Paying off Car Lease Early

Mr_Munneepennee

I'm 10 months into a 36 month PCH car lease woth VW financial services. I want to simply pay off the outstanding balance in a lump sum and keep the car for the 3 years. I want to do this in order to get a bigger mortgage as my car hire payments are really hurting me in terms of what i can get offered mortgage wise.

Does anyone have any experience of this? Can I do this or not?

Any help is much appreciated.

AdrianC

Only VWFS can answer for sure, but the answer is almost certainly no.

Mr_Munneepennee

Thanks for your response. I don't get why they would say no though? They're not losing any money. In fact they'll probably make even more money because I've been paying interest that's been calculated over 3 years.

TheMoonandBack

If it’s a PCH then you are basically hiring the car. You’ve agreed a time period and a monthly hire cost. I think the only way to end it early would involve returning the car for which there will be a financial penalty.
I would ring VWFS and get it from the horses mouth.
It’s one of the reasons I argue against PCPs and PCHs - you never know when your circumstances might change.

neilmcl

As above, the only ones that can answer this is VWFS but I don't see them going for this.

G_M

What does it say in the terms of the contract? Have you read it?

Mr_Munneepennee

Only mentions early termination. No mention of what I want to do.

Ectophile

Contrary to all the previous answers, I can't see any reason why your making all the payments in one go could possibly be bad for the lease company. Essentially, you are making all the payments early - which helps their cash flow.

movilogo

I want to simply pay off the outstanding balance in a lump sum

Usually you can't simply stop paying and hand keys over to lease company, however, you can always do an early settlement. Just ring them and ask for settlement figure. Effectively you'll pay the loan off and own the car outright.

Cornucopia

PCH agreements (Leases) are not finance agreements, as such. They are hire agreements as stated above.

Only VWFS can say for sure, but based on Lease contracts I have seen, it is unlikely that the OP will reach an amicable (early) settlement with them.

Whilst Leases and PCPs are superficially similar in principle, it is in this area of settlement options where Leases are much more restricted than PCPs.

neilmcl

movilogo wrote: »

Usually you can't simply stop paying and hand keys over to lease company, however, you can always do an early settlement. Just ring them and ask for settlement figure. Effectively you'll pay the loan off and own the car outright.

Cornucopia wrote: »

PCH agreements (Leases) are not finance agreements, as such. They are hire agreements as stated above.

Only VWFS can say for sure, but based on Lease contracts I have seen, it is unlikely that the OP will reach an amicable (early) settlement with them.

Whilst Leases and PCPs are superficially similar in principle, it is in this area of settlement options where Leases are much more restricted than PCPs.

I think you're slightly misunderstanding the OP's intentions. He doesn't want to settle or terminate the lease early, he wants to make a lump sum payment of the rest of the lease hire and still keep the car for the rest of the term.