Life changes, often when we least expect it and we fully understand that. This can lead to a change in circumstances that requires you to cancel your lease agreement. It’s important to realise cancelling a car lease agreement is possible, but your rights with regards to cancelling differ. This can depend on the type of lease contract you have taken out, when you wish to cancel, and what finance company your lease agreement is with.
Let’s take a look at the different stages you can cancel your contract:
At the start of a contract: the 'cooling-off' period
Before you sign the terms and conditions of your lease agreement, you’re covered by consumer rights. This means, when dealing with contracts over the phone or via the internet (i.e. without any face-to-face dealings), you have the right to cancel the contract without penalty and without giving any reason within 14 calendar days whether you’re a personal customer, sole trader or partnership with up to four partners. Please note, agreements for Limited Companies, Limited Liability Partnerships (LLP) and Partnerships with more than four partners are unregulated so therefore these rights do not apply.
Here, at Nationwide Vehicle Contracts, that 14 calendar day cancellation period begins from the day you “accept” the quotation, Terms & Conditions and IDD document when discussing over the phone and from the day you submit your online order for internet transactions.
At the start of a contract: after the 'cooling-off' period
After 14 calendar days, if you wish to cancel prior to the car arriving, cancellation fees will apply with regards to Nationwide Vehicle Contracts brokerage services. If you cancel your order before you sign your Contract Hire or Personal Contract Hire agreement, a cancellation fee of £50 inc VAT will be charged by Nationwide Vehicle Contracts to cover all costs and expenses incurred in arranging the credit hire agreement up to that point. You won't have to actually pay the amount directly as it’ll be deducted from the £198 inc VAT processing fee (otherwise known as the brokerage fee) paid by you when you placed your order.
However, if you cancel your credit hire agreement after you’ve signed your Contract Hire or Personal Contract Hire agreement, Nationwide Vehicle Contracts will keep the full processing fee of £198 inc VAT again to cover all costs and expenses incurred in arranging the credit hire agreement. Cancellations need to be notified by email to: [email protected]
or by post to: Nationwide Vehicle Contracts Unit 9 Christie Way Christie Fields Manchester M21 7QY
On the cancellation notification, you need to supply full details of your full name, address, and the order you wish to cancel. Please note, by exercising your right to cancel, you’re withdrawing from the brokerage contract and the contract is terminated. Any processing refunds that’re due, in part or full as advised, will be issued within 14 working days from the day on which Nationwide Vehicle Contracts receives the notification of cancellation.
Cancellation after a contract has started
Once you sign a contract, it’s binding, and your cancellation rights are located within the terms and conditions on your contract. This is why it’s vitally important you fully read your contract before you sign it. Remember that lease contracts aren’t really designed to be cancelled. However, it’s possible, even if quite complicated to do so.
Firstly, you need to remember once you receive the car, your contract is with the finance company, and that’s who you’ll have to ultimately deal with. Secondly, it’ll depend on the type of leasing contract you have.
If you have a Contract Hire agreement
After advising the finance company you wish to cancel the agreement, you’ll firstly need to make sure the vehicle meets the fair wear and tear conditions. Then you’ll have to pay an early termination fee, this’ll have already been agreed and detailed in the terms and conditions of the leasing agreement that you signed. Once you have contacted the finance company and paid the fee, the finance company will collect the vehicle.
If you have a Personal Contract Purchase agreement:
Whether or not you’ll have to pay the termination charge will depend on how far into the contract you’re. If you have paid 50% of the total amount payable, you’ll be able to terminate the contract without charges, subject once again to the fair wear and tear conditions. But if not, you’ll be liable for not only a cancellation fee but all other charges relating to what is owed on the vehicle (the finance company will advise how much).
What other options are there?
The finance company could offer you the option to buy the vehicle from them and this might actually financially benefit you. Please note, as well as a price for buying the vehicle outright you’ll also be charged an early termination fee. You can then advertise the car for sale, and try to get a price that matches or exceeds the car and termination fee costs combined. Alternatively, if you were to get funder permission you could find someone to take over the lease contract for you. Once agreed, documents can be signed and the vehicle responsibilities turn to them. However, with a business lease, the contract can only be reassigned to another company.
