Contract Hire Explained
Interesting Info 12 Aug 2015

Early Redemption

Should you wish to repay the finance early or purchase a different car in replacement of the finance facility, an early redemption arrangement will apply.

This is calculated on the capital outstanding at the time of settlement plus a fee of 3% of the capital outstanding.

The following examples provide an illustration of the early redemption arrangement:

Example 1:
Amount Financed: £75,000
Repayments: 48 monthly payments of £1,898.60
Assumed Funding Rate: 3 Month LIBOR of 0.55% + 9.35% = 9.9%

  • Redemption 9 months after the start of the agreement:
    Capital outstanding £62,871.23 plus 3% fee of £1,886.14 = £64,757.37
  • Redemption 21 months after the start of the agreement:
    Capital outstanding £45,783.79 plus 3% fee of £1,373.51 = £47,157.30
  • Redemption 33 months after the start of the agreement:
    Capital outstanding £26,682.68 plus 3% fee of £800.48 = £27,483.16
  • Redemption 45 months after the start of the agreement:
    Capital outstanding £5,602.35 plus 3% fee of £168.07 = £5,770.42

Example 2:
Amount Financed: £125,000
Repayments: 48 monthly payments of £2,240.20 followed by a final payment of £50,000
Assumed Funding Rate: 3 Month LIBOR of 0.55% + 8.35% = 8.9%

  • Redemption 9 months after the start of the agreement:
    Capital outstanding £112,800.98 plus 3% fee of £3,384.03 = £116,185.01
  • Redemption 21 months after the start of the agreement:
    Capital outstanding £95,280.82 plus 3% fee of £2,858.42 = £98,139.24
  • Redemption 33 months after the start of the agreement:
    Capital outstanding £76,109.78 plus 3% fee of £2,283.29 = £78,393.07
  • Redemption 45 months after the start of the agreement:
    Capital outstanding £55,161.18 plus 3% fee of £1,654.84 = £56,816.02

IMPORTANT: Please note this example is for illustration purposes only and the examples may change should there be a variation in 3 Month LIBOR or a difference in the timing of the redemption. The example does not take account of the Arrangement Fee or Option to Purchase Fee.

Once the agreement is activated, please contact us should you require an up to date redemption figure.