What happens if I lose my job during my lease contract?

So you’re halfway through your lease contract and unfortunately, you lose your job.

What happens next?

It’s not an ideal situation to be in by any means. And we understand that your lease contract is probably the last thing on your mind in this situation.

But you do have to do something about it. So, what happens if you lose your job during your lease contract?

In this article we will talk you through your options, and the process you have to go through.

What should I do if I lose my job during my lease contract?

You’ve lost your job, and you’re just starting to think about your car. What do you do?

The first thing to do would be to call your vehicle broker. They will be able to advise you on what to do next. Then, you need to ring your finance house. They will present you with your options.

What options do I have if I lost my job during my lease contract?

Unfortunately, your options are pretty limited when it comes to this situation. Unless you are sure that you will be able to continue to make those monthly payments you need to think about getting out of your contract.

And there are ways you can do this.

How can I get out of my lease contract?

If you have a contract hire, you have to tell your finance house that you want to terminate your contract early.

They will ask you a few questions about the car, such as the mileage, to determine how much they want for the car. They will then give you this price as the settlement figure. This is what you have to pay to get out of your contract early.

If you want to buy your car, then you will have to ask for a purchase price as well. You have to ask for this, though. They will not offer this option unless you ask.

How is the purchase price determined?

Unfortunately we can’t say how much this will cost because it depends on a number of factors. These include things such as;

• How much your payments have been.
• How much you have paid so far.
• The residual value of the car.
• The mileage the car has done.
• The auction value of the car now.

So, there’s no way to accurately predict it. Sorry.

It should be noted that you will still be subject to mileage and condition charges if you come out of your contract early. So that is something else to consider.

Can I reduce my monthly rentals?

We understand that you don’t want to lose your job and lose your car in one hit. That’s rubbish.

So, is there a way you can reduce your monthly rentals?

Unfortunately, no. Your monthly payments are agreed at the beginning of the contract and they stay that price until it’s up unless you increase your mileage, but that’s a different article.

If you are still desperate to lease a car, then you will have to cancel your contract, and take out another one. You will have to ring your finance house and get the early termination figure and the purchase price. Then, go to a bank or a vehicle broker (who knows what they are doing) and they may be able to offer you a refinance option to buy the vehicle. This could be up to five years and the monthlies could be less.

Alternatively, you can go to a dealership or broker armed with how much you owe on the vehicle. They could then offer you the option to part exchange your vehicle. If you are in negative equity then they could build this into your next agreement.

However, you don’t have a job. Which means you have no source of income. Which, in turn, means you may not qualify for finance. The finance house needs to know that you can make those payments and you can’t do that if you have no source of income. So it might not be worth it.

Can someone else take over my lease contract?

There is a final option that you may want to consider. And that’s reassigning your lease contract. Not many vehicle brokers do this, however, so we cannot guarantee that this will be successful.

If you know someone who will take over your lease contract, then you need to contact your lease company. They will tell you whether this is possible. If it is, then whoever is taking over your contract will have to contact the lease company. They should have the relevant agreement number and will propose themselves to the company. Once that person has been approved then they will sign the necessary documents and it’s all sorted. But, as I said, it’s quite rare. So don’t rely on this as your Plan A.

Ultimately, if you find yourself out of a job during your lease contract then you are in quite a sticky situation. There is no real solution to this problem apart from the ones we’ve mentioned above. The chances are that your best bet is cancelling your contract.