Voluntary termination point in lease?

[Staypuffman]

Is there such a thing in the lease contract?
Also, the quote you get for early termination of the lease, does that include the car value?

Mine is coming in at £12k with just under 3 years left?

Thanks

 

[MrT3]

It does depend on the lease agreement but you normally have to pay at least 50% of all remaining payments. Any early termination price wouldn't include the cost to purchase the vehicle - they may not even allow that.

 

[OfficialMark_H]

When I leased vehicle’s the termination was 50% of the remaining payments if you cancelled within the first 2 years and then this amount reduced over the remaining years.
It’ll certainly be in your lease contract.

 

[WllXM]

Where did you sort out your financing? If it was direct from Tesla, they use Personal Contract Hire, which does not offer any kind of Voluntary Termination unlike PCP or Hire Purchase at the 50% repayment mark.

Therefore it would be normal to see an ad-hoc figure that they will compute themselves, and I do not believe you will have much choice nor negotiating power on this

 

[Big_D]

No, VT only applies to PCP or HP agreements where you have the option to own the vehicle. From www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/:

t’s expensive getting out of a lease early, and there is limited support available to help you. You are simply renting the vehicle, with no intention of eventually owning it. As a result, you are not covered by VT rights like you are with a PCP or HP.

I have this discussion with myself each time I change car. Lease is typically (much) cheaper than a PCP, but so much more expensive to exit early.

 

[Staypuffman]

So that £12k figure is correct then?

 

[WllXM]

So that £12k figure is correct then?

Anything they would give you is correct, they have sole discretion.
You say you have 3 years left, what was the initial term? 4y?
If so they are pricing the loss of revenue over the remaining term, outstanding amount which is still huge and inconvenience, so yeah, it would make sense. Especially if it's a Model 3 as they don't want any of those on their hands as the Highland refresh is incoming.. (look at the massive discounts on current new inventory models + the 0% APR financing).
You are clearly being penalised for wanting to terminate early. I assume 12k is nearly another 2 years of enjoying the car on your current lease so if I were in your shoes I would keep it... Makes no sense to pay this much simply to get rid of the car...

 

[Big_D]

So that £12k figure is correct then?

No idea, I don’t know what your monthly payments are. But I believe that if you want to “buy” yourself out of a lease deal, you need to pay all the remaining lease payments. And when you do, you’ll have nothing to show for it - you won’t own the car.

 

[btc1k]

Is there such a thing in the lease contract?
Also, the quote you get for early termination of the lease, does that include the car value?

Mine is coming in at £12k with just under 3 years left?

Thanks

What do you mean by "include the car value?"

 

[Alic01]

I thought the Tesla system worked a little different for voluntary termination. Normally it is 50% of all remaining payments but when the going is good it does appear that Tesla factor current vehicle value in to the calculation in a similar way to handing back a salary sacrifice lease if you leave the company.

This has led to people seeing massive swings in termination value based on the used value of their current model but there have also been times where people have seen reduced termination values coincide with when Tesla are looking to boost new sales. There are tales abound of people getting out of leases for free in the post covid recovery, we certainly walked away from our M3P with only a ver modest payment at 18 months old on a 4 year lease.

Sounds like right now they are just going for a straight 50% of remaining payments assuming a monthly payment around £600pcm

 

[WllXM]

I thought the Tesla system worked a little different for voluntary termination. Normally it is 50% of all remaining payments but when the going is good it does appear that Tesla factor current vehicle value in to the calculation in a similar way to handing back a salary sacrifice lease if you leave the company.

This has led to people seeing massive swings in termination value based on the used value of their current model but there have also been times where people have seen reduced termination values coincide with when Tesla are looking to boost new sales. There are tales abound of people getting out of leases for free in the post covid recovery, we certainly walked away from our M3P with only a ver modest payment at 18 months old on a 4 year lease.

Sounds like right now they are just going for a straight 50% of remaining payments assuming a monthly payment around £600pcm

As mentioned above VT is a statutory right that solely applies for PCP or HP contracts. It not 50% of remaining payments but 50% repaid on the initial amount borrowed (which can make a great difference in a PCP deal as you have a huge balloon payment at the end). If you have made that mark, you're free to walk out.

But regular leases through Tesla Finance are PCH, and Voluntary Termination is NOT a statutory right in this case. Therefore it is an individual discussion between the lessor and lessee where the lessor will dictate terms to allow you to exit the contract as they see fit.

Post-covid recovery and with the global chip shortages the pressure on the second hand market was huge and there was a scarcity of cars, so yes, you could get out fairly easily, but no one could see this coming. This is clearly the opposite today sadly for OP.

 

[Durzel]

In simple terms the lease company entered into a contract with you for X payments on a given car. You want to break the contract, and the "penalty" for that is that they want X number of the remaining lease payments which may equal the total number remaining, or less, at their discretion.

There's not really much you can do about the number they quote you, as @WllXM said.

 

[WllXM]

Not that I want to aggravate the situation OP is in, but this should serve as a reminder to everyone that any car lease is a Credit Agreement. You should not enter into one unless you fully understand what your liabilities are vs. the total amount borrowed which is the car cash purchase value. These terms were probably outlined in the multiple small print clauses that no one seems to be bothered to read anymore before signing.
Suddenly discovering on a forum that there is no way to painlessly exit a 4year PCH loan just 1 year in is probably a serious blow to OP, but also shows that there was probably a deficit in educating customers at some point.
I'm looking across the pond where car salesmen can get away with selling 96 months leases at 20% apr to people with sh*t credit scores because that's how they can afford the monthlies..

I can only hope that this will not have a too serious implication on OP finances, but in the current economical context I'm afraid that this might only the tip of the iceberg for many more...

 

[Temper Tantrum]

So that £12k figure is correct then?

Yes. That will be the total amount of the remaining payments on the agreement you signed up to. It's one of the reasons I would not got near a personal lease.

You don't have the same options to get out of it like you do with a PCP agreement.