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What happens in the event of death of the contract holder?

When taking out a lease contract, its easy to understand why many customers are naturally concerned about what will happen if they happen to pass away before the end of their lease contract. To help answer this question, Nationwide Vehicle Contracts has put together a short guide to explain the process following the death of the contract holder.

The contract holder has passed away, who do I need to contact?

In the unfortunate event that the contract holder has passed away before the end of the lease agreement, Nationwide Vehicle Contracts will try and make things as easy as possible for the family of the deceased.

To help us assist you in the best way possible, it is important that you contact us as soon as possible so we can talk you through the process. At this point, we will provide you with the contact details for the relevant finance provider and where possible, assist you in obtaining an early termination agreement. So that we are able to do this, we will need:

  • The name of the contract holder
  • The registration of the vehicle
  • Your relationship to the deceased

Following this, the trustee of the estate will then need to contact the finance provider ASAP.

What will happen to the existing lease contract?

As with all financial contracts such as loans and contract hire agreements, there are terms set down in the initial leasing documents that will need to be discussed with the finance company. Generally speaking, the death of the lease holder is treated the same way as any other reason for early termination of the contract, and details of any early termination fees and financial 'penalties' will be fully detailed in the lease contract.

For agreements where the vehicle is returned at the end of the contract, such as a Personal Contract Hire (PCH), an early termination figure will be calculated and requested.

For agreements where the vehicle is typically purchased at the end of the contract, such as a Personal Lease Purchase (PLP) or Personal Contract Purchase, (PCP) an early termination figure will be calculated and requested, along with the balloon payment - the final payment at the end of a Lease Purchase or PCP contract which must be paid in order to take ownership of the vehicle as agreed in the contract. This will have been agreed at the start of the car finance agreement, with a figure based on trade guide future predictions calculated using model make, type, mileage and condition.

Obviously, depending on circumstances, the finance provider may choose to wavier the early termination fee in the event of the death of the contract holder but each decision will be on a case-by-case basis and trustees should speak to the finance provider as soon as possible to discuss.

A copy of the death certificate will also need to be supplied to the finance company.

What factors affect what monies are due?

When you contact the finance company they will take into consideration:

  • The amount of time left on the lease
  • The amount owed on the lease
  • The fees for early termination as detailed in the contract (although there may be alternatives to early termination with some companies so discuss this with them)
  • In the case of PCP or PLP contracts, as detailed above, the balloon payment

Obviously, at this most difficult of times, due consideration to the situation will be given by all concerned with the contract termination, but remember that the earlier that the situation is discussed, the sooner it can be resolved.

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