Getting out of your lease contract early: what does it cost?
Ending a lease contract early is expensive, and usually more expensive than people expect. This is how that bill comes about, and what you can set against it.
Why terminating costs so much
A leasing company calculates its price over the full term. The purchase of the car, the expected residual value at the end, the servicing, the tyres — everything is spread across the number of months you signed for.
Stop halfway and that calculation no longer holds. The leasing company is left with a car worth less than budgeted and with costs it has not yet recovered. The termination fee covers that gap.
That is why the fee is usually highest at the start of a contract and falls as the end approaches.
How the amount is calculated
There is no statutory rate. What you pay is in your own contract, and the calculation differs per leasing company.
Common methods are: a percentage of the monthly payments still due, or the difference between the book value of the car and what it fetches on sale, often increased with administrative costs. Some contracts combine both.
Always request the exact amount in writing from your leasing company, with the calculation attached and with a validity date. An estimate over the phone is no basis for a decision worth thousands of euro.
Also watch what comes on top: excess kilometres, damage beyond normal wear, or missed servicing are settled at the end, whether you terminate, run it out or transfer.
The alternative: transferring instead of terminating
In a takeover, another company takes over your contract on the same terms. The leasing company loses nothing, because the remaining months are simply paid — by someone else.
That is why a transfer is almost always cheaper than terminating: you usually pay only an administrative fee instead of a charge that can run into the thousands.
The condition is that you find someone. That is the real work, and it does not succeed with every contract: a monthly payment far above market, or a four-year term that has barely started, struggles to find a candidate.
Do the maths before you decide
Put three amounts side by side before you sign anything.
One: what terminating costs today, according to your leasing company's written statement. Two: what you would still pay in monthly instalments if you run the contract out, so the monthly payment times the number of months remaining. Three: what a transfer costs, usually just the administrative fee, plus anything you contribute yourself to win a candidate over.
In many cases that third option is a fraction of the first. But work it out with your own figures — and run it past your accountant, because the tax and VAT treatment of a car depends on your situation.
Frequently asked questions
What is the average termination fee?
There is no meaningful average: it depends on your contract, on how many months still run and on the residual value of the car. It can range from a few hundred euro on a contract that is nearly finished to a substantial part of the remaining instalments on one that has just started. Request the exact amount in writing.
Can I end my lease if my business closes?
Ceasing your activity does not automatically end your lease contract. The obligation remains, including in liquidation. In that case contact your leasing company as early as possible and look at whether transferring to another company is a way out.
Is transferring always cheaper than terminating?
Usually, but not automatically. If your monthly payment is far above what a comparable car costs today, you will struggle to find anyone to take over without contributing something yourself. Work through both options with the real figures.
What if I have driven too many kilometres?
Excess kilometres are settled at the rate in your contract, whether you terminate, run it out or transfer. In a transfer this is a point to make clear up front: if someone takes over a contract whose mileage allowance is already partly used, they need to know.