What Is a Car Lease Termination Fee or Penalty Fee

There is technically no such thing as a termination fee or penalty fee to end your car lease early. However for your car lease, you will have to pay fees including paying off the remaining balance of your lease agreement as well as returning your leased car. So these are not really fees, but costs that you are obligated to pay to break your car lease agreement.

How do you calculate the cost to terminate your car lease agreement early?

Many lease financing companies will calculate your early lease termination cost by:

  • Adding up your the remaining amount of lease payments you have left
  • Then subtracting the total estimated cost of the vehicle which you can research on various forums and used car websites.
  • You will owe the difference.

My recommendation is to avoid ending a car lease agreement early, but of course, real life happens and thus this scenario is unavoidable.

Rather than pay this cost, check out websites that allow you to transfer your current leased vehicle for someone else to take over.

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