At the end of the agreement, you essentially have two options, return the vehicle and leave the scheme or order a new one. There is also the chance that you might have to leave the scheme early in which the following can still apply.
Returning the vehicle
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.
Leaving the scheme
Once you have returned the car, and finalised any potential fee payments you are no longer connected to the scheme. If you would still like a vehicle but not through a salary sacrifice scheme you could buy or lease a vehicle.
Ordering a new one
Most providers will contact you 9-12 months before the contract ends to see if you want to continue on the scheme or return your vehicle. If you want to order a new vehicle, you and your salary sacrifice provider will work through your options and select a vehicle that fits your wants & needs.
What if my circumstances change after my salary sacrifice car has been delivered?
If you decide to join the Scheme you will be committing to a 1 – 4 year salary sacrifice agreement depending on what contract length you decide to go for.
Therefore, should you opt out early you would not be eligible to re-join the Scheme prior to the termination date of the original agreement and you may be liable to an early termination charge.
Where an early termination charge would not apply, please note you may still be liable for any excess mileage or damage charges relating to your use of the car.
What is an early termination charge?
As mentioned previously, if you are wanting to leave the contract early an early termination charge is the amount payable if you leave the scheme before the agreed term ends. This is usually equal to 50% of the remaining rentals (including maintenance).
Unfortunately, due to regulations we can not go into the details around this, however if you wish to know more about early termination you can find articles online.
There are some commons questions asked around the end of a salary sacrifice car contract:
Can I buy the car at the end of the scheme?
In short, yes, because the vehicle is leased to an employer, the employee is eligible to buy the vehicle provided they agree to the funder’s price to purchase.
Can I extend the contract length of a salary sacrifice car scheme?
Yes, along with other changes that you might request, the vehicle can be extended. However, any change to the salary sacrifice amount must be in place for at least a 12 month period.
Can I Change My Vehicle During the Contract?
No, you are tied into your lease for 1-4 years as already agreed. Unless there is an issue with your vehicle you will keep it for the remainder of the contract length.
