Operational Lease
Early termination of a lease agreement
Updated
Sometimes your situation changes: a new job, less work, or needing a different car. Terminating a lease agreement early is possible, but often comes with costs.
Penalty or buyout sum
For an operational lease, the leasing company often charges a fee because the car has not yet been fully depreciated. This buyout sum is usually a percentage of the remaining instalments.
Alternatives
Enquire about a contract takeover by a colleague or another entrepreneur. This can be more cost-effective than a buyout.
What factors influence the amount of the buyout sum?
The amount of the buyout sum for early termination of an operational lease agreement is determined by various factors. A crucial factor is the residual value of the vehicle at the time of termination. The higher the remaining economic value of the car relative to its book value, the more favourable this can be. The original contract term and the remaining term also play an important role in the calculation.
In addition, the leasing company looks at the already depreciated value versus the expected depreciation. Any costs incurred for delivery, maintenance packages, and other services calculated over the entire term are often (partially) deducted. It is advisable to consult the general terms and conditions of your lease agreement for the specific determination criteria your leasing company applies.
Can a leasing company refuse to terminate a contract early?
In principle, an operational lease agreement offers the possibility of early termination, provided the associated conditions and costs are met. The leasing company will generally not simply refuse such a request, as they are compensated for lost income and the covering residual value of the vehicle through the buyout sum. The right to early termination is often explicitly stated in the general terms and conditions.
However, the leasing company may apply specific procedures and deadlines that must be followed. Failure to comply with these procedural requirements can lead to delays or additional costs. A refusal may also occur if there are payment arrears or other contractual breaches, in which case the leasing company may first demand fulfilment of the original obligations.
- Residual value of the vehicle
- Original and remaining contract duration
- Depreciation and incurred costs
- Specific contractual conditions
Frequently asked questions
Who pays the buyout sum for a company car?
That is stipulated in your company car policy. Sometimes the employer, sometimes (partially) the employee.