Every now and again, a lease vehicle may need to be returned before the end of the lease period, and, typically, an early termination fee will be payable to the lessor if this happens.
What are Early Termination Fees
Early Termination Fees are typically up to 50% of the remaining lease payments due under a lease and are payable in full on return of a car. This value is connected to the rate of depreciation of the value of the car, as cars typically depreciate more quickly early on in a lease.
Importantly, Early Termination Fees are separate to other costs that may also be payable by an employee from their net salary at the end of a lease (e.g. for damage or excess mileage).
The below table summarises who is liable to pay early termination fees in different circumstances. Please refer to the specific employment contract amendment agreement entered into between the employee and the company (Employee Contract Amendment Agreement) – for the car being returned.
Alternatives to returning a car early
In some cases, it is possible to reduce or avoid Early Termination Fees, for example through transferring the car to another employee at the same company. Therefore, please always contact the customer operations team (customerops@electriccarscheme.com) as soon as you are aware an early return may be likely to occur. They will be able to advise you on your options, and support you on any next steps.
- Transferring the lease to another person within the company. Yes, it may be possible to transfer the lease to another person at the same company. This is provided the new employee is willing to sign up to The Electric Car Scheme. Let our customer operations team know if this is something you are considering, and they can help.
- Transferring the lease to a new employer (or a spouse’s employer). It is sometimes possible to transfer a vehicle from one business to another, provided the new business is signed up to The Electric Car Scheme and passes that lessor’s credit checks. It may therefore be possible for an employee to take a car with them to a new employer (or to transfer to their spouse’s employer) - just let our customer operations team know that you are interested in exploring this option and they can help.
- No, it’s not possible to transfer the lease to a personal lease and keep the car Unfortunately, none of the main lessors will transfer a car from a business lease to a personal lease - they will only consider a transfer from one company to another or from one employee to another.
If you have any questions at all regarding the early termination process please reach out to our customer operations team who can best advise: support@electriccarscheme.com