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Early Termination: Ending Your Lease Contract Early

What is an Early Termination? 

You can end your car lease contract at any time by applying for an early termination. Early termination is when a customer wishes to terminate their lease contract early before the end of the contracted term. With an early termination, the customer arranges with the finance provider to return the vehicle early for a set fee which is calculated by the funder.

Since lease agreements are not designed to be broken, substantial penalties and fees are usually associated with early termination so it is advised that you think very carefully before cancelling the agreement and find out precisely what these total costs would be.

Why would an Early Termination be required?

There are many reasons why a customer may want to terminate their lease contract early. Perhaps personal circumstances have changed such as relocation or redundancy? Or maybe you're nearing the end of your contract term and wish to take advantage of a new lease deal to cut costs? Early termination allows you to break from your lease contract early.

As we mentioned before, early termination can be costly so it is advised that you consider all options before making a decision. If you’re struggling to pay the monthly leasing charge, you may want to speak to your finance provider first as they may offer to extend the length of the lease, which would lower your monthly payments, or come to some other arrangement to help you out.

Can anyone request an Early Termination quotation?

Early termination is at the discretion of the finance provider and is not available on all contracts. Please speak to Nationwide Vehicle Contracts in the first instance to discuss your options.

What is the criteria for an Early Termination?

  • Calculation for the early termination charge is based on what type of lease agreement you currently have and whether the agreement is regulated under the Consumer Credit Act.
  • For customers who aren’t entitled legally to an early termination, the funder may base their early termination calculation on any outstanding rentals plus current market conditions, also known as an actuarial calculation.
  • Personal Contract Hire agreements cannot be early terminated unless £1500 inc VAT of rentals have been paid.
  • For Finance Lease agreements, the sale details, vehicle mileage and payment for the amount equivalent to 2% of the gross sale price will be required in addition to the payment for the early termination charge.
  • The customer is only eligible for an early termination quotation where payments are up-to-date or payment arrears are no older than 41 days.
  • No quotations or early settlement figures will be valid whilst an account is held in default or the customer is insolvent.
  • The funder will be unable to terminate the vehicle unless cleared funds are received in full.
  • The customer will be held liable for all payments whether or not made by a third party as it is the customer’s responsibility under the terms and conditions of the contract.

How much does it cost?

As with any type of financial contract, there is a penalty charge for ending your lease contract early. This penalty - also known as an early termination fee - depends on a number of factors and varies from funder to funder. Some finance providers charge a fee of 50% of outstanding rentals and any arrears for Contract Hire and Personal Contract Hire agreements, while others calculate a fee on a case-by-case basis by taking into consideration the length of the contract and mileage allowance, as well as any outstanding rentals.


Some funders charge an early termination fee of 50% of outstanding rentals, while others calculate a fee on a case-by-case basis.

In all cases, an early termination charge will need to be paid by the customer or a third party. Payment is by BACS or CHAPS and the vehicle registration number must be quoted as the payment reference number.

Nationwide Vehicle Contracts do not charge an additional fee for obtaining an early termination quote on your behalf.

If you wish to obtain an Early Termination quotation

  1. Terminating your car lease contract early

    1 Contact Nationwide Vehicle Contracts

    Please contact the Nationwide Vehicle Contracts team on 0345 811 9595 (option 4) or email [email protected] Please note, we will only be able to discuss an early termination request with the person named on the finance documentation and you must have your registration number to hand. Email requests can take up to three working days to be actioned so if your request is urgent, please call us.

  2. Contacting the funder to request an early termination

    2 Contacting the funder

    We will then contact the funder to confirm the early termination settlement figure. Please note, it can take up to three working days for us to receive this from the funder.

  3. Email response from the finance provider

    3 Response from the funder

    Once we have received the paperwork from the funder, we will email you the settlement confirmation quote. Please note, early termination quotations expire within 14 days of the invoice date.

  4. Returning early termination documentation

    4 Proceeding with Early Termination

    If you wish to proceed with the early termination, please sign and return the settlement confirmation quote and make the payment to the funder before the quote validity date.

  5. Recalcuating the early termination fee

    5 If later payments are received

    Payments received after the quote validity date will still be processed however the early termination quotation will be recalculated and you will be liable for additional rental charges.

  6. Personalised car registration plate

    6 Clearing of the funds

    Once cleared funds are received in full, we will contact you to arrange collection of the vehicle. If your vehicle has a cherished plate, please arrange for its removal and re-registration or provide us with a letter of authority if the cherished plate is to remain on the vehicle.

  7. damaged lease vehicle

    7 Excess Mileage or Damage Repair

    Please note, any excess mileage charges or damage repair costs will be invoiced separately after termination based upon contract terms where applicable.

How long does the early termination process take?

The process involved in an early termination can vary case to case as it is often dependent on the funder. We advise that from beginning to end, the process can take between three to four weeks so please bear this in mind when contacting us. 

Still have a question about early termination of your car lease?

Do you have a question regarding early termination? Contact the Nationwide Vehicle Contracts team on 0345 811 9595 to speak to one of our experienced advisers.

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