Short answer: the CFPB says that with a lease, “You may be responsible for early termination charges if you end the lease early. These fees can be very expensive. You can’t simply return the vehicle and stop making payments” (CFPB, read October 30, 2026). Your lease must tell you how that charge is figured. This is general information, not legal advice.
What your lease must disclose
Under Regulation M, a lease must state the conditions under which you or the lessor may end the lease before the end of the term, and “the amount or a description of the method for determining the amount of any penalty or other charge for early termination, which must be reasonable” (12 CFR 1013.4(g)(1)). A motor vehicle lease must also carry a notice substantially similar to this one (12 CFR 1013.4(g)(2)):
“Early Termination. You may have to pay a substantial charge if you end this lease early. The charge may be up to several thousand dollars. The actual charge will depend on when the lease is terminated. The earlier you end the lease, the greater this charge is likely to be.”
Regulation text as in eCFR, up to date as of October 28, 2026. The same section requires these disclosures, which matter when you end early (12 CFR 1013.4):
- Purchase option (paragraph (i)): whether you may buy the vehicle and, if you may buy it before the lease ends, the price or how it is figured and when you may do it.
- Right of appraisal (paragraph (l)): if what you owe at early termination is based on the vehicle’s realized value, you may get a professional appraisal at your own expense by an independent third party you and the lessor agree on, and that appraisal is final and binding.
- Wear and mileage (paragraph (h)): the lessor’s wear and use standards, which must be reasonable, and the amount or method for any excess mileage charge.
Options to ask your lessor about
Find the early termination section of your lease first, then ask the lessor in writing:
- What is my early termination charge today, and how was it figured, line by line?
- Can I buy the vehicle now, and what is the purchase price? (Your lease says whether a purchase option before the end of the term exists.)
- Does my lease allow a transfer to another person, or a sale to a dealer or other buyer, and what fees or conditions apply?
- If I keep the lease to the end, what end-of-lease fees, mileage and wear charges should I expect?
Compare each answer with the cost of keeping the lease until it ends. Get any agreement in writing.
If you are behind on payments
The CFPB says: “If you’re having problems making payments on an auto loan or lease, contact your lender or servicer as soon as possible to ask what options are available to you.” It also says your lessor “may be willing to work with you on an affordable payment plan”, and that within your contract or under state law you might have the right to “cure” or reinstate your lease after missing a payment (CFPB). See behind on car payments: repossession and options.
GAP on a lease
The CFPB describes GAP as “an optional product that is intended to cover the difference between the amount you owe on your auto loan and the amount the insurance company pays if your car is stolen or totaled”, and lists it among the add-on products a dealer will likely offer “when purchasing or leasing a car” (CFPB). Check whether your lease includes GAP and what it covers. The CFPB also says: “You have the right to cancel these optional add-on products at any time and reduce your costs”. GAP covers a theft or total loss, not a choice to end the lease early.
Servicemembers
The CFPB says that “Under certain circumstances, the Servicemembers Civil Relief Act (SCRA) allows active-duty servicemembers to terminate an auto lease without having to pay early termination charges or a penalty.” The steps include written notice to the lessor, a copy of your orders, and returning the vehicle within 15 days after the notice is delivered. The lessor can still charge taxes, title and registration fees and other unpaid amounts, including reasonable excess wear and mileage charges (CFPB).
If you would borrow to pay the charge, only for the math
This example is only for the math, not a typical early termination charge. It compares paying a $2,000 charge over 24 months at the Federal Reserve’s August 2026 averages: 11.90% APR for 24-month personal loans and 22.36% for credit card plans (G.19).
| Option | Monthly payment | Interest | Total paid |
|---|---|---|---|
| Personal loan at 11.90% | $94.05 | $257.20 | $2,257.20 |
| Credit card at 22.36% | $104.11 | $498.64 | $2,498.64 |
$94.05 x 24 = $2,257.20, and $104.11 x 24 = $2,498.64. Your rate depends on your credit and the lender. If you plan to buy the vehicle, compare the lease purchase price with a personal loan vs an auto loan for a car, and see how to budget for a loan payment.
Checklist
- Read the early termination, purchase option and appraisal parts of your lease.
- Ask the lessor in writing for today’s charge and how it was figured.
- Ask about a buyout, transfer or sale and the fees for each.
- Contact the lessor early if you are behind on payments.
- Check whether you have GAP and what it covers.
- If you are on active duty, check the SCRA steps.
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Sources
- 12 CFR 1013.4, Content of disclosures (Regulation M, Consumer Leasing) (eCFR)
- CFPB: What should I know about leasing versus buying a car? (last reviewed September 12, 2023)
- CFPB: What should I do if I can't make my car payments? (last reviewed September 12, 2023)
- CFPB: What is Guaranteed Asset Protection (GAP) insurance? (last reviewed March 8, 2024)
- CFPB: I am in the military and may be stationed overseas. How can I handle my auto lease or auto loan? (last reviewed May 31, 2023)
- Federal Reserve: G.19 Consumer Credit (released October 7, 2026), terms of credit, August 2026: credit card plans and 24-month personal loans
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.