I have a large automotive lease on an electric vehicle, and some extra cash. Of the investments and debts I have it's currently at the highest rate (5.5%), Does making early or larger payments reduce my monthly payment on a typical lease, or just shorten the period before the lease expires?

  • 3
    What does your contract say? Mine i.e. mean the leasing company would reduce my overpayment by some processing fee - and send the rest back as overpayment. Instead of asking, read the paperwork that you signed and we have no idea what it says because you do not even tell us ;)
    – TomTom
    Feb 27, 2019 at 9:28

1 Answer 1


Some banks allow you to choose the outcome: shorten the term or lower the payments.

Also, some companies state in their contracts, that making early payments will cost you. So read the fine print about it.

Basically it depends on your provider/bank/financial company.

  • In the case where they shorten the terms, will that probably mean that the value they believe the car should have at the end of the shortened lease will be too high (because they were guessing based on the car being older and with more mileage at term?)
    – BadPirate
    Feb 27, 2019 at 22:11
  • Strictly speaking – yes, in that case the car would depreciate less, therefore its value at that time would be higher. Why do you ask?
    – Julius Š.
    Feb 28, 2019 at 7:09
  • As I see it, one of the advantages of the lease is de-valuation insurance. Dealer makes a conservative bet when they choose the value they'll buy the car back for, and if they are wrong you profit by getting out from under the car for less than if you had bought and then sold it. Shortening your lease means that you lose some opportunity here as it's more likely the better option will be to buy the car and sell it on your own then accept the too low value they will have for it at that time.
    – BadPirate
    Mar 1, 2019 at 17:36

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