Can You End a Car Lease Early? Early Termination Explained

You can end a car lease early, but only if your finance provider allows it. This is known as early termination and usually involves returning the vehicle before the agreed end date and paying an early termination charge. 

The amount you pay depends on your finance provider and the terms of your agreement. Some finance providers charge around 50% of your outstanding rentals, while others calculate the cost on a case-by-case basis. 

Early termination can be expensive, so we recommend taking your time to consider all alternatives before making a decision. 

In this guide, we explain what early termination is, the potential costs, and the steps to take if you’re thinking about ending your lease early.

Early termination is at the discretion of the finance provider, so as long as they approve, you can end a car lease early. If your finance provider does not approve, you will not be able to terminate your lease early. 

If you’ve already taken delivery and your lease is underway, you’ll usually need to request an early termination. This means returning the vehicle before the agreed end date and normally involves an early termination charge calculated by your finance provider.

Ending a lease early can be expensive, so it's important to understand the costs involved before deciding whether it's the right option for you.

Put simply, early termination is the process of ending your lease agreement and returning the vehicle before the agreed end date.

It requires approval from your finance provider, and an early termination charge usually applies.

There are many reasons why a customer may request an early termination of a car lease, including: 

• Personal circumstances have changed, such as relocation, redundancy, or a change in household income.
• You no longer need the vehicle. 
• Your driving needs have changed, and the vehicle is no longer suitable. 
• You need to reduce your monthly outgoings and want to explore whether ending the agreement is an option.

You can ask for an early termination quotation, but whether early termination is available depends on your finance provider and the terms of your agreement.

The following criteria and conditions may apply when requesting early termination:

• Your type of lease agreement – The early termination charge will depend on the type of agreement you have and whether it's regulated under the Consumer Credit Act.
• How the termination charge is calculated – If you do not have a legal right to early termination, your finance provider may calculate the charge using outstanding rentals and current market conditions. This is sometimes referred to as an actuarial calculation.
• Personal Contract Hire agreements – Personal Contract Hire agreements usually cannot be terminated early unless at least £1,500 in rentals, including VAT, have been paid.
• Finance Lease agreements – For Finance Lease agreements, your finance provider will consider details of the sale, its mileage, and payment equal to 2% of the gross sale price, in addition to the early termination charge.
• Your payment history – You will usually only be eligible for an early termination quotation if your payments are up to date, or any arrears are no more than 41 days old.
• Default or insolvency – An early termination quotation or settlement figure will not be valid while your account is in default or if you are insolvent.
• Payment of the termination charge – The finance provider will not terminate the agreement until the required funds have been received and cleared in full.
• Third-party payments – Even if somebody else makes a payment on your behalf, you remain responsible for all payments due under the terms of your agreement.

Your early termination fee depends on a number of factors and varies from funder to funder. 

Some finance providers charge a fee of 50% of your outstanding rentals and any arrears for contract hire and personal contract hire agreements, while others calculate a fee on a case-by-case basis, taking into account contract length, mileage allowance, and outstanding rentals. 

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

If you're considering early termination, you'll usually need to contact your finance provider directly.

Your finance provider will confirm whether early termination is available on your agreement, calculate your early termination quote, and explain what you need to do if you decide to proceed.

You can find the contact details for our main finance providers below.

• BMW Finance - 0370 505 0150 
• Renault Finance - 0344 335 0000 
• Peugeot Finance - 0845 200 1234
• Lexus Finance - 0870 850 7788
• Jaguar Finance - 0344 879 6717 
• Volvo Car Financial Services (Santander)- 0800 369 8634 
• Arval UK Ltd - 0370 600 4499 
• Citroen Finance - 0345 313 3806
• Lex Autolease Ltd -  0344 879 6000 
• Honda Finance - 0345 266 5302 
• Toyota Finance - 0370 850 5533 
• Mazda Financial Services - 0370 732 4060 
• Leaseplan UK Ltd - 0344 493 5812
• Mercedes-Benz Finance - 0370 847 0700 
• Land Rover Finance - 0344 879 6719 
• ALD Automotive Ltd  - 08000 323 277 (Opt 8) 
• Novuna Vehicle Solutions - 0344 879 6000 
• Isuzu Contract Hire - 01285 647670
• Santander Consumer Contract Hire - 0330 134 8751
• Mini Financial Services - 0370 5050 123 
• Leasys UK - 0344 561 4611 
• Free2Move Lease - 0345 313 3803
• Hyundai Finance (Santander) - 0330 134 8753 
• Volkswagen Financial Services - 0370 010 2022
• Alphabet Limited - 0370 505 0100 
• MG Finance (Santander) - 0330 134 8753
• Drivalia Lease UK Ltd - 0330 123 5246 
• ORA Finance (Lex Autolease) - 0344 879 6000 
• Stellantis Financial Services UK Ltd - 0345 345 5449
• Mobilize Lease & Co UK Limited - 0333 009 0233 
• BYD Lease (Arval) - 0370 600 4499
• Hyundai Contract Hire (Arval) - 0370 600 4499
• Omoda Jaecoo Lease (Arval)- 0370 600 4499
• Chery Lease (Arval)- 0370 600 4499
• MG Lease (Arval)- 0370 600 4499
• Chagan Lease (Arval)- 0370 600 4499

The process of ending a car lease early can vary from case to case, as it often depends on the funder. We advise that the process can take between three and four weeks from beginning to end, so please bear this in mind.

Because early termination brings your lease to an end sooner than originally planned, the usual end-of-contract checks still apply. 

This means the vehicle will be assessed for fair wear and tear, and your mileage will be checked against the allowance in your agreement. Any applicable charges are normally separate from the early termination fee itself.

When your vehicle is returned, it will be inspected for damage in line with fair wear and tear guidelines.

These guidelines are designed to distinguish between reasonable signs of everyday use and damage that goes beyond what would normally be expected.

Light scratches, small stone chips and minor interior marks may be considered acceptable, depending on their size and severity. Damage such as dents, deep scratches, cracked or broken items, and badly damaged alloy wheels may result in additional charges.

Your lease agreement includes a pre-agreed mileage allowance. If you have exceeded this allowance when the vehicle is returned, your finance provider may charge an excess mileage fee.

The amount charged depends on your agreement and how far you have exceeded the agreed mileage. The further over the allowance you are, the higher the total charge is likely to be.

Early termination is not always the only option. Depending on your agreement and finance provider, you may be able to transfer the lease, purchase the vehicle, or discuss another arrangement.

You may be able to transfer your car lease to someone else, but this is at the discretion of the finance provider. 

Some finance providers will allow you to transfer your lease, provided that you meet specific criteria, which typically are: 

• Be a private customer on a regulated finance agreement, such as PCH
• Have more than 12 months remaining on the car lease contract
• Be up to date with your rental payments
• Have the details of the new lessee who will be taking over the contract 

Please note that Nationwide Vehicle Contracts cannot assist with transfer requests. The finance provider handles this itself.

In some cases, you may be able to buy your lease outright and take over ownership of the vehicle, but it depends on the type of agreement you’re on and whether your finance provider agrees. 

If you’re a Nationwide Vehicle Contracts customer, get in contact with us first and we’ll point you in the right direction.

No, it’s not possible to pay off your remaining car lease early. 

The agreement is legally binding, and you agreed to set monthly rentals for the contract term.

Terminating your lease contract early is a big decision and should not be taken lightly. If you meet the early termination criteria, you’ll usually need to pay an early termination charge. Some finance providers calculate this as 50% of your outstanding rentals, while others calculate the amount based on your individual agreement.

If you accept your early termination quote, the usual end-of-lease checks will still apply. This includes assessment under fair wear and tear guidelines as well as any excess mileage charges. 

Before going ahead, make sure you fully understand the total costs and consider whether any alternatives may be more suitable. Consider: 

If you're a Nationwide Vehicle Contracts customer and you're considering ending your lease early, get in touch with our team. We'll help you understand your options and request an early termination quotation from your finance provider where available.