HP Lease

Solar1982

I am looking to end a car lease early as I am struggling with payments and wanted to know if this is possible without incurring a penalty charge. I read on previous forums this might be possible if half way through contract but these posts were a few years ago.
My contract was signed in May 2016 with Volkswagen Finance.
Also I paid a £500 deposit and they paid the rest of the deposit...does this make a difference?

Hire Purchase £xxx
You must make one repayment of £xxx followed by 47 monthly repayment of £xxx, followed by a final payment of £Xxx payable 48 months after the date for the first payment.

BoGoF

What does your agreement say about termination? It should tell you the magic number you have tp pay to voluntarily terminate. Don't know why you have redacted the figures....it would help.

Mercdriver

Are you sure it is a lease, or is it a PCP which many people mistake for a lease? The difference being that with a PCP you have the option to pay a balloon payment and the car is yours.

It makes a difference as with a PCP you can turn in a car once 50% of what is payable under the agreement has been paid provided the car is in good condition as prescribed by the dealer/finance house via guidelines by BVLR ( Ithink that is the abbreviation...

motorguy

Mercdriver wrote: »

Are you sure it is a lease, or is it a PCP which many people mistake for a lease? The difference being that with a PCP you have the option to pay a balloon payment and the car is yours.

It makes a difference as with a PCP you can turn in a car once 50% of what is payable under the agreement has been paid provided the car is in good condition as prescribed by the dealer/finance house via guidelines by BVLR ( Ithink that is the abbreviation...

Yes, i'd almost certainly say its a PCP deal.

And you're almost right - BVRL Association - BVRLA. Link to their fair wear and tear guidelines here...

https://www.fleetalliance.co.uk/fair-wear-and-tear-guide/

Solar1982

I’ve just checked and it states it’s a Hire Purchase Agreement as this is what is says on the sub title.

Vehicle cash price : £14, 325.13
Less advance payment £1,705.00
Amount of credit. £12,620.13

The payments per month are £189.99.

This is what is stated under termination rights -

You have a right to end this agreement. To do so, you should write to the person you make payments to. They will then be entitled to the return of the goods & to half the total amount payable under this agreement, that is £8,432.26. If you have already paid this amount plus any overdue instalments & have taken reasonable care of the goods, you will not have to pay any more.

BoGoF

What is the totalamount repayable, including interest? How much is the final payment?

k6chris

So you paid £500 deposit, which gives £7,932.26 to go, divided by £189.99 = just under 42 payments before you have paid half - so almost the full term. How many payments have you already made??

Solar1982

I know I have not paid half yet... I am not looking to cancel it until the summer. What confuses me is the sums. It says total amount borrowed is £16,864.52. Then half of this is £8,432.26 which is correct and is what is stated I have to pay back in contract...but if I work out the rest of the figures this is where I get confused.

In the contract is states that I must make one payment of £189.99 and then a further 47 payments of £189.99. So I have worked that out and that is a total of £9119.52. Then a final payment of £6030.00 brings it up to £15,149.52 (not adding up to £16,864.52). I am guessing this has something to do with the Less Advance Payment of £1,705 which is what Volkswagen finance contributed towards...I think I actually only paid a £500 deposit. So my question is where is states in the contract I must pay half which is £8,432.26 then can I deduct the advancement fee from this of £1,705 so in actual fact I must pay £6,727.26?

I hope this makes sense...

Solar1982

I have just posted an update before seeing your response. I think my first payment was in June 16.

BoGoF

Yes, I think (but happy to be corrected) that the £1705 deposit can be deducted, leaving you £6727.26 to pay. This will be just under 36 months payments so should be able to VT May/June this year.

DrEskimo

I suspect it won't be, but I calculate your settlement after 19 payments to be £10,312.23. Any chance it's worth near that in trade value...?

I racked my brain over the impact of discounts/deposit contributions on VT...I'm not sure I ever worked out whether deposit contributions were more advantageous than discounts/part ex. I think they have different impacts. When I think logically, deposit contributions give you the full value in terms of amount paid towards only 50% of the total payable. I thought the reduction in monthly payments would mean it makes little difference, but now I'm not so sure..?!