End of contract or early termination

What are my options if I need to return my car early. Continue Reading

18th Aug 2023 |
End of contract or early termination

End of contract or early termination


How do I organise a new salary sacrifice car at the end of the contract term?
Vavoom will contact you 12 months prior to expiry of your current agreement to outline the process to return your car and renew your participation in the Scheme.

How do I arrange to return my car?
To arrange the collection of your car submit a request to Vavoom by calling 0344 264 4177. Please note collection may take up to 10 working days after your request, so please allow for this.

Please note, if you have ordered a replacement car through Vavoom then collection of your existing car should be on the delivery date of your new car and you will not need to request collection of your existing car, unless you plan to return it before the delivery of your new car.

If your new car is not available when your scheme car is due to be returned Vavoom will contact you to discuss your options, which may include granting an informal extension of your contract until a new car can be delivered.

What happens when I return my car?
Following its return to the lender your car will be inspected. This inspection will note any damage to the car in accordance with the lender's Fair Wear and Tear Guide, along with the completed mileage.

Unfair wear and tear
Where the car has been damaged beyond what is deemed to be fair wear and tear a charge may be levied to repair the damage.

Excess mileage
If the car’s mileage has exceeded the contractual mileage, an excess mileage charge may apply.

End of contract charges
When completing your application to join the Scheme you must agree that you are responsible for any applicable fair wear and tear or excess mileage charges following the return of the car. Once notified by Vavoom your employer may, at its discretion, pass on any or all charges due which will then be deducted from your net pay in the following month.

What is fair wear and tear?
The BVRLA Fair Wear & Tear Guide sets out a comprehensive definition of acceptable wear and tear, such as superficial stone chips or scratches.

For further information please see Vavoom's Fair Wear and Tear Guide. We advise assessing the condition of your car before arranging collection to ensure it complies with the guidelines.

What is an early termination charge?
An early termination charge is the amount payable should your participation in the Scheme cease before the end of the agreed term and your car is returned to the lender. Any early termination charge, equal to 50% of the remaining rentals (including maintenance), will be notified to your employer by Vavoom as soon as possible following receipt of the notification of early termination.

Subject to the exceptions noted below, per the terms and conditions of the Scheme where an early termination charge arises it will be recharged to you by your employer via a deduction from your net pay, or by invoice if you have left employment.

Will I have to pay an early termination charge?
If you have to leave the Scheme early, if your employer does not intend to retain or reallocate your car to another employee, and you have not agreed directly with the lender that you may retain the car, the early termination insurance arranged by your employer will cover early termination charges up to £25,000 should your agreement be terminated as a result of:-
• resignation;
• accidental death; or
• loss of your driving licence on medical grounds.

• Should you terminate your salary sacrifice agreement early for any other reason, or your termination costs exceed the £25,000 limit, you may be liable for any charges unless your employer exercises its discretion not to pass the costs on to you.

What conditions apply to the early termination insurance?
To qualify for early termination insurance, you must have participated in the Scheme for a minimum of 3 calendar months. The insurance will cover a termination charge amounting to no more than 50% of the outstanding rentals, including maintenance, up to a maximum of £25,000; you may be liable for any charges above this maximum.

Should an early termination charge be passed on to you by your employer it will be deducted from your net salary; subject to the amount recharged this may be recovered over several months. If you leave your employment, you remain liable for any early termination charge, in which case a payment method will be agreed between you and your employer.

Can I buy the car at the end of the contract or if I leave the Scheme early?
There is no option to purchase the car under the Scheme.

If you wish to retain your car when your salary sacrifice agreement ends you should contact the lender directly to discuss the options available to you.

What are my options if I leave the Scheme early and don’t want to retain the car?
If you do not retain the car it will be returned to the lender and an early termination charge levied unless, your employer, at its discretion, reallocates your car to another employee or retains it as a pool car.

Can I extend the length of the contract?
No. The length of the contract cannot be varied.

Do you have more information for me?
Absolutely. We have a full brochure on all ‘Frequently Asked Questions’ regarding Salary Sacrifice which is accessible here. Alternatively, you can call our Account Team on 0344 264 4177

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