If you are thinking about returning a leased car early, you are very likely to face a substantial financial surcharge. In a vehicle lease contract (known in Spain as «renting»), it is common to find penalty clauses for situations in which the user of the vehicle unilaterally chooses to terminate the contract ahead of schedule.

These early cancellation penalty clauses are usually set out in the contract as a fixed percentage of the outstanding instalments. The question that arises with this type of charge is: are we dealing with an abusive clause? Does the penalty reflect the actual damage suffered by the leasing company?

How much does it cost to cancel a «renting» contract? The risk of penalties

Let’s bring this issue down to practice. Imagine a 60-month lease contract with a monthly instalment of €500. In month 12 of the contract (with 48 monthly instalments remaining), the lessee unilaterally terminates the contractual relationship.

The contract provides for a penalty of 50% of the instalments outstanding until the end of the contractual relationship. So in this specific case, the lessee and user of the vehicle could face a penalty of €24,000 (50% of the €500 monthly instalment, multiplied by the 48 remaining months) simply for terminating the lease contract early. All this assuming, of course, good faith on the user’s part and delivery of the vehicle without any objection. When facing claims of this magnitude for early termination, the defence of a contract breach lawyer in Madrid is essential to block the collection of disproportionate penalties.

When is the penalty for terminating a «renting» contract considered abusive?

The truth is that Spanish case law is not uniform on this point. To analyse each scenario and find out whether you can challenge an abusive car-lease penalty, you must look at fundamental factors such as:

1. Whether the lessee qualifies as a consumer.
2. Whether the penalty is disproportionately high compared to the actual hypothetical damage caused by the contract termination.

Case law in favour of the consumer (Private individuals)

If we look at Judgment of the Provincial Court of Málaga, Section 4, no. 708/2024, of 9 October, Appeal 1755/2023, which dealt with a 40% penalty on instalments outstanding until the end of the agreed contract term, the court concluded that:

«A disproportionately high penalty is imposed without showing that it bears any reasonable correspondence with the actual harm caused to the lessor by the lessee’s early termination of the contract».

Furthermore, given that the lessee in the dispute was a consumer, the same judgment states:

«This means payment of more than 14 instalments after the vehicle has been returned. But there is no evidence in the case file establishing, even approximately, the actual harm caused to the lessor […], which means that the compensation agreed in the contract must be considered disproportionately high for the consumer in relation to the damages and losses actually suffered by the drafting party, which remain unknown. In other words: for the penalty clause to respect the balance of obligations and pass the abusiveness test, it would have to modulate the breach, which it does not. That is ultimately what leads to considering clause two of the contract between the parties to be abusive».

In a similar vein, the Provincial Court of Barcelona, Section 4, in its judgment no. 465/2024 of 28 June, Appeal 109/2023, ruled the same way. In that case, the lessee returned the vehicle to the lessor early, and the company subsequently sold it to a third party within 26 days of delivery. The Provincial Court declared the clause abusive, as it imposed a disproportionately high penalty.

The Provincial Court of Madrid, Section 14, in its judgment no. 286/2025 of 25 September, Appeal 755/2024, also found the penalty clause in a lease contract abusive, because:

• The clause does not pass the incorporation and transparency controls required by Law 7/1998 of 13 April on general contracting conditions, or by the Spanish General Consumer Protection Act (TRLGDCU).
• The Court adds that, although providing for a penalty may be legitimate in the abstract, its validity is subject to it being proportionate and bearing a connection to the harm actually caused.

Also illustrative on this point is the Judgment of the Provincial Court of Madrid, Section 19, no. 188/2020, of 2 July, Appeal 147/2020. In that case, the lease contract did not specify the use of the vehicle (private or business), so the Provincial Court of Madrid presumed it fell within the concept of consumer, as established by the Court of Justice of the European Union, 4th Chamber, judgment of 3 September 2015. As a result, the Court found the penalty clause abusive and declared it null and void.

Lease cancellation for companies and self-employed professionals (Business cases)

The Provincial Court of Alicante, Section 9, in judgment no. 232/2013 of 6 May, Appeal 782/2012, ruled in the opposite direction.

In that case, the lessee terminated the lease contract early and did not qualify as a consumer. The Provincial Court of Alicante ruled that in general terms agreed between businesses there can be no abuse of a dominant position, so reducing the penalty was not appropriate. The same conclusion was reached in the Judgment of the Provincial Court of Murcia, Section 1, no. 22/2023 of 16 January, Appeal 313/2022, for a lease contract signed between professionals.

Conclusion: Requirements to void a «renting» cancellation penalty

Based on the above, the validity of a penalty clause in a «renting» contract in cases of unilateral early termination by the lessee will depend on three key factors:

1. Status of the user: Whether the lessee was acting as a consumer.
2. Transparency: Whether the clause in question passed the transparency control.
3. Proportionality: Whether the penalty clause reflects, in a justified way, the actual harm caused to the leasing company as a result of the early termination of the contract.