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Car lease agreement after the deferral payment plan
Daniela2
Posts: 6 Forumite
Hi, I have been leasing my current car with Audi for past 2 years without any missed payments. I have now requested a deferral payment plan which Audi have agreed. I have received a new agreement which commences after 3 months deferral payment plan nevertheless with increase in monthly payment, increase in interest rate and reduction in total amount of payments. In overall, after 3 months of deferral payment plan I would be worse off paying much more then per original agreement. Can you please offer any advice? Thank you D
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P.S. During my conversation with the Deferral team at Audi, the answer was that I can "Accept" or "Reject" the new agreement so not helpful at all.
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Wouldn't know without figures.Mortgage started 2020, aiming to clear 31/12/2029.0
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What they are offering you is correct, you still have to repay the same capital loan and they have the right to vary the interest rate for a new agreement which is what you have requested, the agreement is due to terminate on a certain date (usually due to vehicle age which ties with residual value), so the number of payments will have to be condensed to meet that, interest also accrues even in the months you are not paying. The factors being increased interest and condensed schedule combine to cause this.
Would you be much better off over the total period, or just on a monthly basis?Daniela2 said:In overall, after 3 months of deferral payment plan I would be worse off paying much more then per original agreement.
If you have been managing up until now with the impact of Covid-19 do you actually need to defer payments, or are just thinking it might be nice in the short term? The advice on any of debt is keep repaying if you can, only take a deferral, payment holiday etc. if there is no other way (eg making cuts to non-essentials).Daniela2 said:I have been leasing my current car with Audi for past 2 years without any missed payments.
That is the case with these, there are so many of them that the choice is largely a "like it or lump it" situation, there is no negotiation, it is the current contract which you entered into, or a new one which they are offering at your request.Daniela2 said:P.S. During my conversation with the Deferral team at Audi, the answer was that I can "Accept" or "Reject" the new agreement so not helpful at all.
Your other route may be to take out a personal loan, it may be cheaper than the interest applied on the lease and you could borrow more than you need overall to cover the first three months loan repayments. Or you could take a loan for a smaller amount to tide you over. Alternatively what is the hand back clause in the agreement? If the monthly payments are high enough you could find you are better off either leasing a less expensive car, or taking out a loan and buying one, which would of course be yours at the end rather than having to hand back the lease car and get nothing.
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Hi, basic figures are as follow: interest rate will increase from 6.35% to 6.40% from September for next 21 months. Monthly payments will increase by £89 for next 21 months and the final payment date should be May2022 where as per the original lease agreement the final payment date was Jun2022.
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@Daniela2
What are the monthly payments currently?
Do you know what the capital on the loan currently is?
Just to double check is it a lease or vehicle finance (eg PCP)?
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It's PCP, current repayable capital is £32,477 and current monthly payments are £585.11. Thank you
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Cars lose value. If you extend the period, the costs are more. If you don't extend the period you have to pay more over a shorter period. It's just numbers.
Have you thought about terminating the contract and picking up the same car at an auction when they are all surrendered?- All land is owned. If you are not on yours, you are on someone else's
- When on someone else's be it a road, a pavement, a right of way or a property there are rules. Don't assume there are none.
- "Free parking" doesn't mean free of rules. Check the rules and if you don't like them, go elsewhere
- All land is owned. If you are not on yours, you are on someone else's and their rules apply.
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Love to do so but the amount payable to terminating the agreement is currently too high and out of my budget.
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Love to do so but the amount payable to terminating the agreement is currently too high and out of my budget.Are you sure you asked the correct question? When you get to the halfway point (I'm not sure you are there yet) you have more choices.
https://www.moneyadviceservice.org.uk/en/articles/cut-your-car-finance-hire-purchase-and-other-finance-costs
Pay attention to this partBe aware though that you won’t get anything back if you paid more than half the cost of the car.
- All land is owned. If you are not on yours, you are on someone else's
- When on someone else's be it a road, a pavement, a right of way or a property there are rules. Don't assume there are none.
- "Free parking" doesn't mean free of rules. Check the rules and if you don't like them, go elsewhere
- All land is owned. If you are not on yours, you are on someone else's and their rules apply.
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