Millions of people across the UK choose to lease cars every year and the popularity of leasing is only growing. Car lease companies offer flexible and affordable alternatives to buying a vehicle outright but if you’re new to leasing then it can be a little overwhelming.
One of the biggest myths we hear from first-time leasers is that they’re locked into a contract with no way of getting out. While it’s important to check your lease agreement, for many this simply isn’t true.
In this blog we’ll debunk some myths and find out some of the most common ways that people end a car lease early.
What is a car lease?
A car lease is an agreement between a car lease provider and customer that allows the customer to drive the vehicle of their choice – for a set time and mileage – for a monthly fee. Once the time is up the customer simply hands the car back to their lease provider.
A leaser may not own the vehicle but that doesn’t mean they don’t have a duty to use, and look after the car, responsibly – by exceeding the time or mileage in the agreement, or altering the condition of the car, the customer may be liable for penalties.
A car lease can be for as little as one month, one year or for a lot longer, and many providers offer even more support in the form of maintenance plans and warranties. Leasing allows customers to drive a car without the huge cash payments that come with purchasing a vehicle from a dealership.
But just because you’re leasing a car for a set period of time may not mean that you can’t end the car lease early – let’s take a look at some options.
Can you end a car lease early?
This depends on your agreement but often, yes, many leasing companies and agreements will let you end a car lease early but the terms will depend on the lease provider and your contract with them. While most car lease companies won’t encourage you to end your lease early there are some options to do so.
Remember, while some financers may let you end a car lease early it doesn’t apply to all situations.
How can you end your car lease early?
Very often, most leasing providers and financers will give their customers options to end a car lease early. While these vary from contract to contract there a few common ways that you may be able to end your lease.
Car lease early termination fee
Many providers will offer an early termination fee, meaning you can pay a one-off fee to end your car lease. The amount depends on the terms of your lease but will often be some or all of the payments that are still due on the lease.
Of course, the amount and your eligibility for an early termination fee depends on your agreement so it’s up to you to make sure you understand your lease and if early termination is possible in your situation.
Lease transfer
Some agreements will allow you to transfer the lease to someone else, with them picking up the remainder of the contracted time. While this isn’t technically ending the lease, because someone else will be taking your place, it’s a good way for you to exit a lease early. Not all financers will offer this and if they do, it will usually involve a fee as well.
Buyout
A buyout is where the leaser buys the car outright from the leasing company. The price you pay for the buyout may be noted in your agreement and will usually depend on the time left on the lease, the condition of the vehicle.
Trade in
Although it’s uncommon, some leasing companies may allow you to trade your car for another before your lease has ended. While this isn’t always an option, it is worth checking to see if this is possible as it gives you the opportunity to carry on leasing but with a more desirable car that suits your needs.
Repossession
If you’re struggling to make the payments for the lease you can end up defaulting and you will have to surrender the car. This will often have a negative impact, on your credit score for example, so if you do find yourself in this situation speak to your lease provider immediately to fully understand the options available to you.
What to do if you want to end your car lease early
While ending a car lease can seem confusing, there are a few steps you can follow to make sure you know if, how and when you can end your car lease early:
· Do your research – understand what the options are when leasing a car
· Read your lease agreement – this will lay out exactly how and when you can end you lease
· Speak to your car lease provider – have an open and honest discussion with your provider about the options open to you
Ending a car lease or defaulting a payment on your lease can affect your credit score so please contact your lease provider further details.
If you feel like you may want to end your lease early, speak to your provider before signing an agreement, or consider short-term leasing.
Need help leasing a car?
For someone leasing a car for the first time, or for those who have done it before, the process can seem a little confusing – with plenty of cars and leasing options to choose from, you may not know what’s right for you.
At Flexed, we’re here to help you avoid the common mistakes and find the perfect car for you. If you need more advice on how you can lease a car today, or want to find out more about our offers on leasing for both business and personal use, give us a call on 0800 311 8290 or email.
