As a leasing broker it’s not a question we like to be asked, but we know that our customers should have all the information they need to make a properly informed decision on whether leasing is right for them, and for some that includes known if they can reject a car. So, we’ve put together this article that will tell you everything you need to know about rejecting a lease car, from why you might do it to how it will play out.

Cooling Off Period

The first thing you need to be aware of is that nearly all personal lease agreements have a cooling off period, also known as the cool period or cool. There is no cooling off period on a business lease so this will not apply to your lease if it is through your company, and you can move onto the next section of this article.

The cooling off period is the amount of time that you are legally entitled to change your mind without there being any ramifications including financial. If you choose to cancel the agreement after that time then may be a cancellation charge.

For your lease agreement the cool will start from the point that your signed finance documents are approved by the funder and it will last 14 days. If documents need to be redone then there will be another cooling off period. 

In most cases you will not be able to accept delivery of the car until the cool has passed, this is to reduce the complications of you deciding that the finance product (the lease) is not right for you but having used the physical product (the car). This is done for your protection as well as the funders.

Something to note when you lease with a broker is that there will typically be two cool periods, one for your agreement with the broker and a second for your lease agreement with the finance.

When Can You Reject a Lease Car?

Before we get into why you would reject a lease car you need to know when you can reject a lease car. For the terms of this piece when we refer to rejecting a lease car we mean rejecting the physical vehicle which would happen after the cool had expired and you are taking or have taken delivery of the vehicle.

There are only a few occasions where you will be able to reject a lease car once you are past the cool and they all revolve around the vehicle having a fault that is not able to be fixed to a satisfactory standard.  

Why Would You Reject a Lease Car?

There are two scenarios that a lease car being rejected tend to fall under.

The first is that the vehicle arrives and is not what was expected. For example, if the colour is not what you ordered, the spec isn’t right or if it is damaged on arrival. Though we work with a network of professional dealerships we know that there are occasions where these type of scenarios might happen and we ask that if your car arrives and is not what you expected then you give us a call before accepting delivery so that we can get the issue resolved as quickly as possible for you.

Fault with the Vehicle

The second scenario is when there is a fault with the vehicle and it’s not able to be fixed. It’s important to note that if it is a fault caused by driver error or negligence then this will need to be repaired at your cost and is not a valid reason for rejecting the vehicle. Similarly, an issue that would be considered wear and tear by the BVRLA wouldn’t be classed as a fault that you could reject the car for.  The fault would need to be a manufacturer fault to be a valid reason for rejecting the vehicle, this includes issues like a faulty gearbox, problems with the central locking system or something similar.

What Happens When You Reject a Lease Car?

Rejecting a lease car can be a lengthy process and not one you want to enter into lightly, which is why we always recommend trying to get the issues with the vehicle resolved before you go down this route.

There are a few different players in the lease process so we just want to take a minute to outline who they are as they may all play a role in rejecting a vehicle.

  • Funder – your finance company and the owner of the vehicle
  • Manufacturer – the vehicle manufacturer
  • Local dealership – an authorised garage or franchisee of the manufacturer where you can take the vehicle to be looked at / repaired
  • Supplying dealership – the dealer who supplied the vehicle
  • Leasing broker – a company like Xcite Car Leasing who arranged the lease for you

When you reject a lease car you will primarily be dealing with your funder as they are the ones you’ll return the vehicle to. However, before you can reject the car you need to give them the opportunity for the fault to be repaired and to do this you may need to speak to the manufacturer, a local dealership or even the supplying dealership.

If after they have attempted to repair the vehicle the fault is not resolved to a satisfactory standard then you can speak to the funder again about rejecting the lease. They may ask to attempt repairing the vehicle again which you can choose to accept and see if that resolves the issue, and there may be additional information or testing they require to continue the process.

Lease funders do not take the decision to end a lease early lightly and will work with you for the best outcome for all parties, including you as the driver. The exact process will vary on a case by case basis as our funders like to deal with these cases individually based on the specific circumstances and fault.

If they accept that there is a fault with your vehicle that is non-repairable then they will arrange for it to be collected from you. This will work similarly to a typical end of lease collection with them arranging for collection on a convenient date for you.

At collection the vehicle will be inspected, and you will be provided with a collection report once it has been reviewed by the funder. This will note any additional damage to the vehicle and if you have exceeded the pro-rata mileage and any charges there may be for these. It’s important to be aware that even though you are handing the car back due to a fault with the vehicle there may still be charges for the typical end of lease costs.

Once the vehicle has been collected and any end of lease costs paid then the funder will end the lease agreement, this includes confirming the end of the direct debit.

Early Termination

If you want to leave the lease for any other reason, then it will usually require an early termination and there will be a fee for that. The exact amount will vary depending on a few things including; the car you’re in, where you are in your contract, the vehicle mileage, and the current used car market so we can’t give any guidelines as to how much this will be.

Your funder will be able to provide a quote on request for you if you are looking to return it before the end of your contract. 

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