Published on Thursday 02 April 2020 in Van News
Early Termination Of A Van Lease Explained
Leasing is the cost-effective way to drive brand-new vehicles - as simple as it is convenient. Despite what you might have heard, it's also relatively simple to cancel a lease, but it's vitally important to be aware of the substantial costs & termination fees that you will need to pay & what processes will need to be followed if you do decide to cancel a lease
What Is Early Lease Termination & Why Might It Be Needed?
An early termination of a lease is when a customer decides to terminate their lease agreement on a brand new van, car or pickup truck before the contracted time period is up. What happens next really depends on the type of lease they've chosen. Here's a very brief look at what could happen:
- If you have a Contract Hire lease on your van, you will be charged cancellation fees for early termination, with most finance companies charging 100% of the remaining monthly rentals if you cancel in the first year & 50% if you cancel after that.
- If you opted for Finance Lease or Lease Purchase, you can request & pay a settlement figure earlier than your contract end date. However, we would not recommend settling too early into the contract as the amount required may be more than the vehicle is worth.
As you can see, the penalties for cancelling a lease can seem severe, but they're not really designed to be broken. If you do need to cancel a lease for whatever reason, make sure you are fully aware of the costs involved in doing so before committing to cancelling a lease.
If you are struggling financially & are considering cancelling your lease because of this, we advise calling your finance provider first. In some cases, they may be able to offer an extension to the length of your lease (which could make your monthly rentals less expensive over a longer time period) or some other arrangement.