Ending Lease Contracts Early | Nationwide Vehicle Contracts (2024)

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 toreturn the vehicle early for a set feewhich 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 circ*mstances have changed such as relocation or redundancy? Or maybe you're nearing the end of your contract term and wish totake 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 costlyso 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 thediscretion of the finance providerand 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 factorsand 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.

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.

Can I pay off my car lease full?

No, it's not possible to pay off your remaining car lease early. A leasing agreement is a legally binding agreement where the customer has agreed to set monthly rentals for a fixed term. If worst comes to worst and you can no longer afford the payments, you will have to terminate your lease agreement. You could also speak to your finance provider, who may extend your lease agreement for a reduced monthly cost.

If I return my lease vehicle early, will I get the initial rental back?

You cannot get the initial rental back at the end of your car lease. The initial rental is paid to the finance provider at the start of the agreement and contributes towards the cost of your whole lease; therefore, you cannot get it back.

The price of your initial rental will vary depending on which option you choose; typically, you can pay one, three, or six months upfront. If you put down a higher initial payment, your monthly rentals will be cheaper, but remember that you don't get the money back at the end of the lease.

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, theprocess can take between three to four weeksso please bear this in mind when contacting us.