Car Lease Expiry Advice

outtadebt

Hi,

I'm looking for some advice as my car lease is about to come to an end. I got a ford focus 1.6 Zetec on the ford options scheme. The agreement comes to an end on May 1st but i'm worried about the fact i've done 12k extra which according to my agreement will cost me £828 (0.06 per mile + VAT). There is a dent in the passenger door as well, which no doubt will cost me as well.

What happens if I am unable to pay this come May 1st? Obviously I have the option of arranging a loan if I want to buy the car but what happens if I just want to hand it back but have to pay about £1300 for excess charges and I can't afford that?

Would I be better off arranging a loan to just buy the car according to the residual value? Any advice/suggestions would be much appreciated.

outtadebt

Sorry should've said that the Guaranteed Minimum Future Value was 3750 and currently I pay 244.58 in my agreement

Hintza

OK I'll state the obvious.........should have thought about mileage before you took out the PCP (I think it's a pcp and not a lease but I stand to be corrected.

You need to do your sums on this but I imagine you still need a car. So it probably makes sense to buy it and run it for a few more years. The fact that you can't afford it is not really the finance company's problem.

If you decide to send it back it will probably be cheaper to have the door repaired but you need to check your contract as to how much they charge for dings and scrapes.

What is the residual and what is the car worth? I wonder if you might be able to haggle on the residual? You argument would be that car is worth say £3,000 but residual is £3,750 and you would be interested in keeping it if they met you half way. I haven't a clue if this will work, the only time I have asked how much they wanted for a car at the end of a lease the figure was a joke.

So crack on with pricing up the repair v the cost if you don't and do your sums. I would also talk to your bank and see ifr you can get a loan authorised just in case you need it for either the purchase or to pay of the outstanding.

outtadebt

Thanks for the reply. Sorry you're right PCP not a lease. I know the mileage is my fault. I had a change in my circumstances which meant that I had to add extra mileage to the car. This was unavoidable.

Thanks for your comments and suggestions they're much appreciated. I just need to go away and do my sums.

loofer

The GMFV was based on you doing X milles over the contract period. You have done an additional 12k miles. Won't make a hughe dent but surely that affects the value of the car so use that as an arguement too.

Have a look at what they are selling for privately. Might be worth buying the car and then selling it privately if you don't really want to keep it. But only worth it if the cost of selling it doesn't exceed your estimate of the £1300 you would have to pay to finance company.

Of course you might not get the money you want for it or it might not even sell at all... plus the hassle of viewings/tyre kickers.

There must have a been a point over tha last 12-18 months where you knew you would be exceeding the milleage allowance. What did you deiced then? That you would just pay it? Might aswell do that... can't expect to get away with not paying (or paying reduced amount).

Hintza

What is the exact model, engine, year of reg (55?) and mileage?

outtadebt

Hi,

It's a Ford Focus 1.6 Zetec (Climate Pack), 5dr, 05 reg and it has done 62k miles.

Lemonade_Pockets

It maybe worth checking what your car is worth as there is a slim chance it is worth more than the GFV, despite the mileage. Ring round a few places that sell car's like yours near you, they might be on the lookout for stock - i hear the auctions are hard work atm. This would circumnavigate the problems of selling privately

Alternatively if the GFV is way above the going rate for cars of that age don't buy it. I.e. if your car is worth £2000 but you will have to pay the finance Co. £3000 your £1000 out of pocket straight away.

If you decide to hand it back it usually works out cheaper to get the repairs done in advance. Smart repair guys can do wonderfull things so its worth doing a bit of homework, instead of just waiting for the bill to drop through the door.
With regard to paying the mileage charge you may be able to negotiate repayment schedule with the finance co if you can't afford it all up front. They usually prefer this solution as opposed to legal proceedings.

Hintza

Not surte if it's the exact model but this is what Glass' says:-

Ford Focus Zetec
1.6 Petrol 5-door Hatchback
5 Speed Manual Front Wheel Drive
Year: 2005 05
Mileage: 62,000




Part-exchange Price:
Excellent condition:
£3610
Average condition:
£3250
Below average condition:
£2900

Mark_Hewitt

outtadebt wrote: »

I'm looking for some advice as my car lease is about to come to an end.

Well it's not a lease it's a hire purchase just like any other. I had one, paid it off and now have another.

I got a ford focus 1.6 Zetec on the ford options scheme. The agreement comes to an end on May 1st but i'm worried about the fact i've done 12k extra which according to my agreement will cost me £828 (0.06 per mile + VAT). There is a dent in the passenger door as well, which no doubt will cost me as well.

What happens if I am unable to pay this come May 1st? Obviously I have the option of arranging a loan if I want to buy the car but what happens if I just want to hand it back but have to pay about £1300 for excess charges and I can't afford that?

Not necessarily. Remember the amount they are quoting is the GUARANTEED value for your car. Which will have been reduced by your extra milage and damage. However, it may well be that your car is worth more than MGFV and will be sufficient to pay off the outstanding balance on your loan.

Would I be better off arranging a loan to just buy the car according to the residual value? Any advice/suggestions would be much appreciated.

Unless you want to buy a new car, then probably. I believe that Ford will refinance you if you want them to, of course, under new terms.

I suspect that it may well be cheaper for you to buy the car, i.e. pay off your loan, than it would to hand the car back and buy a similar one.

I guess you take a punt at the time you take out the agreement. I've financed for 12k miles, even though I'm going to be doing significantly more, but the payments are less. I'm aware of the penalty I get at the end but I'm not intending to trade in at the 3 year point, so it's pretty irrelevant to me.