Lease Agreement Woe

Katapolt

First of all - sorry, i know theres hundreds of these on here.

I got my car on a lease agreement on 29th September 2016. I am looking to save money monthly, so have explored the option of canceling it early.

My agreement states


Which i take to mean, as i have paid 20 our of 36 payments, i am over half way. When speaking to the finance company, they say otherwise, as they seem to include the huge payment on the last month (where you pay if you want to buy the car outright) .

Im not really sure if theres anything i can do here, as i was told that last payment was optional, and of course if you dont want to buy it you just hand it back, but theyre taking that sum into account for all calculations working out the 50% id need to have paid, which of course will take me almost up to the end of the agreement anyway.

Sorry for the rant, ive just had no end of problems with the car company and now this, i just want rid.

Mercdriver

The finance company is correct. It is when you have paid 50% or more of the total amount borrowed, including the balloon payment at the end.

As many threads before have stated, it is NOT when you have paid 50% of the payments - that would only work with 0% finance.

Katapolt

Ok, understandable.

I feel so peed off with the whole thing. The sales guy lied about so much and its left me bent over

AndyMc.....

Katapolt wrote: »

Ok, understandable.

I feel so peed off with the whole thing. The sales guy lied about so much and its left me bent over

How can he lie when it’s all there in black and white?

eschaton

Katapolt wrote: »

Ok, understandable.

I feel so peed off with the whole thing. The sales guy lied about so much and its left me bent over

Do you have difficulties in reading too?

If you don't read what you sign then you only really have yourself to blame.

Arklight

TBF he / she was misled in person by the salesman, and the wording could be open to interpretation. If you don't think you have to pay the balloon payment then it's not that derelict to think half the total amount payable means only 1/2 the leasing payments.

Because as far as you are concerned the balloon payment is not going to be paid, rather than being a sum that could be paid. Intentionally misleading imo.

eschaton

Arklight wrote: »

TBF he / she was misled in person by the salesman, and the wording could be open to interpretation. If you don't think you have to pay the balloon payment then it's not that derelict to think half the total amount payable means only 1/2 the leasing payments.

Because as far as you are concerned the balloon payment is not going to be paid, rather than being a sum that could be paid. Intentionally misleading imo.

If he/she read the finance agreement before signing then it would be quite clear about what needs to be paid.

System

Katapolt wrote: »

Which i take to mean, as i have paid 20 our of 36 payments, i am over half way.

No. Its 50% of the total value of the car when purchased, not the amount financed or the number of payments so it does include the balloon. You'll be nowhere near 50% by payment 20 as most of the first payments will be interest and not reducing the amount owed. Usually such agreements work out that you can only VT in the last several months.

Katapolt

i can read, but the agreement itself only says "i was verbally told about ..." and its only now the information i was told in person was incorrect.

the agreement i signed basically just is to sign and say "yes i understand what they told me" but its only now after looking into it, the guy told me incorrect information, but how was i to know that? Like i was also told the amount you pay per mile of your allowance was "minimal, under 9p a mile" and now i have been told its 12.5p, but this was never in writing.

I now understand the issue re the total cost, but yes i do feel i wasnt properly advised, as it doesnt make it that clear and the sales man said if id made half the payments it could be returned.

Im sorry if this makes me seem ignorant, i just made the mistake of trusting them, and i was very naive about thee financial matters back then.

AdrianC

Katapolt wrote: »

Im not really sure if theres anything i can do here, as i was told that last payment was optional, and of course if you dont want to buy it you just hand it back, but theyre taking that sum into account for all calculations working out the 50% id need to have paid

Yes, it's optional to repay that final payment - the "balloon". If you do, you own the car. If you don't, you hand the car back.

But it's very much still money you borrowed... and, as such, it's very much to be included in the Voluntary Termination calculation - which is not based on their contract, but is a legal requirement.


When you drove the car out of the showroom, you only handed over a small part of the value, right? The rest of the money was... borrowed. Some of it, you're paying back monthly, at a rate intended to keep pace with the anticipated depreciation. The rest, you can choose to pay back at the end. If the depreciation's been higher than expected, you're protected, and can just hand the car back. If the depreciation's been lower than expected, you can take advantage by buying then selling the car - or keeping it. In the mean while, you're paying interest on all the money you borrowed, even that "optional" final payment.


If you want the technical way to describe it, then the repayments are amortised over a longer period than the finance contract.

foxy-stoat

Depending on the amount of initial deposit, many of the 36 month agreements with low monthly payments wont reach the 50% VT amount until month 32+

Reading the contract before signing and understanding it really should be a minimum requirement.