gareth

Just wondered if anyone can advise on options (if any exist) to kill off a contract hire agreement very early in its term? My wagon is on a three-year contract hire with IM Finance, it's only four months old, and for personal reasons I might need to let it go. Looking at the contract there doesn't seem to be any options on the hirer's side .

Thanks,
Gareth

Trouser @TSL

Sadly mate, mos CH agreement small prints entitle the finance company to 50% of all remaining rentals if you decide to hand back ... .... this is the worst case.

Best to speak to your dealer as if they are prepared to buy the car back from the finance co. they may only ask you to find the shortfall between the dealers trade figure and the stand in value at the finance house if you are lucky!!.. this is often less painful.

Either way it normally hurts

plan c is to take a cheaper car on some form of finance so that you qualify for a continuation discount as they may waive a proportion of the penalty.

Hope this helps

Trouser
(7 years at main dealer ).. did the odd CH

JoeyDeacon

I wanted out of my PCP after 22 months so sold the car to a dealer and let them sort out the outstanding finance.

I was lucky because the value of the car was similar to how much was still outstanding on the finance.

I obviously don't know how much you owe on the finance but your best bet would be to phone up the finance company and get the current outstanding balance on your account.

If you owe more than the car is worth you then have the option of selling it and making up the difference. If the car is worth a lot less than the outstanding finance you are probably better off keeping it until the difference between these figures is different.

I think the way the law works once you have paid off half the value of the finance you can just give the car back to the finance company although I am not sure if this affects your credit rating in any way.

Trouser @TSL

Hi joey .. sorry but that username always makes me laugh!!

what you say is bang on for a PCP which is essentially a hire purchase agreement with an outstanding amount at the end of the term.

CH is slightly different as the deposit is often much less and the finance house rely on the agreement running the term as the initial payemnts won't even keep up with depreciation in most cases.

JoeyDeacon

Doh!! Me being thick I didn't realise the difference!!

Guess the fact that I put a 5K deposit on my Impreza paid off when it came to get rid of it as it was actually worth what was still outstanding.

Incidentally just went on www.subaru.co.uk and they are doing some pretty good deals on contract hire. Over two years it was something like £800 deposit and £280 a month over 2 years. Worked out at 4.5%. Wish that had been around when I bought mine...

Oh well you live and learn.

gareth

Thanks for the suggestions. I feel better about approaching the dealer now I know it's not unheard of.

I had my last scoob on finance lease so that I always had a way of getting out early. This even allowed me to make a little profit when I traded it in. I knew contract hire was much more restrictive but didn't really think it through at the time...

Cheers,
Gareth

carl

Joey -- those rates are for businesses only. Even if you own a company and can get the car at that rate, you personally will have to pay the tax on the company car which makes it look less attractive (over £200 a month if you're a higher-rate taxpayer).

PING

Hi Gareth,

I had a CH on a wagon for three years. After 9 months or so I approached the finance house (IMF in my case) and they allowed me to reduce the length of the CH. I'm not sure what the minimum term is, possibly 18 months, but if you then had to quit the agreement, the amount outstanding would be a lot less - easier to negotiate with the dealer perhaps?

Good luck!

Steve

WillieF

Gareth

There are also a couple of companies out there that will transfer your contract to someone else.

I successfully got rid of a Renault Espace that we took on for a member of staff who then 'mibehaved' via a company called transfer contracts who are part of central contracts.
We paid them a documentation fee (£100 i think), one months rental and had the car valetted. They came and collected it and that was that.
www.transfercontracts.co.uk.

No connection etc etc just been there done that

gareth

Thanks WillieF - that is a VERY attractive option...

G