Keep Lease Or Return Early - Change of Circumstances

[JB89]

Morning all,

I 'purchased' my first lease (PCH) car in October 2015 on a 10k per year mileage basis. At the time this was adequate, expected myself to go maybe 2/3000 miles over at most. 6 months into the lease I had an office relocation and with 5 months left on the lease the car is currently sitting on just over 25,000 miles. I expect if I keep the car until October I will probably hit around 31000 miles.

Excess mileage is charged at 4p per mile (assuming +VAT) leaving me with a likely final bill of approx £600. I got a quote for ending the lease early and was sent the following;

Vehicle not to exceed 26,000 miles.

Original monthly rental: £110.07

Revised monthly rental 20 months x £188.32: £3766.34

Less Rentals Invoiced to Date 27 months x £110.07: £2971.89

Actual Cost Termination Sum: £794.55 + VAT

In this situation would you suggest handing the car back now and paying the above, or keeping the car for another 5 months and taking the hit on the mileage at the end? I've also got a couple of minor alloy scuffs which will need a refurb before handing back so can probably add £150 on to the balance.

Many thanks

[anonymous-user]

Can you ask them for a mileage adjustment, so you keep the car for the next 5 months and just pay slightly higher monthlies over that time, to avoid the £600 lump at the end? I know VWFS are usually happy to do this.

Adjusting the mileage in the last six months and paying for it monthly is generally cheaper than paying the excess at the end of the lease, which in turn is generally cheaper than taking a high mileage deal from the outset.

[JB89]

Thanks for the suggestion - I'll put it to them and see what they come back with!

[MinuteMan]

If you have £550 left in remaining lease payments, plus £600 in excess mileage fees, I'd keep it. Returning it now will only save you £200 vs. having it for 5 months

When is the service due?

[JB89]

That's another negative (a pro for keeping I guess!) I just gave it it's second service last week.

[JB89]

I've had a quote today for extending the mileage to 30,000;

Total Amount Payable (inc VAT) £1,143.51
Repayable by £381.71 monthly rentals (inc vat)
Duration of Agreement: 3 months
Additional Mileage Charge: 4.88ppm

I believe on my current term I have 4 monthly payments of £132.08 outstanding, which would be £528.32 in payments and £488.00 for 10,000 excess miles (assuming VAT is added to this, making it £585.60 altogether) bringing it to a total of £1,113.92, i.e. £29 cheaper than paying for it monthly.

For the convenience of not shelling out a lump sum at the end I think I will take this option, unless there's any other viable alternatives?

Handing back early seems to only 'save' me £190.00 so I definitely may as well carry it on for a few months more!

[andy101093]

Is this with VWFS? When I asked them about early termination they said I would owe 55% of remaining rentals plus any excess mileage pro-rata - in other words even though my contract is for 16k miles total, because I was cancelling early, mileage would have to be under 16k relative to however many months were left or I'd be liable for excess.