Things happen. Circumstances change. We get that. And sometimes, those circumstances lead us to wanting to cancel our lease contract.
Can you?
Firstly, cancellation rights vary. They depend on what sort of contract you have and which finance house you go through. And it’s not going to be the same for everybody. It also depends on when you want to cancel your lease contract.
While this doesn’t happen very often at OSV, it has done in the past. So we’re going to explain whether you can cancel your lease contract, and what your cancellation rights are.
Before we start, we should explain what cancellation rights we are talking about.
This is because before you sign the terms and conditions of your lease agreement, you are covered by consumer rights. These are the rights that protect all consumers. However, as soon as you sign that contract, you waive those rights. Your cancellation rights are now in line with whichever finance house you have gone through. So, in this article, we are talking about after you have signed your contract.
Where can I find my cancellation rights?
You can find your cancellation rights in your terms and conditions. This is why it’s really important that you read them carefully. They will include your early termination terms and conditions as well as the cause for these actions. These include things such as;
- Breaching your agreement
- Late payments
- The vehicle being lost or stolen whilst in your possession.
Like I said before, cancellation depends on the contract and which finance house you go through.
What are my cancellation rights if I cancel before my car arrives?
If you’re waiting for your car to be delivered and suddenly you start to have second thoughts, what happens?
Well the good news is, you can cancel your order. If you are a ‘regulated’ customer, you get a cooling off period. This is fourteen days where you can change your finance agreement. This does not cancel your car, however. If you decide that a personal contract hire isn’t for you, and you want to change to a personal contract purchase, you can do so.
How do I know if I am regulated?
You are a regulated customer if you are:
- A private individual
- A sole trader
- OR a partnership with less than 4 partners
This is according to the Financial Conduct Authority (FCA).It should be noted that if you are unregulated, you do not get the cooling off period. You are unregulated if you are:
- A limited business (Ltd)
- A partnership with 4 or more partners
This means that as soon as you sign, your order stands. If you choose to cancel after that, you will likely incur charges.
What are my cancellation rights if I cancel during my contract?
Now, what if you need to cancel your lease during the contract?
Firstly, lease contracts aren’t really designed to be cancelled. However, that’s not to say they can’t be. It’s just a bit more complicated than you may have hoped.
Also, it depends on what contract you have.
What are my cancellation rights with a contract hire agreement?
If you want to cancel your contract hire agreement, this is what happens.
You will have to speak to the finance house about early termination. With a contract hire, there will be an early termination fee. Your terms and conditions will outline the penalties and any cancellation fees. If you accept the fee, they will pick the vehicle up and you’ll pay it. Simple.
It should be noted that you will still be subject to condition charges. You have to hand your car back in a condition that complies with the BVRLA Fair Wear and Tear standard.
What are my cancellation rights with a personal contract purchase?
If you choose to cancel your personal contract purchase agreement, then what happens depends on how far along in your contract you are.
If you have paid 50% of the total amount payable then you can terminate the contract without charges. But, you must speak to the finance house because fair wear and tear will apply. I know from personal experience. I had paid over 50% of my personal contract purchase, but when I chose to end it two months early I was charged for some damage. So, check your BVRLA Fair Wear and Tear Guide.
Can I sell my lease car on instead of handing it back?
Now, this only applies to contract hire and operating lease, both for personal and business use.
If you want to sell your lease car on instead of simply handing it back, then you can. This is what you have to do:
- Ask the finance house for the early termination fee and the purchase price
- Add the two figures together – this will give you the price to technically buy the vehicle
- Advertise the car yourself – how you do this is entirely up to you
- This overall will cost you less than paying the early termination fee and simply handing the car back.
Can I reassign my lease contract?
So, you’ve decided that you don’t really fancy paying the early termination fee. Nor do you fancy selling it on. Is there another option?
You can, in fact, reassign your lease contract. But, not all lease companies will allow this. It’s quite rare but it can happen. Firstly, you need to find someone who will actually take over your lease contract for you. Then you need to get permission from the finance house. The person you are reassigning the lease contract to will then ring the lease company to propose themselves. That person will then have to be approved and will have to sign the relevant documents. And then, it’s done.
If you have a business lease, you can only reassign the contract to another business. If you have a private contract, you can only reassign it to a private individual. So, your cancellation rights differ from the consumer rights that you have before you sign the contract. When you sign that contract, your cancellation rights are determined by your contract and the finance house you go through. However, should you choose to cancel your contract, you do have options. You can either; pay the termination fee, sell it, or reassign your contract. Alternatively, if you’ve got a personal contract purchase and you’ve paid 50% of the total amount payable, then you can just hand it back.
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I have cancelled my order with the lease company one day after I signed online with them. However I have not signed a agreement with the finance company. Am I liable to pay cancellation fees to the lease company?
If you ordered it as an individual then you can rely on your “Distant Selling Rights” which means you have a 14 day cooling off period, so we would be surprised if you would need to pay any cancellation charges, I would mention Trading Standards if they are insistent in charging you.
Hi I have had a car on lease now since the 21st of march. It’s got a scratch on the back bumper which is visible to anyone, I spoke with the lease company of which they said they will sort I have this in writing saying that it will be sorted.
Still to this day I’m trying to get it resolved. Is there any way I could cancel this even though it’s being going of for this long but notified them from point of delivery?
Regards A
Hi Adam,
We are assuming you are a regulated customer (an individual, sole trader or a partnership business with 3 or less partners) we would recommend that you write to the supplier and say that you intend to use your ‘Right to Reject’ if they don’t resolve this issue within 14 days of your letter. However, we would also suggest you send a copy of this letter to the Finance House, asking them to get involved and put pressure on the supplier to get it resolved.
My dad bought a car on pcp 2 yrs ago and has been unable to drive for nearly a year because of confusion etc (being investigated for dementia) I asked the finance company if he could give the car back and their saying there is over £6k shortfall. Does he need to pay this ? Is there any way round this because of his health? Would be grateful for any advice thanks
Hi Andrena,
I sympathise with your situation. To our knowledge there would be no exit route due to your father’s health without paying the negative equity. However, there may be a contractual route you could take. If you look at the original agreement there should be a box called “Termination Rights” and this figure is 50% of the total payable of the finance agreement. If your father has paid this amount to date, including the deposit and any administration fees, then you could use this clause to hand the vehicle back to the Finance House with nothing further to pay, as long as the vehicle is in good condition and within the agreed mileage pro-rata. This should not affect his credit file as this is a legitimate clause within the agreement. Keep us updated as to what happens.
Hi, i have recently signed an online agreement for personal lease hire car. 16 days ago to be exact. Car was originally disscussed to be delivered within next 2 week, however agreement has now changed and car still has no build date.
So could be another 2 months away. I have paid them no money as yet. I have found another broker who can deliver within 14 days and have decided to use them and cancel the other agreement. However the original lease company have now sent me an cancillation invoice for 600 pound. Whats my rights? Thanks in advance.
Hi Bruce,
Thank you for your email. Unless specified on their order form, which you would have signed they cannot charge you. Factory build dates are out of the dealer’s hands, as dates do tend to fluctuate. However, we understand you need your car sooner. We would recommend that you take it to someone for independent legal advice (e.g. Citizen’s Advice).
We are not legal advisors so are unable to offer you any legal advice specific to your situation.
Hi I have taken out a lease about a month ago and signed contracts through a ltd company but now circumstances have changed and can’t go ahead delivery isn’t due for another 6 weeks but being told it’s 10% of purchase price to cancel is this right?
Hi Susie,
Thank you for your question. The only advice we can offer is that you read your finance agreement carefully. All the information you require will be outlined in this. If you are in doubt, we would recommend you contact an independent legal avisory service (such as the Citizen’s Advice Bureau) for information as pertains to your situation.
I took a lease out 2 months ago on a 2019 Nissan I took out 2 third party mainainence plans for tires and small dents this was added and specified in the lease agreement. I find now I can’t afford these additional policies, I cancelled both. I contacted the dealer and asked about my drop in payments and refunds. They say I still have to pay full lease and Packages even though they are cancelled but will get reimbursed at end of 3 year lease. What nonsense is this to pay for something I don’t have and don’t even get interest on my money. Any advice appreciated. In Michigan here
Hi Richard,
Thank you for your comment. Unfortunately, due to differences between US and UK when it comes to finance rules and regulations this is not something we can answer with any authority. We would recommend you contact an independent legal advisor for guidance.
We wish you luck and, would appreciate any updates as these would help any of our other US readers should they encounter a similar situation.
I have recently taken delivery of a new vehicle but the trim was not what I ordered so I was reluctant to sign for the car. Upon speaking to the dealer I was offered compensation for this as to change the trim to the spec I ordered would have taken quite some time. So I agreed to accept the compensation and keep the car. However, despite chasing twice now, I still have not received any compensation. I have had the vehicle for 11 days. Could I still cancel the contract? Thanks
Hi Paula,
We are unable to offer any legal advice. However, you agreed to accept the vehicle based on receiving compensation and it will depend on whether within that agreement both parties confirmed how long it would take to receive whatever compensation was agreed. If you bought it from a dealership we would suggest that you call them and ask to speak directly to the Dealer Principal who is the person in ultimate control of all departments of a dealership. You may need to be prepared to hold as they are incredibly busy people, but they can get things done.
Hello I just bought a 2019 car this weekend I have only 4 days with the car is there any advise. I dont want to keep the car not able to pay off I have medical issues
Hi Olgadelia,
Thank you for your comment. Unfortunately we are unable to offer you any advice that is relevant to the US market. We would recommend that you contact an independent legal advisor who will be able to help you. We wish you the best of luck with resolving the issue.
Hi we just bought a car on finance but we are yet to pick it up but I have changed my mind I no longer want it.. While we were at the dealers we were put in so much pressure to get it.. Please advise if by law I can refuse to take the car thanks
Hi Sam,
As far as the finance agreement is concerned, FCA rules are clear, you should have fair time to be able to consider if the financial agreement is right for you. If you have decided that it is not, then they should not try and force you to enter it as this would be non-compliant. Therefore, technically you would not be able to continue with the purchase of the vehicle as you wouldn’t have the funds to do so. The dealership would find it difficult to charge you for cancelling the vehicle on this basis as it is a basic requirement; the customer should not be forced into an agreement which they don’t feel comfortable with.
If you have any further questions, we recommend you seek independent legal advice from an agency such as the Citizen’s Advice Bureau.
Hi I have a question regarding a recent delivery of a ford van. I ordered a vehicle and I took delivery and signed on a finance lease agreement only to discover after 2 weeks that an item was missed if the spec list I ordered. I have the finance agreement confirming the spec but the invoice does not have it. Can I still reject the car, it has been over 2 months now due to covid everything is closed. Please can you advise? Thanks
Hi Abul,
Thank you for your question. We would recommend you speak with the dealer you got the vehicle from, they must be given a chance to rectify the issue that you have noticed.
I want to ask, I recently entered a lease contract but due to Covid 19, the car delivery was postponed. After their service is back, I booked delivery on 20 June but then car was not showing up and I got message from Broker said that there is warning light on car Dashboard and it has to be returned to dealer to fix it. Today, they told me they need to order the part to fix the car, which makes me feel uncomfortable for that car. Can I require then give me a different one or just reject the car and get out of contract?
Hi Quang,
Thank you for your question. We are not a legal advisory service.
As you can see, according to the CRA 2015 (Consumer Rights Act), you have:
1. Short term right to reject – The consumer can reject the vehicle and receive a full refund if a fault exists, or any of the expectations have not been met within 30-days from the later of:
– The transfer of ownership (or possession, if hired or under a purchase or lease agreement) as stated in the agreement
– Delivery of the vehicle
– Notification of installation
2. Repair or replacement – If there is a fault within the first 6-months the consumer can demand that the trader repairs or replaces the vehicle. The trader has “one shot” at repairing the vehicle, this must be actioned “at no cost to the consumer, within a reasonable time and without causing the consumer significant inconvenience”.
3. Rejection or price reduction – If the repair is not successful or another fault appears the consumer can reject the vehicle and receive a refund. The trader is allowed to make a deduction for use of the vehicle, the calculation of which must be consistent for all customers. Alternatively, the consumer can keep the vehicle but the trader must apply an “appropriate” price reduction agreed to by the consumer.
However, we would recommend you contact the Broker and request (in writing) an outline of the fault that has been found in the first instance.
Hi,
We received a delivery of our A7 on 17 March 2021, after 1.5 months the vehical starts shows faults with its security features and problem with the front suspension as dealer forgot to take out the suspension blockers during PDI checks. Now we are reluctant to drive the car as it may have caused some structural damages.
Can we cancel our contract with the finance House as the vehical not fit for purpose?
Hi Abishek,
Thank you for your question. We are not a legal advisory service.
As you can see, according to the CRA 2015 (Consumer Rights Act), you have:
1. Short term right to reject – The consumer can reject the vehicle and receive a full refund if a fault exists, or any of the expectations have not been met within 30-days from the later of:
– The transfer of ownership (or possession, if hired or under a purchase or lease agreement) as stated in the agreement
– Delivery of the vehicle
– Notification of installation
2. Repair or replacement – If there is a fault within the first 6-months the consumer can demand that the trader repairs or replaces the vehicle. The trader has “one shot” at repairing the vehicle, this must be actioned “at no cost to the consumer, within a reasonable time and without causing the consumer significant inconvenience”.
3. Rejection or price reduction – If the repair is not successful or another fault appears the consumer can reject the vehicle and receive a refund. The trader is allowed to make a deduction for use of the vehicle, the calculation of which must be consistent for all customers. Alternatively, the consumer can keep the vehicle but the trader must apply an “appropriate” price reduction agreed to by the consumer.
However, we would recommend you contact the Broker and request (in writing) an outline of the fault that has been found in the first instance.
Suzuki Vitara. We picked up 29/03/2019. Catastrophic failure last week, blew the head gasket, spat all it’s water/coolant out. Engine totally cooked. Head possibly warped, pistons who knows, bolts knackered.
Serviced as per MFR’s guide. Only 14,000 miles on the clock.
Issue arises (possibly) that it was a pre-registered car (Dec 2018). According to Suzuki T&C’s (3 years warranty) it now falls outside that.
To be fair, our lease financer (so far) have been pretty understanding – lets hope they still are when they get the bill as, in our opinion, the standard of this car is not acceptable under The Consumer Rights Act 2015. Did I mention it went back 7 times for a brake issue too ?
Never, ever, ever would I have a Suzuki again. Ever.
Hi, I have a leased car since january 2022 and about a month ago had a fault on the dash, I have called the leasing company and told about the fault and they advised me to go the dealership to get the car checked, so I did it obviously. They have done something to try to fix the issue in one full day. I took the car back and after a week the same fault appears again. I emailed, called the leasing company telling them that i wouldl like to reject the car, not even 6months old and already has issues, tried to fix it ones but not successful, Is it in my rights to reject a car after the same fault appears and not been fixed within the 6months period? I don’t trust this car in terms of reliability and is not fit to purpose, i have opened a case about the issue and emailed the leasing company and they will give me a response. Have I done things right? I have told them about the issues from the beginning and gave the dealership the chance to fix the issue
Hi there Yu, Thank you for your question. We are not a legal advisory service.
As you can see, according to the CRA 2015 (Consumer Rights Act), you have:
1. Short term right to reject – The consumer can reject the vehicle and receive a full refund if a fault exists, or any of the expectations have not been met within 30-days from the later of:
– The transfer of ownership (or possession, if hired or under a purchase or lease agreement) as stated in the agreement
– Delivery of the vehicle
– Notification of installation
2. Repair or replacement – If there is a fault within the first 6-months the consumer can demand that the trader repairs or replaces the vehicle. The trader has “one shot” at repairing the vehicle, this must be actioned “at no cost to the consumer, within a reasonable time and without causing the consumer significant inconvenience”.
3. Rejection or price reduction – If the repair is not successful or another fault appears the consumer can reject the vehicle and receive a refund. The trader is allowed to make a deduction for use of the vehicle, the calculation of which must be consistent for all customers. Alternatively, the consumer can keep the vehicle but the trader must apply an “appropriate” price reduction agreed to by the consumer.
However, we would recommend you contact the Broker for further information on what to do next.
We dropped the car off at Kia in Crewe lease went home in are new car now we get a letter 5 days later saying there’s £693 worth of damage no way should the staff have looked at the before we left Kia thanks
Hi there Kenneth, thank you for your query. There should have been an appraisal of the car when you returned the vehicle – if this was not done it’s going to be difficult for either side to evidence who had done the damage. We would recommend reaching out to Kia immediately to explain the situation and ask for a resolution. If you have any photographs of the car when handing the vehicle back, this will support your case.
Hi I have just signed a personal lease agreement yesterday and paid the admin fee to allow the deal to go ahead. I have contacted by the lease company today to be informed that there is a delivery charge for the vehicle to my home because of the distance from the dealership to where I live. At no time during the process of agreeing and signing the lease agreement was a delivery charge discussed. There is no mention in either the invoice or the agreement. Do I have to pay this charge? or should it be the responsibility of the lease company
Hi there Trevor, thank you for your query. The delivery charge should have been discussed and included in the agreement prior to signing. If it was not discussed and is not included in the agreement, then you are not obligated to pay the charge. It should be the responsibility of the lease company to cover the delivery charge. You should speak to the lease company and explain that you were not aware of any delivery charge prior to signing the agreement and that you were not informed of the charge in the agreement or invoice. If they refuse to cover delivery charges, ask for a refund and we will be happy to help you with your replacement vehicle without hidden charges. Get in touch on 01903 538835.
Hello, Some support required, I have a car on lease which has now finished its term but before the car was picked up by the lease company the car started to miss fire. spoke with lease company and they advised taking it to local dealer which we did, they plugged the car in said it required a new battery and sensor £800 fee, the car is just 4 years old and has done 23k miles.
spoken with leasing company told us its our responsibility to pay so agreed to pay, on completion of the new battery and sensors car has been miss firing again which they re-plugged the car in and said CVVL 2 Valves jammed £2000 to fix and then re test. for me this is a fault with the car the evoqes are known to have a timing belt fault yet JA land rover don’t admit this fault.
thinking of just phoning lease company up and saying my term is done you need to fix it and ill also refuse to pay the bill. anyone experienced anything like this before? also what’s the worse the finance company can do?
Hi there MJLithgo. It sounds like you’re facing a challenging situation with your leased car. When it comes to cancellation rights in leasing agreements, it’s essential to review the terms and conditions outlined in your contract. Here are some steps you can take:
Review your lease agreement: Check the terms and conditions regarding vehicle maintenance and repairs, as well as any clauses related to terminating the lease early.
Contact the leasing company: Explain the situation to the leasing company in detail, including the issues with the car and the repairs that have been attempted. Ask them for their assistance in resolving the matter, especially if the problems occurred before the end of the lease.
Seek legal advice: If you believe the issues with the car constitute a breach of contract or warranty, consider consulting with a legal advisor who specialises in automotive law. They can provide guidance on your rights and options for recourse.
Document everything: Keep records of all communications with the leasing company, repair invoices, and any other relevant documentation. This will be valuable if you need to escalate the issue further.
It’s essential to approach the situation calmly and professionally when communicating with the leasing company. They may be willing to work with you to find a satisfactory resolution.
Best of luck, and I hope you’re able to resolve the issue satisfactorily.
Hello,
My new leased car was supposed to arrive on 24/4. n the day I got a call and was told there is a faulty door module and that the part is expected to arrive by today, Friday 2/5. today I was told there is a faulty module that needs replacement and that this part is on back order. There is no expected date of delivery as a result. What are my rights?
Hi there Eitan, thank you for your query. In situations like this, your rights may vary depending on the terms of your leasing agreement. Generally, if the leased car is not delivered as agreed, you may have the right to cancel the lease contract and potentially receive a refund of any payments you’ve made.
I recommend reviewing your lease agreement for any specific provisions regarding delivery delays and cancellations. Additionally, you may want to contact the leasing company or dealership to discuss your options and inquire about the possibility of cancelling the lease due to the prolonged delay.
If you’re looking to find a replacement vehicle or a car in stock, get in touch with our team of Vehicle Experts on 01903 255000.