What to do if you can't afford your car lease anymore

If you are unable to afford your monthly car lease payments and have found yourself in financial difficulty, it's important to know what your options are and to take appropriate action as soon as possible.

In this guide:

I can’t afford my lease – what should I do?
Can I exit the agreement early?
What if I just stop paying?
Is there anything else I can do?
Choose your agreement with care

I can’t afford my lease – what should I do?

The first thing you should do is speak to your car finance provider. It is better to be honest with them rather than to stop making payments, as many will have options to help.

You may also wish to speak to an accountant for advice, or you can get free confidential information and guidance from a financial advice service like Citizens Advice or Money Helper. These experts will help you to find the best possible resolution.

Can I exit the agreement early?

Whilst there's usually help available, when you sign a lease agreement it's important to understand that you won't be able to just stop making payments and return the car.

When you're in a leasing agreement, returning the car doesn't necessarily mean you can walk away without penalty.
Depending on the agreement you have, you may be required to pay off the leasing costs in full if you return the vehicle before the end of your agreement.
Most leases include an early termination clause, but there can be significant charges for doing this. So, you'll need to think carefully before you go ahead and cancel your agreement.

What if I just stop paying?

Simply stopping your monthly payments may seem like a tempting option. However, this is not a good idea. It will have a negative impact on your credit rating and, crucially, it can mean you end up owing more money due to late rentals and added charges.

If your finance provider ends up repossessing your car, you will also incur extra charges for this. Even if your lender sells the car and puts the funds received against your debt, you will still owe the difference.

Is there anything else I can do?

To avoid the consequences of stopping your payments and exiting your agreement early, you could consider negotiating your car lease payments or transferring your car lease agreement.

This will depend on your personal circumstances and the details of the agreement you have in place with your finance provider. In certain instances, options like this may be available, but you should never assume that you will be able to take these steps. You can contact your finance provider to discover if there is any flexibility in these areas.

Choose your leasing agreement with care

Whether it’s losing your job, becoming ill, or something else beyond your control, life can be unpredictable and events like these can put unexpected pressure on your finances.

It is important to think carefully about your budget when you are choosing your leasing agreement. Rather than opting for a car that stretches your finances, you may benefit from going for a cheaper one that you can more comfortably afford.

It is also advisable to build up a safety net of savings that you can use in emergencies. According to Money Helper, a good rule of thumb is to have three to six months’ worth of essential outgoings in a savings account.

Need advice about your leasing contract or the best car lease deals to suit your budget? Get in touch with our friendly team today to discuss your options. Call us on 03447451818 or contact us online.

Trust, Compliance & Small Print

VAT Reg No. 715 25 1558 Company Reg. No. 3635778
Financial Services Register No. 677877 ICO Registration No. Z7112215

LeaseCar UK is a trading style of Central Contracts (S.O.T.) Limited
Central Contracts (S.O.T.) Limited is a credit broker not a lender
Central Contracts (S.O.T.) Limited is authorised and regulated by the Financial Conduct Authority
We are acting as a credit broker for the purposes of arranging your selected finance contract. We have a commercial relationship with a carefully selected panel of lenders and we may receive a commission from the selected lender. We do not charge you a fee for our credit broking services.

All primary prices shown on this page ex VAT at the prevailing rate unless otherwise stated.
An excess mileage charge may be applied if the contracted mileage is exceeded. Full details will be provided within the written quotation.
You will not own the vehicle and it should be returned clean in a condition that is commensurate with its age and mileage, otherwise charges may apply.

From April 2020 WLTP will replace the current NEDC test procedure for establishing the official Fuel Consumption and CO2 emissions of new cars.
Please be aware of the following:
For vehicles registered on or after 1st April 2020 vehicle road tax costs will be based on the WLTP CO2 values and may change the monthly rental cost.
Vehicles registered on or after 6 April 2020 Please be aware the addition of certain factory fitted options may impact the vehicles co2 emissions and affect your monthly rental.

The Financial Ombudsman (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk.

Central Contracts (S.O.T.) Limited is an appointed representative of ITC Compliance Limited which is authorised and regulated by the Financial Conduct Authority (their registration number is 313486) and which is permitted to advise on and arrange general insurance contracts as an intermediary.