How can I get out of a car lease early?

When you lease a car, you’ll choose a set duration for how long you drive the car (usually 2-5 years, although the average lease term is 3 years). If for any reason you need to end your lease contract before the agreed end date, it’s known as an early termination.

There are many reasons that you might need to end your car lease early. For example, if your personal circumstances have changed you may no longer need the car, or you may be struggling to keep up with your monthly payments.

Ending a car lease early often means you’ll have to pay a penalty to end the contract. The amount you’ll pay for an early termination will be specified in your lease contract document. This amount may be as much as (or exceed) 50% of your remaining monthly lease payments. This does vary, however, and some finance companies may specify a higher amount. Always check your lease agreement documents so that you know what you’ll be expected to pay in the event of an early termination.

Early termination of a lease will affect your credit score, especially if you’re not able to continue making your monthly payments until termination is confirmed. In cases where you’re struggling to make monthly rental payments, always contact your lease provider. They’ll be happy to discuss options that may help you end your lease in a way that best protects your credit rating.

If you can’t make your monthly payments or afford an early termination fee, there are a couple of options that you can use to end your agreement:

Lease Transfer

This is when you find another person willing to take legal responsibility for your lease, effectively transferring the car and agreement responsibilities to them. This is not a very common practice, however, and many lease providers do not allow for lease transfers.

Repossession or Voluntary Surrender

This should be a final option as it will have the most impact on your credit rating. If you cannot make your monthly payments or an early termination fee you may need to return a leased car to the finance company early. This is similar to repossession but incurs slightly fewer penalties.

The first step is to contact your lease provider and let them know your circumstances. They’ll then be able to speak to the finance provider to discuss the best options for you and negotiate the best termination fee they can for you. Once you have a quote, you can decide if you’d like to proceed with ending the lease.
The important thing is to always be open with your lease provider, as they may be able to help you stay in contract. They may be able to negotiate a change in the length of your contract to help reduce monthly costs, for example. If you do decide to end your contract, you can find out what happens at the end of a car lease in our helpful guide to ensure you have everything ready.

The time it takes for early termination to be processed by a finance company will vary from company to company, but expect them to make every effort to help you achieve the best outcome in the shortest amount of time possible.

If you’re new to car leasing, take a look at our easy-to-understand leasing guides that cover everything from how car leasing works to whether you should buy or lease a car. If you’re ready to find your next vehicle, browse our latest car leasing deals.