Leased cars and VED at end of term?

[m1br]

I have to buy the RFL in year two - common practice I understand with MBUK Leases.

Now given the disc is always a bit 'short' due to overlap and delivery times etc, what happens at the end of term?

I'm in a two year lease, so its likely that my VED will expire just before the car is returned after 24m.

Do they refund you remaining VED?
Should I get 6m and just write it off if this happens?
Presumably they want the RFL at collection time (always been the case with my company cars)
Do I get it picked up a little early?

What do you guys do?

TIA
Steve

 

[Berkshire Rich]

Not sure what overlap you have but it should be a couple of weeks at most? Never had my leased / PCP cars picked up right at the very death so surely you will be ok? In fact, send it back at least one month early (early termination rights) and avoid the last monthly lease payment if you can.

 

[wemorgan]

Not sure what overlap you have but it should be a couple of weeks at most? Never had my leased / PCP cars picked up right at the very death so surely you will be ok? In fact, send it back at least one month early (early termination rights) and avoid the last monthly lease payment if you can.

You'd also avoid the final service with that method.

Reference the VED; I was going to just put 6 months on.

 

[bpsorrel]

My lease must be unusual then as all VEDs are included. Interesting point about the service though...

 

[moff]

My lease must be unusual then as all VEDs are included. Interesting point about the service though...

Depends on the car, it's not included on my C63 (surprise surprise) but is on my wife's new A220

 

[peterg1965]

The lease on my 640d is VED inclusive, when I was looking around it struck me that it was generally MBUK leases that did not include VED past the first year. Not an issue with a low emissions car, but when you get to £400+ annual VED it can come as a shock. I am sure you can elect to add VED for the lease term though.

Anyway, in the OP's case, I would be inclined to maybe terminate the lease a couple of months early, that way you can avoid paying the years tax and possible avoid having to have the car serviced just before you hand it back, as I had to do with my GL and likely to have to do in the 640d.

 

[DJM]

I've been looking at leasing companies and my finding's are that some offer VED for the full term and some don't. This is usually reflected in the TAP figure so make sure to add everything up and decide based on that...

 

[Rory]

Not sure what overlap you have but it should be a couple of weeks at most? Never had my leased / PCP cars picked up right at the very death so surely you will be ok? In fact, send it back at least one month early (early termination rights) and avoid the last monthly lease payment if you can.

Lease and PCP are very different products. You don't have early termination riights with a lease.

 

[wemorgan]

Most diesels have a 6 months VED of £60-120. So the bottom line is that it's all small fry when compared to the total lease costs.

 

[Berkshire Rich]

Lease and PCP are very different products. You don't have early termination riights with a lease.

Yes but its not that simple. All Regulated agreements have this right, under the Consumer Credit Act, provided you have paid 50% of the total costs (including interest, fees, any balloon etc). Regulated agreements can take on various forms and it will come down to the specific loan agreement wording. Sometimes people call Lease Purchase as "lease"

 

[Rory]

Sometimes people call Lease Purchase as "lease"

The OP can't be referring to lease purchase as he's returning the car.

 

[Teflonso]

Would this work? Five months from end of contract, cash in your existing tax disc and buy a replacement with six months duration.

You used to be able to do this, but maybe the rules have changed.

Option 2 - take off the tax disc at handover time and cash in any remaining full months.

 

[Sp!ke]

My VED is free so I never thought to ask to include it in the lease cost

 

[Berkshire Rich]

The OP can't be referring to lease purchase as he's returning the car.

As I said above, Regulated agreements can take on many forms and it depends on the specific agreement, not the generic description.

From the Financial Ombudsman website:

"The coverage of the ombudsman service was extended in April 2007 to include all regulated consumer credit activity. Case study: consumer disputes repair bill after returning car at the end of a three-year lease period. Mr D leased a sports car under a three-year regulated consumer hire agreement, which allowed him to drive the car for up to 8,000 miles each year. When the lease period came to an end, he returned the car to the leasing business."

From the OFT website section on the definition of Regulated Consumer Credit agreements;

"A consumer hire agreement is a regulated agreement if it is not an​

exempt agreement under section 16" [s16 involves land or utilities].

 

[wemorgan]

Reality check - we're discussing whether to save £3/month over a 24 month lease period.

 

[m1br]

Thanks Gents, its a straight lease.

If you get into cancelling agreements, even if 'legal', it can raise issues with credit checks.

Steve.