The major difference between leased and financed vehicles with regard to early termination of the contract is that leased vehicles carry a penalty for early termination and financed vehicles almost universally have no prepayment penalty in the contract. There are some financing companies that do still impose early termination fees, so that needs to be scrutinized at time of purchase.The number of payments remaining, and/or the number of payments already made on the lease might also factor in when the insurance company assesses as value of the car. The details of what and how much you must pay should be itemized in your lease contract.The insurance company will assess the payout at u201cmarket valueu201d and compensate the leasing company directly. Same thing with a financed car. In many cases, the market value at time of accident is not enough to totally repay the loan or lease and if a gap policy was not purchased the owner is responsible to also pay off the remaining amount.This is all rather vague, with reason. If you total a car on day one of a lease or loan you will owe far more money in either instance than if you total the car on day 1000 of a 3-year lease. Even a 5-year loan, at day 1000, might find you owing for that differentialu2026just (usually) not a prepayment penalty that you are also going to be assessed with a lease.