Anyone early terminated their car lease without penalty if residuals increased?

SubaruSeb

During the past year or so, I have heard or read of several people who have been contacted by their local dealerships wanting to buy their cars off them because the current climate of supply chain delays, Covid and other factors mean used and new car prices have risen and so have residual values in many cars' cases. Only this month, a friend of mine sold his low mileage hybrid Mercedes SUV to his local dealer after they contacted him saying it was an in-demand model.

But I'm wondering if anyone has been able to return their lease car early and be in the fortunate position to not have paid the usual 50% of the remaining payments, because the residual values and low miles meant that the car was worth more and made a profit to the funder? I ask because I would return my lease car, which has just over a year remaining on it, if it means I could sort something cheaper out, at a time when my job and marriage both feel insecure. No, I don't have a problem making the monthly payments, but it would be nicer not to have the weight of the lease over me, with freedom and flexibility instead.

macman

Probably depends if you car is one that is in demand used. Someone who does't want to wait a year or so for a new car might pay a premium for a used one with minimal mileage and a few months old only, but sounds like yours is 2 to 3 years old?You have nothing to lose by asking them the question though.

Nobbie1967

Is it actually a lease car that you have rather than a PCP or HP finance deal. The 50% thing only applies to finance deals. You have a much better chance of getting out of the deal early without penalty on a PCP deal at the moment due to high residuals. Only way to find out is to get a settlement figure and then see if you can get that much by selling the car. If it’s a true fixed term lease, then I doubt they would allow you to terminate early without charge.

SubaruSeb

Thanks. It's a popular electric model that I definitely lease, over 2.5 years unusually. I'll ask the original leasing broker on Monday, but the terms from the funder do say 50% of remaining payments under normal early termination circumstances.

Nobbie1967

SubaruSeb said:

Thanks. It's a popular electric model that I definitely lease, over 2.5 years unusually. I'll ask the original leasing broker on Monday, but the terms from the funder do say 50% of remaining payments under normal early termination circumstances.

Thanks for clarifying, I was getting confused with the statutory right to VT under HP/PCP deals. I suspect they’ll hold firm as they already give that discount for early return. Can’t hurt to ask though.

TadleyBaggie

Never seen an early termination clause on a car lease.

Billy-no-Money

I did this last year - had a Kia Ceed leased with ALD (via Kia), with an early termination penalty of 50% of remaining rental. Two years into the lease I got a quote to terminate and there was no penalty. This was 2021 when car prices first got silly and the mileage was ridiculously low but it shows that it’s always worth getting a quote.

SubaruSeb

Billy-no-Money said:

I did this last year - had a Kia Ceed leased with ALD (via Kia), with an early termination penalty of 50% of remaining rental. Two years into the lease I got a quote to terminate and there was no penalty. This was 2021 when car prices first got silly and the mileage was ridiculously low but it shows that it’s always worth getting a quote.

You’ve inspired me to ask the question at least! Congratulations on getting what sounds like a great resolution! Did the broker get involved, if there was one in the first place, or you just did it all via ALD?

Oh and did ALD's system say no penalty, or did you have to speak to someone there? As my funder's portal currently says the default 50%...

SubaruSeb

Phoned my leasing firm and they said I'd still have to pay 50% of the remaining payments to terminate early even though I've driven well under my mileage allowance and it's a sought after EV model.