Cancellation Fee of Leasing
Calculation of the cancellation fee
Cancellation of all or a part of the items before the end of contract term is subject to the cancellation fees.
The cancellation fee is less than the total remaining lease fees.
Depending on the number of months the rental was paid, there are two ways to calculate the cancellation fees.
Case 1 Terminating the 12-months or longer contract ( this case is 24 months) lapsed less than 12 months from the start of the contract.
The cancellation fee will be the difference between the 12 months of monthly lease payments recalculated on a 12-month contract for the total value of the items and the total monthly lease fees already paid.
Cancellation fee = (Total Value of the Items x 6% x 12 (Months) ) - Total Lease Fees Paid.
Example
Cancelled at the 12th months from the start of the contract.
Total value of the items: JPY 100,000
24 months contract ( lease rate 4% of the value of the items)
Monthly lease fees: JPY100,000 x 4% = JPY 4,000 (monthly lease fee) x 12 months
Total paid lease fees : JPY 48,000.......... (A)
Recalculated to 12 month contract ( lease rate 6% of the total value of the items)
Recalculated monthly lease fees: JPY100,000 x 6% = JPY 6,000 (monthly lease fee) x 12 months
Total recalculated lease fees to be paid : JPY 72,000.......... (B)
Cancellation fee:(B) – (A) = JPY 24,000
Case 2 Terminating the 12-months or longer contract ( this case is 24 months) lapsed over 12 months from the start of the contract.
Cancellation fee is the difference between the lease fees re-calculated at the lapsed month and the total monthly lease fees already paid.
Cancellation Fee = (Total Value of the Items x Monthly Lease Rate at Lapsed Months x Number of Lapsed Months) - Total Lease Fees Paid
Example
Cancelled at the 18th months from the start of the contract.
Total value of the items: JPY 100,000
24 months contract ( lease rate 4% of the total value of the items)
Monthly lease fees: JPY100,000 x 4% = JPY 4,000 (monthly lease fee) x 18 months
Total paid lease fees : JPY 72,000.......... (A)
Recalculated to 18 months contract ( lease rate 5% of the total value of the items)
Recalculated monthly lease fees: JPY100,000 x 5% = JPY 5,000 (monthly lease fee) x 18 months
Total recalculated lease fees to be paid : JPY 90,000.......... (B)
Cancellation fee: (B) – (A) = JPY 18,000
Lease Rate
Contract Term |
Monthly Lease Rate |
Buy Back Rate (Rent to Own) |
12 months |
6% |
30% |
18 months |
5% |
15% |
24 months |
4% |
5% |
36 months |
3% |
3% |