Can I prepay my lease contract?

We’ve been in the business a long time here at OSV, and we have been asked a number of questions throughout our 20 year history. And, one of the questions we get asked every now and then is ‘can I prepay my car lease?’

In this article we cover what prepaying involves, whether you can prepay, and what to do if you can’t.

Prepay essentially means to pay before a certain date.

In the context of leasing, this could mean one of two things;


  • Paying at the start of the month
  • Paying your lease contract all in one go at the start

What does prepay mean?

So for example, if you have a car in January and you pay on the 1st, alternatively, you have a contract that amounts to you paying £10,000 over two years, and you want to pay the whole £10k at the start.

what are the ways I can pay for my initial payment?

Can I prepay my lease contract?

If you want to pay on the 1st of every month then go for it, there’s no reason why you can’t.

However, you cannot pay for your entire lease in  advance. Sorry.

Why can’t I prepay my car lease?

Can I Prepay my Lease Contract?

Essentially because the finance company has no way of tracking you. Not in a Big Brother-esque way, don’t worry. But, you don’t own the car, the finance house does. The finance house insists you pay monthly as you are far more likely not to have stolen the car. Imagine you are a fraudster, it would be far too easy to pay £15,000 for a £50,000 car and then take the car abroad, never to be seen again. The first time the finance house will know about this will be three years later when you aren’t there to collect it.

So, that’s pretty much why, because the finance house don’t want you to disappear with their car. Which is fair enough, really.

Alternatives to prepaying your lease contract

You might be wondering ‘but I have the money already, why can’t I just pay it now instead of it coming out once a month’ and we’ve established why, but we understand that you might be looking at an alternative.

If you wanted to keep your monthlies as low as possible, you can put down a larger deposit. This means that you are paying most of it off, without actually prepaying.

Can I defer my lease payments?

So you can’t prepay your lease payments, can you defer them if you need to during unexpected circumstances?

The answer is; it depends.

You have to have a special agreement with your finance house, some finance houses will allow this but some won’t. So we can’t actually give a definitive answer, you’ll have to discuss it with your finance house.

Can I Prepay my Lease Contract?

A lease contract  isn’t like a mortgage where you can take a payment holiday, you really have to commit to those monthly payments. If you don’t or you can’t, then you risk a late payment on your credit file.

So no, you cannot prepay your car lease if it means paying it all in one go. This is because you don’t own the car, the finance house needs to know that you aren’t going to run away with it. Which we think is a fair enough reason. You can, however, put a significant amount down as a deposit in order to make your monthly payments as low as possible.

how to lower lease price
ultimate leasing guide
Rachel Richardson
  • 21st November 2016


  • Anonymous| 3rd October 2019 at 11:16 am Reply

    Please also inform your reader that if you put large initial rental, in case of total loss it won’t be refunded!

    • Rachel Richardson| 3rd October 2019 at 3:37 pm Reply

      Hi Anonymous,

      Thank you for your comment. There are various products sold by insurance companies which will cover situations such as this. Due to areas around compliance they are not products we are able to talk about, however, they are available if you ask. If you are in this situation, or fear you will be, seek advice from an independent insurance broker.

      Of course, the situation in the US may well be different from the UK where these products are available.

    Leave comments

    Your email address will not be published.*

    You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Back to top