How can I get out of my Contract Hire Car Agreement?
Q.I have a personal contract hire car agreement which is approximately half-way through the 2 year agreement and my job has now moved to Belgium.
I have asked the finance company if I can take my car over to Belgium but they won't let me (other than for a holiday). Can I just hand the car back? What penalties am I required to pay? If I stop the payments and hand back the car what can they do?
Early Repayment FeesThere are a number of terms and conditions written into contract hire car agreements that state the requirements and obligations of both parties. When hiring a car using this type of financing option you are basically renting the car for a set period of time and then handing the car back at the end of the contract. With contract hire you do not own the car, although with the rapid depreciation on vehicles this can be seen by some as an advantage.
If you take a look through the terms and conditions of your contract you will no doubt see a clause regarding ending the contract early. Basically you made an agreement with the contract hire company to take on the vehicle for two years but now want to end it after 12 months.
Unfortunately, this is a legally binding agreement and penalties will no doubt be applied. Depending on the finance company they may ask for only the interest payments due on the remaining 12 months of the contract. The very worse case scenario is that you are held liable for the whole contract and the remaining payments for the whole year. The penalties and charges should be contained in your car hire contract agreement and these should be read and then fully discussed with the contract company.