Yes, you can give back a leased car early in the UK, but it is rarely a simple or cost-effective process. Terminating your lease agreement ahead of schedule will almost certainly involve paying early termination charges. These fees can be substantial, often totaling the remaining monthly payments minus a small discount for early settlement. Before proceeding, you must contact your finance provider to request a settlement figure, which is the official amount required to end the contract.
The main reason for the high cost is how the finance is structured. The leasing company has calculated the vehicle's depreciation over the full term. By ending early, you are responsible for covering the remaining depreciation cost, plus potential administrative fees. It's crucial to get the settlement figure in writing and understand its breakdown.
Before you decide, explore these alternatives, as they might be more financially sensible:
- Lease Transfer: Some contracts allow you to transfer the lease to another qualified individual through a company like LeaseTrader or via private agreement. The new person takes over the payments, freeing you from the obligation. There is usually a transfer fee, but it's typically far less than termination charges.
- Vehicle Buyout: Check your contract to see if you have an option to purchase the vehicle outright. You would pay the car's predetermined future value (or a similar figure) to own it. You could then sell the car privately, though this carries the risk of not recouping the full amount.
The financial outcome heavily depends on your specific contract terms and the current used car market. If the market is strong, the car's actual value might be higher than the settlement figure, making a buyout and subsequent sale a possibility. However, this is a speculative route. The most direct path is to request the settlement figure and compare it against the sum of your remaining payments to see if terminating early makes financial sense for you.
| Consideration | Typical Cost/Factor | Key Details |
|---|
| Early Termination Fee | Often 50-100% of remaining payments | Covers outstanding finance + depreciation. |
| Administration Fee | £100 - £300 | Charged for processing the early termination. |
| Excess Mileage/Wear | Variable (e.g., 10p per mile over) | You are liable for any charges outlined in the contract. |
| Lease Transfer Fee | £150 - £500 | Usually cheaper than full termination; must find a new renter. |
| Voluntary Termination Right | 50% of total financing cost | A legal right under some agreements, but strict criteria apply. |
