Terminate car lease early
Is it possible to end the lease early?
Early termination of a current leasing contract is often difficult for the lessee. And yet there are situations in which it is necessary to terminate a leasing contract before the end of the contract term: this may be due to serious health problems, loss of employment or other personal reasons that make it necessary to return the vehicle.
In most cases, the right of withdrawal allows the lessee to terminate the contract extraordinarily, often without long-term financial consequences. However, there must be specific reasons for which the lessee can no longer meet the contractual obligations.
When is it possible to end the lease early?
A lease can be terminated before the end of the regular lease term under certain circumstances. While job loss, illness and bankruptcy or going out of business of the company are not recognized reasons for terminating the lease, there are events that justify early termination.
A total loss, theft of the vehicle or the death of the lessee can lead to early termination.
In the event of death, the leasing contract does not end automatically, but is often transferred to the heirs. However, relatives have the option of terminating the contract within one month of the event, provided that a special right of termination in the event of the lessee's death has been contractually agreed.
A total loss is when the leased vehicle has been irreparably damaged in an accident. In this case, the repair costs must amount to more than 60 percent of the replacement value. Under these circumstances, the lessee can terminate the contract prematurely, often without having to pay compensation.
Theft of the vehicle is also a reason for termination. In this case, both the lessor and the lessee are released from further obligations, provided that the necessary police and insurance steps are taken.
What options are there to terminate a leasing contract early?
Termination agreement
A termination agreement offers an immediate solution for ending the leasing contract, but often entails a significant compensation payment. This option requires extraordinary termination and is usually associated with comprehensive reversal.
Leasing takeover
Transferring a leasing contract to a new contractual partner is the easiest way to get out of a current leasing contract. There are exchange platforms on the Internet that help to find a suitable person to take over the lease. This is a practical solution for those who want to return the vehicle early without having to pay the full balance.
Vehicle change
A vehicle exchange offers the opportunity to swap the current leasing contract for a new one, often with a newer or higher-value leased vehicle. Before choosing this option, you should carefully consider the costs involved. The leasing company will assess whether the change makes economic sense. Despite the possible high costs, this can be an attractive option, especially if your needs or tastes have changed.
Costs and financial consequences of early termination
Anyone wishing to terminate their leasing contract should be prepared to pay the leasing company's financial losses. The immediate costs include the termination fee, which is due when the contract is terminated. In addition, the outstanding leasing installments that would have accrued up to the official end of the term must be paid.
The lessor has the option of having the reduction in value of the leased vehicle paid out, especially if the vehicle is damaged. If there is also a delay in payment, this can affect the total amount of the final payment, which also includes a redemption value. This value reflects the current market value and use of the vehicle.
Car subscription as an alternative to leasing
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Advantages of a car subscription over leasing
More flexibility
Leasing contracts rarely offer the option of early termination. A car subscription, on the other hand, can be terminated monthly and can be paused for up to three months with SIXT+. This creates financial leeway in uncertain phases. This is an advantage for private individuals and companies with employees in their probationary period as well as start-ups.
Short runtime
Leasing contracts usually start with a contract term of 24 months. The car subscription makes it possible to get out after just a few months without any long-term obligations. The minimum term of the SIXT+ Auto Abo is 30 days.
Secure planning
The SIXT+ car subscription not only covers the MOT and inspection, but also maintenance and workshop costs as well as liability insurance. This offers a level of security that is not always available with leasing. Protection packages can be booked as an option.
Frequently asked questions about terminating a leasing contract prematurely
What costs are incurred for the early termination of a leasing contract?
Early termination of a leasing contract typically incurs a termination fee and compensation payments. While the leasing contract often provides for high costs, the leasing bank sometimes offers the possibility of reducing the expenses under certain conditions. If extraordinary termination is necessary, the lessor can also claim compensation for the depreciation of the vehicle.
In addition to the outstanding lease payments that are due until the end of the term or until extraordinary termination, further costs may be incurred.
What happens if the vehicle is damaged or the residual value is lower?
If the leased car has significant damage or the residual value falls below the expected value, the lessee may be faced with claims for damages from the leasing company. The leased asset is valued on the basis of its current condition and any reduction in value is offset against the originally agreed repurchase value.
Can the leasing contract be transferred to another person?
The transfer of a leasing contract is generally possible, but requires the consent of the leasing company. This option can be particularly attractive in order to get out of the leasing contract early without bearing the full financial burden. The lessor's consent is crucial and can often be obtained by the new lessee assuming the remaining obligations.
If the lessee can no longer afford the monthly leasing installments, a default in payment usually occurs, which can result in legal action on the part of the leasing company. The right of termination enables the leasing company to terminate the contract prematurely in the event of non-payment and possibly reclaim the vehicle.
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