What to do if you can’t afford your car lease anymore

Car leasing offers a convenient way to drive a new vehicle with predictable monthly payments. But unexpected life events like redundancy, reduced income, illness, or rising living costs can make those payments harder to manage.

If you’re worried about affording your lease, it’s important to act early. Speaking to your leasing provider and understanding your options can help prevent the situation from becoming more serious.

Here are some key things to consider if you’re struggling with your car lease payments:

If you’re struggling to keep up with your lease payments, the most important step is to contact your leasing provider as soon as possible.

It might feel uncomfortable, but getting in touch early can help. Leasing providers understand that financial situations change and may be able to talk through options with you.

When you get in touch, explain what’s changed financially, such as redundancy, reduced hours, or unexpected costs, as this can help your provider understand your situation and discuss possible solutions.

Ignoring the issue can make it harder to resolve, especially if payments are missed and your provider cannot contact you.

In some cases, a leasing provider may be able to arrange a payment plan to help manage missed payments.

This could involve agreeing a plan to repay missed or deferred payments over time, helping bring your account back up to date.

These plans are arranged with your leasing provider, and may be added to future monthly payments, so it’s important to make sure the new amount is manageable. Missing agreed payments or falling behind could also affect your credit history.

Your provider will assess the options based on your individual circumstances.

If your financial situation has changed significantly and continuing the lease is no longer realistic, early termination may be an option.

Early termination allows you to return the vehicle before the contract ends, but it usually involves a fee based on the remaining payments.

While this option may still involve costs, it can sometimes reduce the financial pressure of continuing with the full contract term.

Before making any decisions, it’s always best to speak with your leasing provider to understand how early termination works and what charges may apply.

Missing a lease payment doesn’t automatically mean the vehicle will be repossessed, but it can lead to further action if the situation isn’t addressed.

Missed payments can lead to overdue payments or additional charges. Your provider will usually contact you to discuss the situation and agree on a payment arrangement if possible.

If payments continue to be missed and the provider can’t get in touch with you, they may have to take further action. In some cases, this could lead to the vehicle being repossessed.

Missed payments can also negatively affect your credit score, which may make it harder to obtain finance in the future.

If you’re experiencing financial difficulties, independent organisations can also provide support.

Services such as MoneyHelper, StepChange, and Citizens Advice offer free and confidential advice on budgeting, managing debt, and dealing with financial challenges.

A financial adviser can help you understand your options and explore ways to manage your finances.

Financial difficulties can happen unexpectedly, and changes such as redundancy, reduced income, or rising living costs can make it harder to keep up with regular payments. If you’re struggling to afford your car lease, speak to your leasing provider as early as possible, as they may be able to discuss solutions and explain the next steps.

If you’re thinking about leasing a car in the future and want to learn more about how agreements work, visit our How Leasing Works guides. You can also call our team on 0345 811 9595 for straightforward advice.