If you are terminating an employee for cause or for gross misconduct who has a car with us here at ECS, we will be able to support you through this process. When an employee has to leave their role partway through their lease term, there are a few options to explore regarding the electric vehicle. Something to bear in mind is that our protection does not cover gross misconduct or termination for cause and so liability for the Early Returns Fee will fall to the driver of the car.
What is an Early Returns Fee?
An Early Returns Fee/Early Termination Fee is a cost determined and taken by the lessor for the return of the car. This is typically made up of 50% of the remaining cost of the lease, but is subject to variation from the lessor and does not take into account any additional factors such as: excess mileage, damage above BVRLA’s fair wear and tear, and missing loose items. Any additional fees will be added on separately and is the driver’s responsibility to pay.
What are the options for the EV?
In this scenario, there are a few options that are available:
They can purchase the car outright from the leasing company
If they are keen to keep your car after they have left, they can purchase your EV outright from the lessor. The cost of this will be made up two aspects: the cost of the car + the Early Returns Fee.
They can return the car to the lessor
If they are not interested in keeping the car, they can return the car straight to the lessor. We will assist in booking in the collection.
What do I need to do if I have terminated an employee for cause?
The best way to ensure a smooth and simple process is to let us know about the termination as soon as possible with a rough end date in mind. Letting us know the current mileage, if there is any damage above BVRLA’s fair wear and tear and if they are a smoker will help us determine the Early Termination Fee with the lessor. We will then request a copy of the letter of termination and begin next steps on the paperwork.
We will act in confidence if you let us know about your decision to terminate an employee for to cause until things are finalised and we can then move on to the next steps.
Where should the employee keep the car in the meantime?
We don’t recommend driving the car after their last day of work, as they may no longer be insured and so before their last day of work they can either decide to leave the car on company premises (if possible) with the permission of the company to do so, or they can keep the car at their property in the meantime.
Can the employee transfer the car from a Business to Personal Lease?
Unfortunately, the lessors won’t be able to transfer cars from a Business to Personal Lease.
What happens after the car is returned?
Once the car has been collected, the lessor will issue the company an invoice to be taken by direct debit. From there, it will be a case of your company recouping the funds from the employee, either by holding back part of their final pay cheque or by agreement between yourself and the employee, as they are liable.
In some cases, an employee may end up not wanting to pay for the early returns fee. In these cases, it is important to let us know with enough notice so that you can hold back some of their final pay to put towards the fee. Following this, we will indemnify your company to recoup these funds for 90 days including use of a debt collector. If, after this time, you are still unsuccessful or partly unsuccessful, we will pay the company the full amount/remaining amount.
Summary: Who is liable for the Early Returns Fee?
In cases of termination for cause or gross misconduct, the employee will pay the cost of the early returns fee as well as any damage, excess mileage charges.