Lease Car - options to terminate lease if in financial hardship

Gonna-be-debt-free

I've been looking at our options if we need to batten down the hatches.

I'm in the fortunate position of earning a very good salary, and am still working from home (having taken a voluntary pay reduction to help the company through the situation).
The company are reasonably confident that they'll be able to weather the storm, and we have a reasonable buffer for a period of time if necessary, however it pays to be sensible and so I was looking at what we could reduce if we needed to.

The one thing that really sticks out is that we have 2 lease cars.  They were very affordable in normal times, they are still affordable on the reduced salary, but would definitely be something that we would want to cut if we had to drastically cut back.

The lease contract very clearly states that yes, you can end the lease early, and all you need to do is pay all the money that would have been payable until the end of the contract.  In other words, we owe them all the money of the full lease term whether we have the car or not.  We knew this from the outset.

With the FCA guidance on mortgage holidays, loans etc, I wondered if there might be something similar for this kind of thing? (I suspect not, and can't see anything myself).

Thrugelmir

A "Holiday" is simply a deferral not an exit route. 

Galloglass

There are FCA rules about terminating a lease early. You might check what they said against this

https://www.whatcar.com/car-leasing/leasing-guide/how-can-i-get-out-of-a-car-leasing-agreement/

If you think they have misstated your legal position, then raise a complaint and take the issue to the Financial Ombudsman. Though finance companies are supposed to be FCA regulated, some of the training is woeful so it pays to check.

TheBanker

The FCA are currently considering a scheme to help, although it's likely to be a short payment holiday. The finance provider could offer more. I would suggest waiting a wee while (unless the need is urgent) to see what the FCA come up with. 

Gonna-be-debt-free

Thank you, those are very helpful.  In regard to the whatcar link, unfortunately the terms are very clear in that the settlement fee for voluntary surrender is equivalent to the amount of money still to be paid on the full lease.  i.e. you can give the car back but still have to pay for it for the full remaining duration.
Interesting that the FCA are considering it.  Fortunately I am not yet in a position to have to do anything about it, but I do prefer to have a worst case plan.

Lumiona

You could call for a settlement fee, we ended our agreement a year early due to 2 attempted break ins for the car. We owed about £4k left on the agreement so were concerned it could cost us big time but it had to go asap.
We were well under the mileage expected and got a settlement quote of £650. Great result.

Gonna-be-debt-free

Lumiona said:

You could call for a settlement fee, we ended our agreement a year early due to 2 attempted break ins for the car. We owed about £4k left on the agreement so were concerned it could cost us big time but it had to go asap.
We were well under the mileage expected and got a settlement quote of £650. Great result.

That's very useful to know!  Thank you
Who do you arrange the settlement with?  The bank underwriting the agreement?  (Santander for both of ours).  Unfortunately the broker who arranged it all closed his business down.

Lumiona

We called the leasing broker who advised we speak with the company we had the agreement with. ALD was ours.

Gonna-be-debt-free

thank you