How to get out of a business car lease early — and what it really costs

Three ways to hand back a company car before the end of the contract, what each one costs, and how to work out which is cheapest for your business.

If your business needs to hand back a company car early — a driver has left, the business has changed shape, or the car no longer fits — there are three realistic routes. They cost very different amounts.

First: what your agreement actually says

A business contract hire agreement is a fixed-term contract. There's no automatic legal right to end it early: the funder's terms decide what happens. Find your agreement and look for three things:

• The early termination clause, which sets out how the charge is calculated
• Whether the agreement can be transferred to another business, and the fee for doing so
• Your mileage allowance and excess mileage rate

Route 1: Pay the Early Termination Charge

The funder takes the car back and invoices an Early Termination Charge. With many funders it's around half of the rentals you have left to pay. Some charge more.

There can be extras on top:

• Excess mileage — some funders reduce your mileage allowance for the period you're cutting short
• Damage beyond fair wear and tear, assessed against BVRLA guidelines
• Rental for the full month the car is collected in

On a car with a year or more to run, the bill is often several thousand pounds — for a car you no longer have.

Route 2: Transfer the lease to another business

Many funders let another business take over the agreement, subject to credit approval and an admin fee. The new business takes on the remaining rentals and the car. Your agreement ends with no Early Termination Charge.

This is what Swap-a-Lease is for. You list the car, businesses looking for a short-term or ready-to-go car get in touch, and you hand over once the funder approves the new hirer.

Route 3: Keep the car and redeploy it

If someone else in the business can use the car — a new starter, a pool car — keeping it can be the cheapest option of all. It's worth checking before paying to end the contract.

Which route costs less?

Get two numbers before you decide:

• Your Early Termination Charge — ask the funder for a settlement quote, or estimate it with our Early Termination Charge Calculator at swap-a-lease.co.uk/calculator
• Your funder's transfer fee — see our funder fee table at swap-a-lease.co.uk/fees, then confirm with the funder

If the car has more than a few months left, transferring it is usually far cheaper. The longer the term left, the bigger the gap.

Ready to move it on?

Listing a lease on Swap-a-Lease takes a few minutes and costs £39.99. A success fee is payable only if the transfer completes: two months' rental, or one month if fewer than 12 months remain. Your contact details stay hidden until a business registers interest.

This guide is general information, not legal or financial advice. Charges and transfer rules vary by funder: always check your own agreement and get a written quote.