How to end a business car lease early

[Coach123]

I currently have a car on a business lease through my LTD company and would like to end the contract early. Signed up in August 2023 for 4 years, does anyone know if it’s possible or been through this. Thanks

 

[DontAsk]

What does the lease agreement say?

 

[fisicx]

It’s unlikely without some serious financial penalty.

But as already suggested, what does it say in the lease?

 

[WaveJumper]

As mention already the devil is going to be in the detail, it’s going to cost though, best case at least around 50% of rentals worse case 100% read your t&c’s

 

[Mark T Jones]

As above, it will be in your contract.

I would expect the settlement to be based on a 'discount on receivables '. In plain English, the full amount payable under the contract with a (smallish) discount

 

[bodgitt&scarperLTD]

This is why you never rent stuff as basic as a car unless it's an absoloutely integral part of your well established business (taxi firm for example.)

 

[Chris Ashdown]

The rental company now have a car that's depreciated probably at least 40% since it left their premises so they need to recover at least the depreciation, not going to be a cheap solution but the contract should answer your questions

 

[Lease World]

I currently have a car on a business lease through my LTD company and would like to end the contract early. Signed up in August 2023 for 4 years, does anyone know if it’s possible or been through this. Thanks

You will be able to end the lease early but there will be an early termination penalty to pay. This usually equates to approximately 50% of the outstanding payments plus any excess mileage charges and vehicle damage charges.

 

[Gordon - Commercial Finance]

To put it bluntly, the leasing co have you by the short and curlies. This is exactly why I almost always advise HP as a funding solution rather than a lease. As its a limited co its unregulated so the lender can do whatever the heck they want when you request a settlement, and if they could get away with asking for more than 100% of your outstanding rentals, they would.

Expect something close to 100% of your outstanding rentals, plus charges.

An expensive lesson, but hopefully once is enough.

 

[Lease World]

Not good advice above? If you want to drive a new car over a fixed period for the best price leasing is 100% the best way. With leasing you are only financing the depreciation (cost when new - cost when lease ends) not the whole cost as you would with a Hire Purchase.

 

[Mark T Jones]

Not good advice above?

Countering not good advice with different not good advice?

There are any number of variables to consider. Having been in the industry for 40 years I still can't firmly say what the 'best' option is, and neither can you. (personally used/cash is my current preference)

One thing we do know is the lease is dreadful if you don't plan to keep the vehicle for the primary period.

 

[Lease World]

It depends on the lease Mark. Certainly it is not a good idea to lease a vehicle over a contractually agreed period to expect to end the lease early with no consequences. The leasing company has to make a profit and they do not give away their profit by letting someone end a lease early. Normal cancellation fees are approximately 50% of the balance of the outstanding payments. Compare to Hire purchase or a car loan it is actually generous.

 

[JEREMY HAWKE]

This is why you never rent stuff as basic as a car unless it's an absoloutely integral part of your well established business (taxi firm for example.)

Bodgitt this is exactly why you rent a car so that you give it back
Unlike the OP who has signed a 4 year lease

@Lease World It is not always about getting the cheapest deal over a fixed period
It is often how many miles can you get for as little commitment as possible
Once the bits fall of and it starts to blow oil out the back end I want to give it back with no come back on us
We only want to fix the dents and put new mirrors on

 

[MyAccountantOnline]

I currently have a car on a business lease through my LTD company and would like to end the contract early. Signed up in August 2023 for 4 years, does anyone know if it’s possible or been through this. Thanks

I was leasing a Mercedes Benz and had a motorcycle accident 4 years ago after which I couldn't drive (or walk) for almost a year. Mercedes Benz were absolutely fantastic - they took the car back and cancelled the lease. They told me they have a dedicated department which deals with cases such as this. I don't know if this is common practice and whether any other manufacturers do this.

Depending on the circumstances it may be worth contacting the company involved directly.

 

[Gordon - Commercial Finance]

Not good advice above? If you want to drive a new car over a fixed period for the best price leasing is 100% the best way. With leasing you are only financing the depreciation (cost when new - cost when lease ends) not the whole cost as you would with a Hire Purchase.

Similar structure is also possible on HP, but then I suppose your name suggests you would be incentivised to extol the virtues of leasing over all other options.

I've not given any advice, but my comments definitely couldn't be what you are referring to with your initial question (?)

 

[Lease World]

Similar structure is also possible on HP, but then I suppose your name suggests you would be incentivised to extol the virtues of leasing over all other options.

I've not given any advice, but my comments definitely couldn't be what you are referring to with your initial question (?)

With HP you are funding the total vehicle cost rather than the bit you use.