Ending expensive leasing: How to refinance into a low-cost loan
02.06.2025
9
Minutes
Katrin Straub
Managing Director at nextsure
Has your leasing contract become a monthly burden? High instalments and inflexible terms do not have to be a permanent situation. Discover how refinancing an expensive leasing contract into a loan not only saves you money, but also paves the way to ownership.
The topic in brief and concise terms
Refinancing can reduce the monthly instalment by up to 30 per cent and eventually leads to ownership of the vehicle.
Early termination of a leasing agreement is possible through a termination agreement, a lease transfer or revocation.
The "cancellation joker" can still allow an exit from defective contracts (often concluded after June 2014) years later, without high costs.
Leasing cost trap: When refinancing makes sense
A lease agreement may often seem attractive at first, but it can quickly turn out to be a costly trap. If your driving habits change and you exceed the agreed mileage, additional payments of up to 15 cents per kilometre may be due. A change in your income situation can also make a monthly instalment of, for example, 450 euros a heavy burden. In such cases, refinancing an expensive lease agreement into a loan is an alternative worth considering. It makes it possible to renegotiate the terms and adapt them to your current situation. Refinancing is worth considering even if the new loan offers an interest rate that is just 0.5 percentage points lower. By switching, you not only gain flexibility, but can also noticeably reduce your monthly expenses, as you can read under Refinancing an instalment loan and saving. A thorough review of the contract details is the first step towards financial relief.
Exiting the contract: options for early termination
The ordinary termination of a leasing agreement is hardly provided for by law and is often associated with high costs. Lessor want to secure the full refinancing amount over the term. Nevertheless, there are three viable ways to end a contract early. These options should be carefully reviewed:
The termination agreement: You agree with the lessor to end the contract early. This is often associated with a high one-off payment, known as the settlement amount.
The lease transfer: You find a successor who takes over your contract on the existing terms. The lessor must agree to this change, which succeeds in around 70 per cent of requests.
The revocation of the contract: If your contract contains incorrect revocation information, you can often revoke it years after signing. This is a very consumer-friendly option.
Each of these alternatives has specific financial and legal consequences. Before you make a decision, a precise calculation of the costs incurred is essential. The next step is therefore to calculate the potential settlement amount precisely.
Calculating the buyout fee: how much the exit costs
The settlement amount is the price for an early exit and the purchase of the vehicle from the lease agreement. Its calculation is complex, but it follows a clear logic. It is made up of the remaining lease instalments and the contractually agreed residual value of the vehicle. Interest and other costs that would have accrued over the remaining term are deducted from this sum. An example: with 18 instalments remaining at EUR 400 each and a residual value of EUR 15,000, this gives a base amount of EUR 22,200. After deducting the interest saved of around EUR 1,200, the settlement amount would be EUR 21,000. Especially at the start of a contract, this amount is often high, as the vehicle’s depreciation is greatest in the first two years. A detailed breakdown from the leasing provider is essential for further planning in order to compare this amount with the terms of a new loan, as described under favourable car loan. This gives you a sound basis for deciding whether to refinance.
From leasing to ownership: the benefits of an instalment loan
The switch to an instalment loan ends the pure usage arrangement and makes you the owner of the vehicle. This brings clear financial and practical benefits. With a loan, there is no mileage limit, which rules out expensive end-of-term payments from the outset. Moreover, by choosing a longer term, you can flexibly adjust the monthly instalment to your budget and reduce the burden by up to 40 per cent. An instalment loan also offers the option of making additional repayments, allowing you to become debt-free more quickly. While with leasing you pay for every scratch at handback, as the owner you decide for yourself on repairs and modifications. However, the biggest advantage lies in the overall cost savings, which, thanks to a lower interest rate over the term, can amount to several thousand euros. The choice of a loan with a final instalment can further optimise the monthly payments. This lays the foundation for more cost-effective vehicle finance in the long term.
Expert knowledge: The cancellation joker as an exit option
One particularly effective method of terminating a leasing agreement is the so-called cancellation joker. Many agreements concluded after 12 June 2014 contain incorrect or unclear cancellation notices. This means that the statutory 14-day cancellation period never starts to run. You can therefore often cancel the agreement years later. A successful cancellation leads to the contract being unwound. You return the vehicle and receive a refund of all leasing instalments paid to date and any deposit. In return, you only have to pay the leasing company compensation for use for the kilometres driven. Our expert tip: Be sure to have your agreement checked by a solicitor specialising in banking and capital markets law before taking any other steps. The cost of such a review is often only a few hundred euros, while the potential savings can run into the thousands. This is the legally cleanest way to exit an expensive agreement.
Step by step: implementing refinancing in practice
Refinancing from leasing to a loan requires a systematic approach. With the right sequence, you can secure the best terms. Follow these four steps:
Contract review and cost analysis: Review your leasing agreement for exit clauses and request an exact calculation of the settlement amount from your leasing provider.
Obtain loan offers: Compare the terms for an instalment loan in the amount of the settlement sum without obligation. Use online comparison calculators for this purpose.
Calculate cost-effectiveness: Compare the total costs of the lease (remaining instalments plus final settlement) with the total costs of the new loan. Savings of at least five per cent should be the goal.
Arrange the process: Finalise the new loan agreement and use the loan amount to settle the leasing contract on time. The new bank often supports you in this process.
With this approach, you can ensure that the loan settlement with another bank runs smoothly. At the end of the process, you will have a lower monthly burden.
The refinancing of an expensive leasing agreement into a loan is more than just a simple change in financing. It is a strategic step towards greater control and lower monthly costs. Instead of high instalments and strict conditions, you benefit from the advantages of ownership and flexible repayment. Savings of more than 20 per cent on monthly instalments are not uncommon. The process requires careful planning and comparing offers, but the gain in financial freedom justifies the effort. You exchange a financial burden for a more adaptable and often cheaper financing model. Request an individual risk analysis now: Have your insurance situation checked free of charge and receive specific suggestions for optimisation.
More useful links
Wikipedia offers general information on the topic of leasing, including definitions and types.
The Verbraucherzentrale Bundesverband (vzbv) provides court rulings on the right of withdrawal for leasing agreements with kilometre-based billing.
The Verbraucherzentrale Schleswig-Holstein provides information on refinancing and follow-on financing, which can also be applied to general financing issues.
The Deutsche Bundesbank provides statistics on interest rates and yields for consumer loans to private households.
The Statistisches Bundesamt (Destatis) provides information on wealth and debt in Germany.
The Caritas provides information and online advice on debt counselling.
The Bankenverband provides information on creditworthiness and how it is assessed for consumers.
The Bundesgerichtshof (BGH) provides relevant rulings and documents that may be important for legal issues in the financial sector.
FAQ
How do I find out whether my leasing agreement qualifies for revocation?
Check the date the contract was concluded. If it is after 12 June 2014, the chances are good. For a legally reliable assessment, you should have the contract reviewed by a consumer advice centre or a specialist lawyer.
Does debt restructuring improve my SCHUFA score?
Indirectly, yes. If you consolidate several loans through refinancing or replace an expensive instalment with a lower one, this improves your financial reliability. Successfully and punctually servicing the new loan has a positive effect on your score.
Can I also refinance a lease for an electric car?
Yes, the process is identical for electric cars. However, please note the specifics regarding residual value, as battery lifespan and the development of battery technology play a greater role here and can influence the estimate.
What happens to my down payment when I refinance?
The deposit is usually taken into account when calculating the settlement amount, as it reduced the monthly instalments. If the contract is successfully revoked, you can receive the deposit back in full.
How long does the entire debt restructuring process take?
The process can take between two and six weeks. The duration depends on how quickly the leasing provider communicates the settlement amount and how promptly the new bank processes and disburses the loan application.
What documents do I need for refinancing?
You will need your full leasing agreement, the notice of the settlement amount from the leasing company, as well as the usual documents for a loan application: payslips for the last three months, bank statements and a copy of your identity card.
