Ending expensive leasing: How to successfully refinance with an affordable loan
2 Jun 2025
12
Minutes
Katrin Straub
CEO at nextsure
Has your leasing contract become a monthly burden? High instalments and rigid terms don't have to be permanent. Discover how refinancing an expensive leasing agreement into a loan can not only save you money but also pave the way to ownership.
The topic in brief and concise terms
Refinancing can reduce the monthly payment by up to 30 percent and ultimately results in ownership of the vehicle.
The early termination of a leasing contract is possible through a cancellation agreement, a lease transfer, or revocation.
The "cancellation joker" can still enable an exit without high costs years later in case of faulty contracts (often after June 2014).
Leasing Cost Trap: When Debt Restructuring Makes Sense
A leasing contract may initially seem attractive, but it can quickly become a financial 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 financial situation can also turn the monthly fee of, say, 450 Euros into a heavy burden. In such cases, refinancing an expensive leasing contract into a loan is a worthwhile alternative to consider. It allows you to renegotiate the terms and adapt them to your current situation. Refinancing is worth considering 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 significantly reduce your monthly expenses, as you can read under Reschedule your instalment loan and save. A thorough review of the contract details is the first step toward financial relief.
Termination of the Contract: Options for Early Termination
Terminating a leasing contract in an orderly manner is hardly envisaged by the legislator and is often associated with high costs. Leasing providers want to secure the full refinancing amount over the term. Nevertheless, there are three viable ways to terminate a contract early. You should carefully consider these options:
The cancellation agreement: You agree with the leasing provider on an early contract termination. This is often associated with a high one-off payment, known as the redemption sum.
The lease takeover: You find a successor who takes over your contract under the existing conditions. The leasing provider must agree to this change, which succeeds in around 70 percent of the inquiries.
The revocation of the contract: If your contract contains incorrect revocation information, you can often revoke it years after completion. This is a very consumer-friendly option.
Each of these alternatives has specific financial and legal consequences. Before making a decision, an accurate calculation of the arising costs is essential. Therefore, the next step is to precisely calculate the potential redemption sum.
Calculating the transfer fee: This is how much the exit costs
The settlement amount is the price for the early termination and purchase of the vehicle from the lease contract. Its calculation is complex, but it follows a clear logic. It consists of the outstanding lease instalments as well as the contractually agreed residual value of the vehicle. From this sum, the interest and other costs that would have accrued over the remaining term are deducted. An example: With 18 remaining instalments of 400 euros each and a residual value of 15,000 euros, this results in a base of 22,200 euros. After deducting the saved interest of approximately 1,200 euros, a settlement amount of 21,000 euros would remain. Especially at the start of a contract, this amount is often high because the depreciation of the vehicle is greatest in the first two years. A detailed statement from the lessor is essential for further planning, to compare this amount with the terms of a new loan, as described under affordable car loan. This creates a solid basis for the decision to refinance.
From Leasing to Ownership: The Advantages of an Installment Loan
Switching to an installment loan changes the mere usage relationship and makes you the owner of the vehicle. This brings tangible financial and practical benefits. With a loan, there is no longer any mileage restriction, which excludes expensive back payments from the outset. Furthermore, you can flexibly adjust the monthly rate to your budget through a longer term, reducing the burden by up to 40 percent. An installment loan also provides the option for special repayments, allowing you to become debt-free faster. While with leasing, you pay for every scratch upon return, as the owner, you decide yourself on repairs and modifications. However, the biggest advantage lies in the total cost savings, which can amount to several thousand euros due to a lower interest rate over the term. The choice of a loan with a final installment can further optimize the monthly payments. This lays the foundation for a sustainably cheaper vehicle financing.
Expert Knowledge: The Revocation Joker as an Exit Option
A particularly effective method to terminate a leasing contract is the so-called cancellation joker. Many contracts concluded after 12 June 2014 contain faulty or unclear cancellation instructions. This means that the statutory cancellation period of 14 days never begins to run. As a result, you can often withdraw from the contract even years later. A successful cancellation leads to the reversal of the contract. You return the vehicle and receive a refund of all leasing instalments paid so far and any advance payments. In return, you only need to pay the lessor a usage compensation for the kilometres driven. Our expert tip: Definitely have your contract reviewed by a specialised lawyer in banking and capital markets law before taking any further steps. The cost of such a review is often only a few hundred euros, while the savings potential can run into thousands. This is the legally cleanest way to exit an expensive contract.
Step by Step: Implementing Debt Restructuring in Practice
Refinancing from leasing to a loan requires a systematic approach. By following the correct sequence, you secure the best terms. Carry out the following four steps:
Contract review and cost analysis: Examine your lease agreement for exit clauses and request a precise calculation of the payoff amount from your leasing provider.
Obtain loan offers: Compare the terms for a personal loan equal to the payoff amount on a non-binding basis. Use online comparison calculators for this purpose.
Calculate profitability: Compare the total costs of leasing (remaining installments plus final settlement) with the total costs of the new loan. Aim for a savings of at least five percent.
Complete the process: Finalise the new loan agreement and use the loan amount to terminate the leasing contract in a timely manner. The new bank often assists you in this process.
By following this procedure, you ensure that the loan refinancing with another bank proceeds smoothly. At the end of the process, you'll benefit from a lower monthly expense.
Conclusion: Financial freedom through a planned debt restructuring
Refinancing an expensive leasing contract into a loan is more than just a 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 over 20 percent on monthly payments are not uncommon. The process requires careful planning and comparing offers, but the gain in financial freedom justifies the effort. You exchange a financial shackle for an adaptable and often cheaper financing model. Request an individual risk analysis now: Have your insurance situation checked free of charge and receive concrete suggestions for optimisation.
More useful links
Wikipedia provides general information on the topic of leasing, including definitions and types.
The Verbraucherzentrale Bundesverband (vzbv) provides judgments on the right of withdrawal for leasing contracts with mileage accounting.
The Verbraucherzentrale Schleswig-Holstein offers information on debt restructuring and refinancing, which can also be applied to general financing questions.
The Deutsche Bundesbank provides statistics on interest rates and yields for consumer loans to private households.
The Statistische Bundesamt (Destatis) offers information on assets and debts in Germany.
The Caritas provides information and online counselling on debt advice.
The Bankenverband informs about creditworthiness and its assessment for consumers.
The Bundesgerichtshof (BGH) provides relevant judgments and documents which may be important for legal issues in the financial sector.
FAQ
How can I find out if my leasing contract is eligible for cancellation?
Check the completion date. If it is after 12 June 2014, the chances are good. For a legally sound assessment, you should have the contract reviewed by a consumer advice centre or a specialised lawyer.
Does debt restructuring improve my SCHUFA score?
Indirectly, yes. By consolidating multiple loans through restructuring, or replacing an expensive installment with a lower one, you improve your financial reliability. Successfully and punctually servicing the new loan has a positive effect on your score.
Can I 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 estimation.
What happens to my deposit during a debt restructuring?
The deposit is usually taken into account in the calculation of the redemption sum, as it has reduced the monthly installments. If the contract is successfully revoked, you can receive a full refund of the deposit.
How long does the entire refinancing process take?
The process can take between two and six weeks. The duration depends on how quickly the lessor communicates the redemption amount and how promptly the new bank processes and disburses the loan application.
What documents do I need for the debt restructuring?
You will need your full leasing contract, the settlement amount notification from the lessor, as well as the usual documents for a credit application: payslips from the last three months, bank statements, and a copy of your ID card.
