Car Leasing Glossary - Early Termination

Early Termination (car leasing term)

A vehicle's depreciation (define: depreciation) is the highest in the first few months after it leaves the dealer's lot. Since a lessee pays for depreciation in equal monthly payments, lessees who end a lease early have almost always used up more of a car's value than they've paid for.

So lease contracts generally carry penalties for early termination. Be aware of what those penalties are before you sign the lease contract.

Ending a lease before the scheduled termination date. The lessee will typically be required to pay an early termination charge as described in the lease agreement.

Car Leasing Early Termination Charge