One of the queries which customers raise, as leasing is a large commitment for them, is what happens if their circumstances change before delivery? What are their rights with a car lease cancellation?

There is quite a lot of confusion as to what customers are entitled to do and what rights they have with this being an online transaction. While there is no specific case law in our industry which has set an official process, many finance companies and leasing brokers operate similar standards which are worth noting. For an individual (or a regulated customer) engaging in an online transaction, you have two pieces of legislation which come into force for a contract hire agreement:

  1. Consumer Credit Act – this allows a cooling-off period of 5 days; and
  1. Consumer Contracts Regulations – this provides 15 actual days as a cooling-off period.

Put simply, for a customer engaging in an online transaction they are provided with legislation which protects them in a situation where they want to cancel. When a customer signs the order instructing the broker/finance company to a) order the car; and b) arrange the finance, they have 14 statutory days PLUS a further day (as the time frame begins the “day after”) in which to cancel the vehicle without any unjust costs or cancellation fees. If the broker/finance company can prove certain costs have been incurred, they may be able to argue that they are entitled to impose them. Before you receive a quote from any company, you should receive some documents from the company setting out their terms of business and this will include an information notice as per the below:

Administration Fee

We charge an administration fee of £150.00 + VAT (£180 inc Vat) for our credit broking services. This represents the costs incurred in ordering your vehicle with our nominated supplying dealer.

The administration fee is taken before the vehicle is delivered to you and can be paid by:


Credit or Debit Card;

Bank Transfer to …;

Deducting this from any holding deposit you make; or

In some instances, this will be added to your initial rental with the relevant lender (you will be notified of this)

If you cancel your order within your cooling-off period but after we have ordered the vehicle with the supplying dealer, a cancellation fee of £80 inc VAT will be retained to cover all costs and expenses incurred in ordering your vehicle up to that point. If you cancel your order after your cooling off period has expired, the cancellation charges below will apply.

Cancellation Charges

We may charge a cancellation fee as set out in the order form and the notice we send out to you should you wish to proceed with us.

In cases of cancellations we may charge an amount equivalent to 3 months rentals (including any VAT) for services already provided to you. The monthly rental is clearly set out in the order form you will be asked to sign.

Please respond to this 'Information Notice' confirming that you understand and acknowledge the above. Any delays in receiving confirmation may impact on your quotation.

Where a customer cancels within the cooling-off period, we charge £80 if the car has been ordered and the files created. This compensates us for the time expended in the transaction. However, what happens if I cancel a car lease outside of the cooling-off period? In these situations, you need to consult the terms of business/information notice as per the above. Some companies will apply a set figure such as £500 or £1000, some will charge a calculation based on the monthly rental and others will do it as a percentage of the P11d/list price of the vehicle. Our approach is to consider what is reasonable and fair; if a car has been a bespoke production for a customers and is likely to create problems for the dealership, we will impose certain costs on the customer to compensate all parties. However, if a car was pre-registered before the customer elected to go ahead with it and we know the vehicle can be sold easily, we are likely to take a less severe approach. If you are unhappy with any of this, raise a complaint with the broker, the BVRLA or the FOS.

To summarise, for a personal (or regulated) customer, you have a mandatory cooling-off period which allows you to cancel up to 15 days after signing your order WITHOUT COSTS (unless these are highlighted to you and are justifiable).

For more information on leasing check out our help and advice pages or be sure to read our blog for more up to date info about leasing and to read vehicle reviews. Please feel free to contact us to discuss any issues raised above.

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Carlease (UK) Ltd t/a CarLease UK, e-car lease, VanLease UK and School Minibus Leasing UK is a credit broker and not a lender and will introduce you to a limited number of finance providers which have been carefully selected by us - please note that we do not provide independent financial advice. The finance providers that we use may make payment to us if you elect to enter into an agreement with them. The amount we receive will affect what you pay for your vehicle. The commission received may or may not be capped in accordance with that finance company’s policy. We may also receive an extra amount based on how much business we provide to that finance company, the types of products you take from the finance company and the quality of our service. For Regulated Customers you can ask us about the payments we receive from the finance company so long as this is in good time before the agreement is made. Failure to maintain rentals may result in the vehicle being withdrawn (this may affect your credit).

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