Ending Your Car Lease Early: Costs, Options, & Tips

A car lease contract offers flexibility, but sometimes life circumstances change, and you want to end the lease early. What are the options, what costs will you incur, and what’s the best way to proceed? This article sheds light on all important aspects concerning “ending a car lease early”.

What Does “Ending a Car Lease Early” Mean?

“Ending a car lease early” means dissolving the lease contract before the agreed-upon term expires. This might be necessary for various reasons, be it a job change, moving abroad, or simply the desire for a different vehicle. From a technical perspective, early termination is a complex process that considers various financial and legal aspects. Dr. Hans Müller, an expert in vehicle financing, emphasizes in his book “Leasing verstehen” (Understanding Leasing): “The early termination of a lease contract should be well-considered, as it can involve costs.”

Costs associated with ending a car lease early

The early termination of a contract is anchored in German law, specifically in the Civil Code (BGB). Generally, a lease contract is binding, but under certain circumstances, it can be terminated early. Here, the individual contract terms play a crucial role.

Options for Early Termination

There are various ways to end a car lease early:

Contract Takeover by a Third Party

A common option is the takeover of the lease contract by a third party. Here, another person steps into the existing contract and takes over the remaining lease payments. This is often the most cost-effective option.

Returning the Vehicle to the Lessor

Another option is returning the vehicle to the lessor. This typically incurs costs, which are comprised of the outstanding lease payments, a potential early termination fee, and the vehicle’s depreciation.

Right of Tender (Finding a Replacement Lessee)

In some lease contracts, a right of tender is agreed upon. This means the lessee can propose a suitable replacement lessee to the lessor. If the lessor accepts the proposed replacement, the early termination fee for the lessee is generally waived.

Costs of Early Termination

The costs for early termination of a car lease can vary and depend on various factors, such as the remaining term of the contract, the vehicle’s condition, and the individual contract terms. Professor Eva Schmidt, an expert in automotive economics, explains: “The costs can be significant, so it’s advisable to inform yourself thoroughly beforehand.”

Tips for Early Termination

Carefully review your lease contract for clauses regarding early termination.
Compare the different options and their costs.
Contact your lessor and discuss the possibilities.
Document all communication with the lessor.

Ending Your Car Lease Early: Conclusion

Ending a car lease early is possible but involves costs and effort. Careful planning and weighing the different options are essential. Leverage our expertise and contact us for individual consultation. We are happy to assist you!