What happens if I can no longer pay for my lease car?

Questioner

Dear Sir/Madam, I am curious about the following situation; I have a financial lease car where the car becomes my property after a number of years, but is currently legally owned by the leasing company. I wonder what will happen if the car is repossessed due to the inability to pay the monthly installments. A). Is the car being sold? B). Suppose the car is sold for €17,000, but there is still an outstanding amount of €10,000, what happens then! What do you still have to pay and what not? Can someone please explain what exactly happens here!

Lawyer

If it is a correct contract, this situation is stated as well as the consequences thereof in the general terms and conditions. If these are not there, the law applies and you will be put in default in a letter and termination of the contract (lease) may follow, or a fine will follow because you do not meet the repayment. The default makes you liable for the damage that arises as a result.

Questioner

The general terms and conditions of the lease contract do not state anything about the consequences of selling the car. So what would that mean? That the contract can be terminated against a fine of e.g. €7,000. Is that correct?

Lawyer

If you (debtor) are in default with payments of the lease car, and the ownership has not been transferred immediately, the lender will be able to make the credit immediately claimable after you are in default, plus claim damages, seize the car, and indeed sell it. Claim the damage suffered because you have not properly complied in money. The amount of the damage: the starting point is then the positive situation minus the negative due to default. Incidentally, one option is to have the car leased again instead of selling it. But then the same reasoning applies. If no fine or redemption sum has been agreed upon in the event of an interim exit, you will have to compensate the actual damage.

Questioner

The general terms and conditions of the lease contract do not state anything about the consequences of selling the car. So what would that mean? That the contract can be terminated against a fine of e.g. €7,000. Is that correct?

Questioner

But a settlement amount is a possibility and if the settlement amount is paid the process is definitively closed?

Lawyer

A settlement is always an option, even if a conflict ensues. In that case, there is a settlement agreement to settle the matter between the parties once and for all.