I regret taking a car lease, can I cancel?

Ciwan

I'm not sure if there's more I can be doing. If the logical choice is to keep the vehicle, then I'll just have to continue setting aside £169.5 for the Hire Purchase payment. I've reduced my Virgin Media bill (saved £20) and my Utilities (saved £300 a year), I've cut down on groceries and totally stopped dining out.

Here's a snapshot of my budget for this month. If I continue on like this, I can be debt free in 5 to 6 years.

My Debt Break Down is this:

Aunt - £5,000
Mum - £8,000
Barclays Loan - £16,000
Student Loans - £20,000
Mortgage - £121,000

TheMoonandBack

Hi Ciwan, you've got some kind of pcp. I had the same thing.
If I have done my sums right you'll have to pay about £3k to get your payments up to the halfway point so you can voluntarily terminate the agreement and give the car back.
It might be worth trying to sell the car as it might reduce the amount you need to pay to get out of it. In my case I was going to have to pay £5k to VT my car. I rang the supplying dealer (Toyota) to see if they would buy it back. They actually gave me a reasonable offer and I needed to pay £3k then to settle the finance.
You have to decide on your own circumstances whether to take the hit. Another 28 payments of 169.50 is £4746 and you'll have had a decent car for 28 more months. As pointed out you probably still need a car.

System

Ciwan wrote: »

hmm, I do not recall signing papers after going out of the Hyundai dealership, but whilst at the Hyundai dealership, I did sign a bunch of stuff cause I was being asked to sign them.

Taking the car is as good as signing. It's quite common that you hand the car back and pay the full cost of the lease...either way, you're stuck with paying a hefty chunk. Realise it from the dealers point of view - they now have a 2nd hand car with all the depreciation that entails - that's why you can't just hand it back.

Ciwan

Thanks, if that's the case I'll keep it. My original thinking was I'll give this back, and buy myself a dirt cheap car that I can own and not worry about miles, scratches..etc. I guess I'm stuck with this for the next 2 years, 5 months.

molerat

Ciwan wrote: »

Just found the document that was posted to me. It says the following:

At the back there is a section that says:

That makes no sense to me! £169.50 x 18 (which is half of the lease agreement) is £3,051. Why does it say I need to pay £5,865.00!?

(169.5 x 36 £6102 + £1500 first payment + £4128 balloon = £11730 / 2 = £5865

You have paid £1500 + (£169.50 x 7 £1186.50 = £2686.50

£5865 - £2686.50 = £3178.50 to end the finance and hand the car back now.

You have 29 payments left so (29 x £169.50 £4915.50 to keep the car for another 28 months. £4915.50 - £3178.50 = £1737 extra to keep the car full term. The soonest you can hand the car back at no cost is in another 19 months (26 month point) when you will have reached the half way point.

So the options are :
a) Pay £3178.50 now, hand the car back and have no car.
b) Carry on paying £169.50 for the next 19 months and hand the car back at no cost, the same overall cost as above but with a car to drive around in for 19 months.
c) Carry on paying £169.50 for another 29 months and hand the car back, that extra 10 months costing you £1737.

b) seems the best option followed by c), a) being the worst option.

The other option is to get an early termination figure and compare that to what the car is worth.

Don't sign any paperwork you are sent. They will sell the car at auction for peanuts, deduct what they get from the ET figure then add their charges most likely leaving you worse off than taking the VT now.

Ciwan

Thanks Molerat, I'll go with option b.

fatbelly

You said in post #1 that you had 50k of debt. Are you meeting the contractual minimum payments on the rest of it ok?

fruitloop04

It looks like you are including your SL in the £50k debt - I am guessing you are on plan 2? Read this post on MSE here: http://www.moneysavingexpert.com/students/repay-post-2012-student-loan

Are your Mom and Aunt wanting the money back soon or can you agree an amount to pay each month? Maybe a SOP would be useful? I found this very useful to see where I could reduce (I am a frivolous spender...make that an EX frivolous spender!!)

MandM90

fruitloop04 wrote: »

It looks like you are including your SL in the £50k debt - I am guessing you are on plan 2? Read this post on MSE here: http://www.moneysavingexpert.com/students/repay-post-2012-student-loan

Are your Mom and Aunt wanting the money back soon or can you agree an amount to pay each month? Maybe a SOP would be useful? I found this very useful to see where I could reduce (I am a frivolous spender...make that an EX frivolous spender!!)

Yes, do read this, though if I'm calculating right you're probably earning over £48k if your take home after SL (and pension?) is £2800. If you're on plan 2 you're relatively young, and so might be one of the few people that should consider paying early. That said, don't stress out about it right now! If family members can wait, I'd pay the highest interest debt first. Once that's gone it will indeed feel like it's 'snowballing' and progress will quicken.


Good luck!

Jon_B_2

£20k of student debt sounds like it could be plan 1, but we are all speculating. The OP needs to provide more substantial details of their debts if they want decent, structured help.