like a sensible approach for a business, bob.

blue_haddock

Yes she is locked into the contract but there are a couple of options.

Most lease companies will allow you to send the vehicle back providing you pay 50% of the remaining payments as a lump sum, so she would have to find just under £3000 to pay the lease off.

The other option would be to try this website http://www.transfercontracts.co.uk/

Han_naH

Go to this site:

http://www.swap-a-lease.co.uk/

They will buy the lease. As do many other firms.
You do have to setup a new (cheaper) lease though, perhaps on a used car for much lower payments.

Also, please remember you can take out a personal loan to settle the finance with the lease co., then immediately sell and return almost all the loan.

Thanks.

Leejp.