Early Termination: Ending Your Lease Contract Early (2023)

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.

(Video) Ending Your Lease Contract Early

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. Early Termination: Ending Your Lease Contract Early (1)

    1Contact Nationwide Vehicle Contracts

    Please contact the Nationwide Vehicle Contracts team on 0345 811 9595 (option 4) or email [emailprotected] 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.

    (Video) How to Break A Rental Lease [How can I get out of my lease early?]

  2. Early Termination: Ending Your Lease Contract Early (2)

    2Contacting 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. Early Termination: Ending Your Lease Contract Early (3)

    3Response 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.

    (Video) [Korean Law 101] I want to terminate my lease contract early! Is it okay?

  4. Early Termination: Ending Your Lease Contract Early (4)

    4Proceeding 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. Early Termination: Ending Your Lease Contract Early (5)

    5If 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.

    (Video) Early Lease Termination: what ACTUALLY happens when you end your auto lease way too early!

  6. Early Termination: Ending Your Lease Contract Early (6)

    6Clearing 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. Early Termination: Ending Your Lease Contract Early (7)

    7Excess 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.

    (Video) Landlords, what happens if your tenant wants to leave early?

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.


Can you get out of a lease contract early? ›

You can only end your fixed term tenancy early if your agreement says you can or by getting your landlord to agree to end your tenancy. If your agreement says you can end your fixed term tenancy early, this means you have a 'break clause'. Your tenancy agreement will tell you when the break clause can apply.

What is the penalty for returning a leased car early? ›

Returning A Lease Car Early

If you want to end your lease early, you will need to pay a termination fee to the finance company. This is normally 50% of the total remaining rentals left.

Can you voluntarily terminate a car lease? ›

Repossession and Voluntary Surrender

If you feel you can no longer continue paying for your leasing car in any circumstance, you should enter into a voluntary termination. In the case of repossession, you are likely to be charged for: The entire remaining balance of the car lease.

Can I swap my lease car early? ›

With some lenders, you can return your leased vehicle at any time – which includes after having it for six months. However, depending on their terms and conditions, you may face early termination fees, which could be as much as repaying the entire remaining balance on the lease agreement in full.

How does a 12 month break clause work? ›

A break clause is a tenancy agreement clause that allows either the tenant or landlord, to end the tenancy agreement during the fixed term. For example, a 12-month tenancy agreement with a six-month break clause would allow either party to end the tenancy in accordance with that clause.

What is a break clause in a lease? ›

What is a break clause in a lease? A break clause in a commercial lease (also known as an option to determine) is fairly common. It allows both parties flexibility if any issues or changes in circumstances occur, and provides the parties with a mechanism to terminate the agreement early if certain criteria are met.

Why leasing a car is a good idea? ›

Car Leasing Pros:

You have lower monthly payments with a low — or no — down payment. You can drive a better car for less money. You have lower repair costs because you are under the vehicle's included factory warranty. You can more easily transition to a new car every two or three years.

Will voluntary termination affect my credit score? ›

Does voluntary termination affect my credit score? Voluntary termination will probably appear on your credit score. However, as long as you make your 50% repayment amount and any additional charges (e.g. for wear and tear), it is unlikely to have a sizeable impact on your ability to get car finance in the future.

Does early termination fee affect credit? ›

Breaking a lease won't hurt your credit score if your landlord agrees that you have paid everything you owe, including penalties such as a fee for early termination, plus the normal cleaning and security fees.

How long does a voluntary surrender Stay on credit? ›

Voluntary surrender and repossession are loan defaults, which stay on your credit reports for seven years. That type of negative mark will harm your scores, especially your automotive-specific credit scores. The next time you apply for a car loan, you'll likely be deemed high risk and charged high interest.

What if there is no break clause? ›

If there is no break clause in the agreement, then you can only end the tenancy if both parties agree to it. This is called surrendering the tenancy. The parties can only surrender the tenancy if the landlord agrees.

What is a reasonable break clause? ›

A break clause usually specifies the length of notice required to end the tenancy by both the tenant and the landlord. There is no minimum period of notice that a break clause must require in order to be valid, because the clause is a matter of contract.

What happens if there is no break clause? ›

If no break clause exists, a landlord can only end the tenancy agreement if the tenant has broken the contract terms. To terminate the agreement, the landlord must issue a Section 8 notice stating why the tenancy is ending.

Why would a tenant want a break clause? ›

Tenants will want break clauses to be included in leases to give them flexibility. They may exercise a break in response to a need to change their space requirements and/or reduce their costs.

What's a 6 month break clause? ›

Enter the break clause - a contractual mechanism designed to allow the tenant or landlord to exit the AST agreement early. A break clause usually becomes active midway through the tenancy – if it's a 12-month contract, the break clause can be activated after six months.

Can I request a break clause in my tenancy agreement? ›

It might not be labelled as a 'break clause'. Look for anything about giving notice or terminating the tenancy early. You can ask for a break clause to be included before you sign the contract.

Why are car leases so expensive now 2022? ›

New car leases are more expensive due to a significant change in market conditions. An inventory shortage is making it harder to find popular vehicles, and manufacturer incentives are down.

Is it better to lease or finance? ›

In general, leasing payments are lower than finance payments. When you lease, you're not paying for the entire vehicle but rather the value you use up for the time you're driving it. In the short term, based solely on monthly payments, it's typically cheaper to lease than to finance.

What is the disadvantage of leasing a car? ›

The obvious downside to leasing a car is that you don't own the car at the end of the lease. That means you don't have a trade-in if you decide to purchase a car. Consumers who routinely lease cars over many years may end up paying more than they would if they had initially bought the car.

What is the difference between voluntary surrender and voluntary termination? ›

Voluntary surrender differs from voluntary termination because while you give the car back, you still owe the finance company all of the remaining balance. Essentially once you hand the car back it's then sold. You'll then owe the finance company the difference between what they sell it for and how much you owed.

What is voluntary termination? ›

A voluntary termination of employment occurs when an employee submits a written or verbal notice of resignation, including intent to retire, to his or her supervisor or when an employee is absent from work for three consecutive workdays and fails to contact his or her supervisor (job abandonment). Procedures.

What is half rule obligation? ›

Voluntary termination, or VT, is also referred to as the "Halves Rule" because, in order to terminate the contract, the customer must pay or have paid at least half of the total amount owed to the finance company.

Does apartment lease show on credit report? ›

Contact your landlord or property management company.

If they agree, your lease will appear in the "accounts" section of your Experian report as one of your tradelines. It will list the date the lease started, your monthly payment amount and your payment history for the past 25 months.

Does lease affect credit score? ›

If you're concerned about how this decision will factor into your credit report and scores, rest assured—their impact is the same. This means leasing a car can help you build your credit history just like a loan would.

How do you get your name off a lease after a breakup? ›

Legally, you cannot force a roommate off a lease unless they were convicted of a crime. That being said, landlords may agree to change the terms of the lease including an amendment to exclude a problem tenant.

How much will your credit score drop with a voluntary repossession? ›

Answer provided by. “In the grand scheme of your credit score, a voluntary repo is just the same as an involuntary repo. Expect your credit score to drop anywhere from 50 to 150 points, depending on other credit factors. That's not to say you should sit back and let your lender take your car.

How do I return a car I can't afford? ›

If you simply can't afford your car payments any longer, you could ask the dealer to agree to voluntary repossession. In this scenario, you tell the lender you can no longer make payments ask them to take the car back. You hand over the keys and you may also have to hand over money to make up the value of the loan.

Do you still owe after a repossession? ›

Often at an auction the car can be sold for far less than it is worth, this means that even after having the car repossessed, you might still owe the bank more money.

Does getting out of a lease hurt your credit? ›

If you pay all outstanding charges before moving, including any back rent and fees, breaking a lease won't hurt your credit score. However, breaking a lease can damage your credit if it results in unpaid debt.

How can you break a lease in NC? ›

You must provide your landlord with a written notice of your intent to move out. After the landlord receives the notice, the lease then ends after 30 days.
You can provide any of the following forms of proof:
  1. An Address Confidentiality Program Card.
  2. A copy of a restraining order.
  3. A copy of a court order of protection.

What is the penalty for breaking a lease in Texas? ›

Breaking a lease may get expensive, but the State of Texas does not allow landlords to impose a specific penalty. Your only liability is the landlord's expenses.

What happens if you break a lease in Florida? ›

In most instances, breaking lease agreements usually requires the tenants to pay about 2 to 3 months' rent or forfeit their security deposit. You can negotiate the termination fees with the landlord with the intention to have him/her reduce the fees and return your deposit.

How do you get your name off a lease after a breakup? ›

Legally, you cannot force a roommate off a lease unless they were convicted of a crime. That being said, landlords may agree to change the terms of the lease including an amendment to exclude a problem tenant.

Does apartment lease show on credit report? ›

Contact your landlord or property management company.

If they agree, your lease will appear in the "accounts" section of your Experian report as one of your tradelines. It will list the date the lease started, your monthly payment amount and your payment history for the past 25 months.

Does paying rent build credit? ›

If you regularly pay your rent on time and in full, you can have your good payment history reported to credit bureaus to help raise your credit score through a rent-reporting service. Know that any rent-reporting services will require a fee for the service, which is usually paid on a monthly basis.

How much is it to break a lease in NC? ›

The penalty could be the equivalent of 2 months' rent. If the monthly rent is $1,500, you could require tenants to pay a penalty of $3,000 when looking to terminate their lease. Also, you may want tenants using this clause to provide you sufficient notice.

Can landlord keep security deposit for breaking lease in NC? ›

While there still exist some modern leases that include “forfeiture clauses” (where the landlord can keep more than their actual cost), these clauses are unenforceable under the current rules. In other words, a landlord cannot keep the entire security deposit just because there was some damage in the leasehold.

What a landlord Cannot do in NC? ›

A landlord cannot: Refuse to rent to a prospective tenant. Refuse to rent to a prospective tenant because he or she has previously terminated a lease agreement due to domestic violence. File to terminate the tenant's rental agreement.

How can I legally break my lease in Texas? ›

Texas law gives the landlord or the tenant the explicit right to end a lease early in a few specific circumstances:
  1. Military Service. ...
  2. Family Violence. ...
  3. Sexual Offenses or Stalking Victims. ...
  4. Tenant's Death. ...
  5. Landlord's Failure to Repair. ...
  6. Landlord's Failure to Install, Inspect, or Repair a Smoke Alarm.
7 days ago

What a landlord Cannot do in Texas? ›

This means your landlord cannot evict you without proper cause (most commonly nonpayment of rent) or otherwise disturb your right to live in peace and quiet. Your landlord must also protect you from any wrongful actions taken by other tenants. The right to health and safety in your home.

How long after signing a lease can you back out in Texas? ›

Termination Rights. Texas law allows tenants to end their leases after providing three days' written notice to their landlords who breach the state re-key laws.

What are legal reasons to break a lease in Florida? ›

Conditions Where Tenants Can Legally Break Their Lease in Florida
  • Active military duty. When a tenant is an active service member, it is common to be deployed and relocated to various places. ...
  • Uninhabitable rental unit/Violation of Florida health code. ...
  • Invasion of privacy by a landlord.
19 Dec 2019

Can landlord keep security deposit for breaking lease in Florida? ›

Landlords have 30 days from the termination of the lease to notify the tenant in writing of their intention to keep a portion of the tenant's security deposit. If the landlord fails to notify the tenant in writing within 30 days, the landlord forfeits the right to keep any portion of the security deposit.

What a landlord Cannot do Florida? ›

According to the Fair Housing Act, Florida landlords cannot ask potential renters questions about medical history, age, any disability, familial status, ancestry, national origin, marital status, sexual orientation, religion, color or race. Tenants cannot be discriminated against due to any of these reasons.


1. Ending a fixed term tenancy early
(Ministry of Business, Innovation and Employment)
2. Early Lease Termination Letter (Request) - EXPLAINED
3. When Your Tenants Want to Leave Early: The Early Termination Program for Tenants
(RentWerx Property Management)
4. Episode 6, How to Break an Apartment Lease Early and Get Your Deposit Back
(Montesino Law)
5. How to End a Car Lease Early
(Ronnie Haskins)
6. 5 Ways To End A Car Lease Early (2020)
(Naam Wynn)
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