A termination fee is the amount lessees must pay at the end of a closed-end lease if they choose not to pay the residual value and buy the car.
This fee can include administrative charges, any penalties, the dealer’s cost to prepare the car for resale and other charges, real or imagined. Make sure this is stated clearly in the contract, and is agreeable. At termination, you are in no position to negotiate, and the lessor can apply your security deposit toward this fee.
Information for this was taken from the Cars.com’s glossary, written by Joe Wiesenfelder.
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