Ending lease early - worth it?

kmb500

Hi, I took out a lease just over a year ago in May 2017, £255/month. (Although I think £45 is for servicing)

I am anticipating losing my job this week. Obviously will find a new job but I don't expect to be able get another professional job, anything that pays as good as what I'm on now.

Therefore I'm just looking at my options of what I can do. I have emailed my lease company for a quote, but just wondering what people's experience is? Is it actually worth paying the fee to not have that money go out any more?

I'm assuming it is just depreciation VS my payments? if it's £210/month then as of September I've paid 17 months - £3570. The lease is for 3 years / 36 months so I have

Car is a Fiesta ST, current value is about 12-13k. Not sure how much the lease company paid for it (RRP was like 19K) so dont know how the fee is calculated...

Has anyone cancelled early, then regretted it and just wished they carried on to the end? Or if you're pleased that you cancelled it?

I have 5 grand left to pay on lease (including servicing) so just trying to weigh things up.

[Deleted User]

Do you actually have a lease, i.e. you are renting the car for a fixed period, or are you buying the car with a final payment due?

If it's a lease, there is no easy way to return the car until you have made all the payments. Some lease companies will let you terminate early, for example VW - the penalty is 55% of remaining payments.

There is no point doing anything until you have no job and can't afford to make the payment anymore.

kmb500

camelot1971 wrote: »

Do you actually have a lease, i.e. you are renting the car for a fixed period, or are you buying the car with a final payment due?

If it's a lease, there is no easy way to return the car until you have made all the payments. Some lease companies will let you terminate early, for example VW - the penalty is 55% of remaining payments.

There is no point doing anything until you have no job and can't afford to make the payment anymore.

Yes its a lease, PCH I think it's called. There is no final payment option. I have asked them for an early termination quote .
And yeah I know not doing anything until I am actually unemployed but I am just preparing as I fully expect to get sacked.

Indout96

I gave my last Focus ST back 9 months early, I had to pay the remaining 9 payments in full before Ford would take the car back.
But by doing that I saved the cost of 4 new tyres that it would have needed, the final 2 year service (main dealer price) and around 9000 miles of excess mileage charges.
I was originally on Fords friends / families deal where the car was changed every 9 months and cost very little but just after I got the last one the place changed owners and the family members left leaving me stuck with the full 2 years of contract and all its resultant conditions.

kmb500

Indout96 wrote: »

I gave my last Focus ST back 9 months early, I had to pay the remaining 9 payments in full before Ford would take the car back.
But by doing that I saved the cost of 4 new tyres that it would have needed, the final 2 year service (main dealer price) and around 9000 miles of excess mileage charges.
I was originally on Fords friends / families deal where the car was changed every 9 months and cost very little but just after I got the last one the place changed owners and the family members left leaving me stuck with the full 2 years of contract and all its resultant conditions.

Cant see the advantage of getting rid early if you get no discount at all from the full lease. Paying the same amount either way, unless you're racking up massive running costs I cant see that be worth it.

foxy-stoat

kmb500 wrote: »

Hi, I took out a lease just over a year ago in May 2017, £255/month. (Although I think £45 is for servicing)

I am anticipating losing my job this week. Obviously will find a new job but I don't expect to be able get another professional job, anything that pays as good as what I'm on now.

Therefore I'm just looking at my options of what I can do. I have emailed my lease company for a quote, but just wondering what people's experience is? Is it actually worth paying the fee to not have that money go out any more?

I'm assuming it is just depreciation VS my payments? if it's £210/month then as of September I've paid 17 months - £3570. The lease is for 3 years / 36 months so I have

Car is a Fiesta ST, current value is about 12-13k. Not sure how much the lease company paid for it (RRP was like 19K) so dont know how the fee is calculated...

Has anyone cancelled early, then regretted it and just wished they carried on to the end? Or if you're pleased that you cancelled it?

I have 5 grand left to pay on lease (including servicing) so just trying to weigh things up.

I think you are miles off.

You will probably have to pay the full £9180 in total to get out of your lease or risk trashing your credit file.

macman

Why are you concerned about depreciation on a car you will never own?
What matters are the terms on which you can terminate early, vs the cost of going to the full term of 36m.
Only you know what the T&C's of your contract are.

kmb500

macman wrote: »

Why are you concerned about depreciation on a car you will never own?
What matters are the terms on which you can terminate early, vs the cost of going to the full term of 36m.
Only you know what the T&C's of your contract are.

Because I was thinking they base it on the current value of the car.

I dont know what the T&C of my contract are because I've no idea where I put the damn thing lol. And no digital version of it.

foxy-stoat wrote: »

I think you are miles off.

You will probably have to pay the full £9180 in total to get out of your lease or risk trashing your credit file.

Spoke to them and they said they will finalise a quote but usually it's 50% of remaining payments. That's not worth it. They did say I can transfer the lease though so I will look into that.

motorguy

kmb500 wrote: »

Yes its a lease, PCH I think it's called. There is no final payment option. I have asked them for an early termination quote .
And yeah I know not doing anything until I am actually unemployed but I am just preparing as I fully expect to get sacked.

Personally i would drive on at as long as possible.

I know with a job loss there is an urge to get rid of everything that is costing you money, however this will cost you many many thousands to do, and then you'll have no car, and you'll need a car when you get another job.

Hold your nerve in the meantime until you get a clear picture of your finances when you're in a new job. A few months of mild discomfort is much better than an awful lot of pain for no reason now.

foxy-stoat

kmb500 wrote: »

Because I was thinking they base it on the current value of the car.

I dont know what the T&C of my contract are because I've no idea where I put the damn thing lol. And no digital version of it.



Spoke to them and they said they will finalise a quote but usually it's 50% of remaining payments. That's not worth it. They did say I can transfer the lease though so I will look into that.

I think you need to know the facts before doing anything - your originally thinking is off

("I'm assuming it is just depreciation VS my payments? if it's £210/month then as of September I've paid 17 months - £3570. The lease is for 3 years / 36 months so I have")

Have a read of your contract, ask the finance company for a copy.

MountainMan101

Presumably you'll still need a car. It might be worth phoning to see if you can renegotiate the lease - reduce the annual miles, or extend the lease (lowers the cost per month) or shorten the lease (increases the monthly cost but ends it sooner).

For example if they reduced you to a 24 month lease, and you still quit early you'd only have 50% of 8 months to pay not 50% of 20 months.

It might seem like they hold all the cards, but they don't want you to just fail to pay. There is a win-win solution, albeit they win a bit more than you.