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Discussion Starter #1
I normally PCP but this time am using Tesla’s recently launched in house contract hire offering. I am trying, and failing, to understand the early termination clause. Here it is:

You shall pay:

‘As compensation and/or liquidated damages for your failure to comply with the terms of this Agreement, the total of the outstanding Rentals under the Agreement, less (a) the net proceeds of the sale of the Vehicle, that is after deducting the costs and expenses (including VAT) of tracing, repossession, insurance and sale and (b) a discount of 4% per annum on Rentals paid before the date on which they were originally due’.

I get the first bit about the total of the outstanding Rentals but it’s the next bit about less the net proceeds of sale and a 4% discount that I can’t fathom (my bold for emphasis).

Taking approx figures from my contract if I bail out after 3 years of the 4, I’m in for 12 months rentals totalling £10k. Assume car has depreciated by 50% so worth £45k. Assuming 4% discount on the 12 months I’m due to pay on termination reduces the £10k to £9.6k.

If I’m in for £9.6k less the sale proceeds of £45k the only conclusion I can reach is I walk away not having to pay the £9.4k. That sounds great but can’t be correct, what am I missing?

PCP is easy - settlement v market value. This is making my head hurt o_O
 

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I think the 4% per annum applies only to rental already paid in advance of when they are due. So if you paid a year in advance they would discount 4% but 3 months in advance will be 1%.
Beware - Tesla Leasing could sell the car to Tesla Sales for a fiver, leaving you to make up the deficit!!
 

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Discussion Starter #3
I think the 4% per annum applies only to rental already paid in advance of when they are due. So if you paid a year in advance they would discount 4% but 3 months in advance will be 1%.
Beware - Tesla Leasing could sell the car to Tesla Sales for a fiver, leaving you to make up the deficit!!
:D It doesn’t say fair value does it!
Assuming fair value though I can’t see where the proceeds of sale would ever be less than the rentals outstanding.

As for rentals in advance, yes there’s an upfront payment which equates to 2 years rentals so maybe the 4% kicks in if I return it during that period.
 

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Discussion Starter #5
You could ask them for a termination cost... question is do you trust them to do the sums correctly?
I have given them a "what if" scenario assuming 3 years down the line so we will see what (if) they come back.

Re the sums, the couldn't work out the right date for a VT so I know what they're like :rolleyes:
 
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Discussion Starter #7
Good luck with that one!! I fear you will need it.
Luckily, and somewhat to my surprise, I can move it along to a new home and won't need the VT/hand back option. I did ask Tesla for a p/x figure. Their offer confirmed they really really don't want to take cars in p/x. :rolleyes:
 
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