contract hire and early (voluntary) termination

[jonah35]

I know you can do that voluntary termination thing on a balloon deal after 50% of the total outstanding amount has been paid back but can you do it with a contract hire (lease) deal?

if so how does it work

[E30M3SE]

Doesn't work in the same way, contact your lease/contract hire company.

[homerjay]

we had to pay up the full amount, when returning a 116i 14 months into a 3 year deal.

although, id like to add it wasnt me that approved it, as its a crazy thing to do.

[matc]

Usual terms are 95% of outstanding payments to hand-back early; might vary slightly per manufacturer but won't be far off.

[mattviatura]

matc said:

Usual terms are 95% of outstanding payments to hand-back early; might vary slightly per manufacturer but won't be far off.

This is miles off. Some leasing companies charge fifty per cent of the outstanding rentals. 95 per cent is VERY unusual but it depends entirely on the leasing company concerned.

[paulmon]

Unless you have early termination cover then expect to be charged for all the remaining rentals.

[mattviatura]

paulmon said:

Unless you have early termination cover then expect to be charged for all the remaining rentals.

Sorry, that is wrong.

Perhaps with YOUR lease, but generally that is incorrect.

[matc]

mattviatura said:

matc said:

Usual terms are 95% of outstanding payments to hand-back early; might vary slightly per manufacturer but won't be far off.

This is miles off. Some leasing companies charge fifty per cent of the outstanding rentals. 95 per cent is VERY unusual but it depends entirely on the leasing company concerned.

Well seeing as this is my line of work I'm glad you pointed out that I'm 'miles off'. I'll tell the finance companies to only expect half of their money in the future and just refer them to this thread should there be any confusion on their part!

All of the manufacturer backed leasing companies I have ever dealt with want 95% of outstanding rentals. Maybe the independants are happy with 50%, but I've never heard of it.

[mattviatura]

matc said:

Well seeing as this is my line of work I'm glad you pointed out that I'm 'miles off'. I'll tell the finance companies to only expect half of their money in the future and just refer them to this thread should there be any confusion on their part!

All of the manufacturer backed leasing companies I have ever dealt with want 95% of outstanding rentals. Maybe the independants are happy with 50%, but I've never heard of it.

I've only worked in contract hire and leasing since 1998 so I may not have as much experience as you, but in my experience 95 per cent is ridiculously high. I personally shy away from manufacturer-backed leasing companies because I'm not always happy with the way they treat my customers but for the main part, the major independent leasing companies (which form the largest fleets in the UK) don't charge anywhere near ninety-five percent. Even VWFS didn't the last time I early-termed one.

[Deva Link]

jonah35 said:

I know you can do that voluntary termination thing on a balloon deal after 50% of the total outstanding amount has been paid back but can you do it with a contract hire (lease) deal?

With a PCP, it doesn't occur to many people that they're borrowing the GFV for the life of the deal - so you generally don't reach the 50% paid point until very near the end of the agreement period anyway.

[jonah35]

thank all, interesting points

it's a mercedes and it's through mercedes

[skyline501]

You might also want to do a search on here for problems with returning contract hires to Mercedes.
They'll also try to take your trousers down for damages (real or imaginary).

[robsti]

This is why you should stay well clear from these type of deals when the so called experts can't agree on the simplest of questions!

[andy665]

robsti said:

This is why you should stay well clear from these type of deals when the so called experts can't agree on the simplest of questions!

Simple answer is - contact MBFS - every company can have different termination arrangements - its silly saying its always 50% or its always 95% - everyone could / can be different

[insideline]

mattviatura said:

matc said:

Well seeing as this is my line of work I'm glad you pointed out that I'm 'miles off'. I'll tell the finance companies to only expect half of their money in the future and just refer them to this thread should there be any confusion on their part!

All of the manufacturer backed leasing companies I have ever dealt with want 95% of outstanding rentals. Maybe the independants are happy with 50%, but I've never heard of it.

I've only worked in contract hire and leasing since 1998 so I may not have as much experience as you, but in my experience 95 per cent is ridiculously high. I personally shy away from manufacturer-backed leasing companies because I'm not always happy with the way they treat my customers but for the main part, the major independent leasing companies (which form the largest fleets in the UK) don't charge anywhere near ninety-five percent. Even VWFS didn't the last time I early-termed one.

I work for a manufacturer backed leasing company and we are 50% of outstanding rentals. The OP should contact MB Finance though, as their policy may well be different.

As a rule of thumb, I would always advise potential customers to think carefully if they want to get out of a CH deal early, as the costs can be prohibitive depending on the condition of the used car market at the time of disposal.

[matc]

jonah35 said:

thank all, interesting points

it's a mercedes and it's through mercedes

In that case it's 95% of outstanding rentals.

[matc]

mattviatura said:

matc said:

Well seeing as this is my line of work I'm glad you pointed out that I'm 'miles off'. I'll tell the finance companies to only expect half of their money in the future and just refer them to this thread should there be any confusion on their part!

All of the manufacturer backed leasing companies I have ever dealt with want 95% of outstanding rentals. Maybe the independants are happy with 50%, but I've never heard of it.

I've only worked in contract hire and leasing since 1998 so I may not have as much experience as you, but in my experience 95 per cent is ridiculously high. I personally shy away from manufacturer-backed leasing companies because I'm not always happy with the way they treat my customers but for the main part, the major independent leasing companies (which form the largest fleets in the UK) don't charge anywhere near ninety-five percent. Even VWFS didn't the last time I early-termed one.

Sorry I was obviously having a bad day, my response is at best, rude!

I agree 95% is a ridiculous figure, but of the manufacturers I've dealt with it always seems to be the figure they stick to. This could be a 'prestige brand' thing though as I guess they have more to lose in terms of depreciation than someone like VW?

I run a Merc dealership at the moment and if anyone comes in wanting to get out of the CH agreement early then we have no choice other than to turn them away. It's the same with PCP deals, if they're not at 50% so they can't VT and they want to hand back early then they ask for 95% of outstanding rentals even though they're getting the car back early!

[matc]

A lex said:

I had an Alfa (through Alfa) and had to pay 40% of outstanding rentals when terminating 13 months early.

So the poster declaring all manufacturer based ones are 95% is quite clearly wrong.

My advice would be to ring them up and ask!

Sorry, I'm quite clearly wrong because Alfa Romeos' policy is different to that of Mercedes (the company the OP wants to deal with!).

[mattviatura]

matc said:

Sorry I was obviously having a bad day, my response is at best, rude!

Accepted, forget it.

I used to resell MB Finance products via the direct arm, not everyone will know Mercedes-Benz had (may still have) a couple of different funders dependent on what type of finance the customer wanted or what type of business entity they were. I found them very difficult to deal with but it's probably completely different acting from a dealership.

Many other prestige manufacturers leasing companies are underwritten by the 'independents' which in most cases are owned by the major banks.

Robsti your point doesn't make much sense I'm afraid, I'm aware you aren't a fan of leasing products but there are no set rules regarding cancellation terms and obviously there will be discrepancies in the market. It's like buying a loaf in Sainsburys, the same thing may cost you more or less in Tesco.

[mattviatura]

A lex said:

I had an Alfa (through Alfa) and had to pay 40% of outstanding rentals when terminating 13 months early.

This is another important point. I'm not sure about Alfa (Fiat Auto Finance?) but some companies have sliding scales dependent on how far into the contract you wish to terminate.

As has been pointed out, best to ring the finance company concerned.