You choose your supplier of computer equipment; you agree a price and then acquire the kit via a leasing company under a lease agreement, typically over a term of between two and five years. But then, circumstances change, and you are suddenly left with a lease for IT equipment that you no longer need with months of outstanding payments to make.
In this scenario, you may wish to terminate your lease agreement and send the leased computer equipment back, but this is not always easy to do without settling the agreement.
All lease agreements contain clauses that say you can cancel the agreement, but you must still pay the outstanding lease rentals. This is only fair and reasonable – after all, if you bought a house and after a few months decided you wish to move again, you would not expect to be able to hand the keys back to the mortgage company without honouring the terms of your mortgage agreement.
Early settlement of a lease agreement
Ask for a settlement figure
The first thing to do is to speak to the leasing company and ask for a settlement figure. This is the amount of money that the company will accept to terminate the agreement. If you have signed a lease rental agreement, you will then have to hand the equipment back to the leasing company.
Negotiate the purchase of the leased equipment
Alternatively, you can try and negotiate purchase of the equipment from the leasing company. Leasing companies, banks, lessors, finance companies, underwriters – (they all are exactly the same) do not like bad debts. They may say you have to return the equipment as they are the legal owner of the equipment, but the chances are they will not want to take it back. Secondly, if they fear you may not be in business much longer then again, they may be more inclined to negotiate with you.
Transfer the equipment lease
Another idea is to pass the lease onto another company. Transferring a lease to a third party is possible subject to a small charge, assuming the credit profile of the third party is either equal or better than yours. But, you must tell the leasing company first as they have to agree to the transfer. Some companies get around this by sub-letting the equipment, but under the terms of many leases, this is not normally allowed.
What if the leased equipment is defective?
If the equipment does not work or there are serious quality issues with it, you should take this up with the computer supplier direct. If the equipment is defective, you could still obtain a settlement figure and ask the supplier to pay for it.
For more information about IT leasing, computer leasing and software leasing contact WestWon on Tel: 01494 611 456