Giving a lease car back early without VT-ing

livetoclimb

Hello.

Here is a slightly unusual situation which I would very much appreciate some advice on. I know it's not the most 'MSE' attitude I'm about to describe, but please bear with me!

My girlfriend took out a lease on a Fiat 500 in March 2015, which is due to expire in March 2018. She still owes two monthly payments, of approximately £120 a month, for January and February. The lease company will collect the car in early March.

However - she is starting a new job, and has been offered a nearly-new car which is a very good deal and which won't be around for long. She wants to take on the new car immediately - and herein lies my question:

Can you return a lease car early? She is happy to make the two last payments immediately and return the car to the lease company. Presumably the lease car company would be happy to have the car returned and paid-up earlier than anticipated?

The reason being is that she doesn't want to be paying two insurance premiums on two cars, especially whilst the no-claims bonus is tied up in the car she isn't using. She has offered the Fiat to a family member for 2 months on the condition they pay their own insurance but temporary insurance is pretty expensive.

The savings on the replacement car are significantly more than the £240-odd she'll be spending to pay off the lease car.

Any thoughts?

wgl2014

Can't see why the lease company would have an issue with that.

Have you asked them?

molerat

There should be no problems doing as you suggest, you have the right to terminate the contract by paying the full amount at any time. Ring them up and ask. Letting another family member use it is the last thing to think of, way too many things could go wrong.

BoGoF

Read the contract would be a good start.

Mine does allow for it but remaining instalments need to be paid. Probably wont be a factor but mileage allowance is pro rata

jacobi1

shaymarriott wrote: »

Can you return a lease car early? She is happy to make the two last payments immediately and return the car to the lease company. Presumably the lease car company would be happy to have the car returned and paid-up earlier than anticipated?

Tell her to read the agreement she signed.

They might not be happy as they can't charge interest on the loan for the last 2 months. Whether she can make an Early Repayment, and on what terms, will be specified in the contract.

livetoclimb

Thanks for the advice - she’s going to speak to the Lease Company tomorrow. Unfortunately we’re in the process of moving House as well so her paperwork could be any of about a million boxes!

I agree about the family member using the car - however he’s having a tough time at the momentand despite the risks it would really help him out for a while.

I believe (because it’s a lease car) the insurance has to be in my partner’s name though, which may make the cost prohibitive and also leaves her open to issues not caused by her.

I’ll onvestigate further and report back!

Thanks again.

neilmcl

Is this an actual "lease", ie, contract hire or is it, as others assume, a finance agreement, eg, HP or PCP?

livetoclimb

It’s an actual lease - there is no option to own the car at the end of the agreement. She spoke to the lease company today who are happy to take the car back early.

Apparently as the hire agreement is almost over and it was a very low interest rate in the agreement there is no issue or penalty for early return this close to the end.

We decided not to lend it to her family member and it will hopefully be picked up next week by the lease company. Her insurance company have been very good and added her new car to the policy with a transfer window on the old car to allow it to remain insured until collection for next to nothing which is great.

Thanks for the advice everyone - and merry Christmas!