diff --git a/core/instance_actions.go b/core/instance_actions.go
index eba52643..a5bc4634 100644
--- a/core/instance_actions.go
+++ b/core/instance_actions.go
@@ -32,10 +32,13 @@ func (i *instance) handleInstanceStates() (bool, error) {
 	return false, nil
 }
 
-// returns an instance ID or error
 func (i *instance) launchSpotReplacement() (*string, error) {
+	return i.launchReplacement("spot")
+}
+
+func (i *instance) launchReplacement(replacementLifecycle string) (*string, error) {
 
-	ltData, err := i.createLaunchTemplateData()
+	ltData, err := i.createLaunchTemplateData(replacementLifecycle)
 
 	if err != nil {
 		log.Println("failed to create LaunchTemplate data,", err.Error())
@@ -61,7 +64,7 @@ func (i *instance) launchSpotReplacement() (*string, error) {
 		return nil, err
 	}
 
-	cfi := i.createFleetInput(lt, instanceTypes)
+	cfi := i.createFleetInput(lt, instanceTypes, replacementLifecycle)
 
 	resp, err := i.region.services.ec2.CreateFleet(cfi)
 
@@ -78,7 +81,8 @@ func (i *instance) swapWithGroupMember(asg *autoScalingGroup) (*instance, error)
 
 	odInstance, err := i.getSwapCandidate()
 	if err != nil {
-		log.Printf("Couldn't find suitable OnDemand swap candidate: %s", err.Error())
+		log.Printf("Couldn't find suitable OnDemand swap candidate, terminating Spot instance: %s", *i.InstanceId)
+		i.terminate()
 		return nil, err
 	}
 
@@ -95,7 +99,7 @@ func (i *instance) swapWithGroupMember(asg *autoScalingGroup) (*instance, error)
 		defer asg.setAutoScalingMaxSize(maxSize)
 	}
 
-	log.Printf("Attaching spot instance %s to the group %s",
+	log.Printf("Attaching %s instance %s to the group %s", *i.InstanceLifecycle,
 		*i.InstanceId, asg.name)
 	err = asg.attachSpotInstance(*i.InstanceId, true)
 
@@ -106,12 +110,12 @@ func (i *instance) swapWithGroupMember(asg *autoScalingGroup) (*instance, error)
 		return nil, fmt.Errorf("couldn't attach spot instance %s ", *i.InstanceId)
 	}
 
-	log.Printf("Terminating on-demand instance %s from the group %s",
+	log.Printf("Terminating instance %s from the group %s",
 		*odInstance.InstanceId, asg.name)
 	if err := asg.terminateInstanceInAutoScalingGroup(odInstance.Instance.InstanceId, true, true); err != nil {
-		log.Printf("On-demand instance %s couldn't be terminated, re-trying...",
+		log.Printf("instance %s couldn't be terminated, re-trying...",
 			*odInstance.InstanceId)
-		return nil, fmt.Errorf("couldn't terminate on-demand instance %s",
+		return nil, fmt.Errorf("couldn't terminate instance %s",
 			*odInstance.InstanceId)
 	}
 
@@ -121,23 +125,23 @@ func (i *instance) swapWithGroupMember(asg *autoScalingGroup) (*instance, error)
 func (i *instance) getSwapCandidate() (*instance, error) {
 	odInstanceID := i.getReplacementTargetInstanceID()
 	if odInstanceID == nil {
-		log.Println("Couldn't find target on-demand instance of", *i.InstanceId)
+		log.Println("Couldn't find target instance of", *i.InstanceId)
 		return nil, fmt.Errorf("couldn't find target instance for %s", *i.InstanceId)
 	}
 
 	if err := i.region.scanInstance(odInstanceID); err != nil {
-		log.Printf("Couldn't describe the target on-demand instance %s", *odInstanceID)
+		log.Printf("Couldn't describe the target instance %s", *odInstanceID)
 		return nil, fmt.Errorf("target instance %s couldn't be described", *odInstanceID)
 	}
 
 	odInstance := i.region.instances.get(*odInstanceID)
 	if odInstance == nil {
-		log.Printf("Target on-demand instance %s couldn't be found", *odInstanceID)
+		log.Printf("Target instance %s couldn't be found", *odInstanceID)
 		return nil, fmt.Errorf("target instance %s is missing", *odInstanceID)
 	}
 
 	if !odInstance.shouldBeReplacedWithSpot() {
-		log.Printf("Target on-demand instance %s shouldn't be replaced", *odInstanceID)
+		log.Printf("Target instance %s shouldn't be replaced", *odInstanceID)
 		i.terminate()
 		return nil, fmt.Errorf("target instance %s should not be replaced with spot",
 			*odInstanceID)
diff --git a/core/instance_conversion.go b/core/instance_conversion.go
index 190701ba..832cdb95 100644
--- a/core/instance_conversion.go
+++ b/core/instance_conversion.go
@@ -403,8 +403,13 @@ func (i *instance) processImageBlockDevices(rii *ec2.RequestLaunchTemplateData)
 	rii.BlockDeviceMappings = i.convertImageBlockDeviceMappings(resp.Images[0].BlockDeviceMappings)
 }
 
-func (i *instance) createLaunchTemplateData() (*ec2.RequestLaunchTemplateData, error) {
-	i.price = i.typeInfo.pricing.onDemand * i.asg.config.OnDemandPriceMultiplier
+func (i *instance) createLaunchTemplateData(instanceLifecycle string) (*ec2.RequestLaunchTemplateData, error) {
+	odPrice := i.typeInfo.pricing.onDemand
+	mp := 1.0
+	if i.asg != nil && i.asg.config.OnDemandPriceMultiplier != 0 {
+		mp = i.asg.config.OnDemandPriceMultiplier
+	}
+	i.price = odPrice * mp
 
 	placement := ec2.LaunchTemplatePlacementRequest(*i.Placement)
 
@@ -430,11 +435,14 @@ func (i *instance) createLaunchTemplateData() (*ec2.RequestLaunchTemplateData, e
 
 	ltData.EbsOptimized = i.EbsOptimized
 
-	ltData.InstanceMarketOptions = &ec2.LaunchTemplateInstanceMarketOptionsRequest{
-		MarketType: aws.String(Spot),
-		SpotOptions: &ec2.LaunchTemplateSpotMarketOptionsRequest{
-			MaxPrice: aws.String(strconv.FormatFloat(i.price, 'g', 10, 64)),
-		},
+	if instanceLifecycle == "spot" {
+
+		ltData.InstanceMarketOptions = &ec2.LaunchTemplateInstanceMarketOptionsRequest{
+			MarketType: aws.String(Spot),
+			SpotOptions: &ec2.LaunchTemplateSpotMarketOptionsRequest{
+				MaxPrice: aws.String(strconv.FormatFloat(i.price, 'g', 10, 64)),
+			},
+		}
 	}
 
 	ltData.Placement = &placement
@@ -467,7 +475,7 @@ func (i *instance) createFleetLaunchTemplate(ltData *ec2.RequestLaunchTemplateDa
 	return &ltName, err
 }
 
-func (i *instance) createFleetInput(ltName *string, instanceTypes []*string) *ec2.CreateFleetInput {
+func (i *instance) createFleetInput(ltName *string, instanceTypes []*string, lifeCycle string) *ec2.CreateFleetInput {
 
 	var overrides []*ec2.FleetLaunchTemplateOverridesRequest
 
@@ -494,6 +502,9 @@ func (i *instance) createFleetInput(ltName *string, instanceTypes []*string) *ec
 		SpotOptions: &ec2.SpotOptionsRequest{
 			AllocationStrategy: aws.String(i.asg.config.SpotAllocationStrategy),
 		},
+		OnDemandOptions: &ec2.OnDemandOptionsRequest{
+			AllocationStrategy: aws.String("prioritized"),
+		},
 		Type: aws.String("instant"),
 		TargetCapacitySpecification: &ec2.TargetCapacitySpecificationRequest{
 			SpotTargetCapacity:        aws.Int64(1),
@@ -501,6 +512,12 @@ func (i *instance) createFleetInput(ltName *string, instanceTypes []*string) *ec
 			DefaultTargetCapacityType: aws.String("spot"),
 		},
 	}
+	if lifeCycle != "spot" {
+		log.Printf("Overriding default capacity type to ondemand\n")
+		retval.TargetCapacitySpecification.DefaultTargetCapacityType = aws.String("on-demand")
+		retval.TargetCapacitySpecification.SpotTargetCapacity = aws.Int64(0)
+		retval.TargetCapacitySpecification.OnDemandTargetCapacity = aws.Int64(1)
+	}
 	return retval
 }
 
diff --git a/core/instance_conversion_test.go b/core/instance_conversion_test.go
index b712e8e2..f176af64 100644
--- a/core/instance_conversion_test.go
+++ b/core/instance_conversion_test.go
@@ -1053,7 +1053,7 @@ func Test_instance_createLaunchTemplateData(t *testing.T) {
 	for _, tt := range tests {
 		t.Run(tt.name, func(t *testing.T) {
 
-			got, _ := tt.inst.createLaunchTemplateData()
+			got, _ := tt.inst.createLaunchTemplateData("spot")
 
 			// make sure the lists of tags are sorted, otherwise the comparison fails
 			sort.Slice(got.TagSpecifications[0].Tags, func(i, j int) bool {
@@ -1586,6 +1586,9 @@ func Test_instance_createFleetInput(t *testing.T) {
 						},
 					},
 				},
+				OnDemandOptions: &ec2.OnDemandOptionsRequest{
+					AllocationStrategy: aws.String("prioritized"),
+				},
 				SpotOptions: &ec2.SpotOptionsRequest{
 					AllocationStrategy: aws.String("capacity-optimized-prioritized"),
 				},
@@ -1634,6 +1637,9 @@ func Test_instance_createFleetInput(t *testing.T) {
 						},
 					},
 				},
+				OnDemandOptions: &ec2.OnDemandOptionsRequest{
+					AllocationStrategy: aws.String("prioritized"),
+				},
 				SpotOptions: &ec2.SpotOptionsRequest{
 					AllocationStrategy: aws.String("capacity-optimized"),
 				},
@@ -1650,7 +1656,7 @@ func Test_instance_createFleetInput(t *testing.T) {
 	for _, tt := range tests {
 		t.Run(tt.name, func(t *testing.T) {
 
-			got := tt.i.createFleetInput(tt.ltName, tt.instanceTypes)
+			got := tt.i.createFleetInput(tt.ltName, tt.instanceTypes, "spot")
 
 			if !reflect.DeepEqual(got, tt.want) {
 				t.Errorf("instance.createFleetInput() = %v, want %v", got, tt.want)
diff --git a/core/instance_queries.go b/core/instance_queries.go
index 73db257c..033921c1 100644
--- a/core/instance_queries.go
+++ b/core/instance_queries.go
@@ -97,8 +97,7 @@ func (i *instance) canTerminate() bool {
 func (i *instance) shouldBeReplacedWithSpot() bool {
 	protT, _ := i.isProtectedFromTermination()
 	return i.belongsToEnabledASG() &&
-		i.asgNeedsReplacement() &&
-		!i.isSpot() &&
+		(i.isSpot() || i.asgNeedsReplacement()) &&
 		!i.isProtectedFromScaleIn() &&
 		!protT
 }
@@ -121,7 +120,7 @@ func (i *instance) belongsToEnabledASG() bool {
 			asg.loadLaunchTemplate()
 			i.asg = &asg
 			i.price = i.typeInfo.pricing.onDemand / i.region.conf.OnDemandPriceMultiplier * i.asg.config.OnDemandPriceMultiplier
-			log.Printf("%s instace %s belongs to enabled ASG %s", i.region.name,
+			log.Printf("%s instance %s belongs to enabled ASG %s", i.region.name,
 				*i.InstanceId, i.asg.name)
 			return true
 		}
diff --git a/core/main.go b/core/main.go
index 9fd33970..d51d7bac 100644
--- a/core/main.go
+++ b/core/main.go
@@ -260,7 +260,15 @@ func (a *AutoSpotting) processEventInstance(eventType string, region string, ins
 		spotTermination := newSpotTermination(region)
 
 		if spotTermination.IsInAutoSpottingASG(instanceID, a.config.TagFilteringMode, a.config.FilterByTags) {
-			err := spotTermination.executeAction(instanceID, a.config.TerminationNotificationAction, eventType)
+			newInstance, err := a.replaceTerminatingSpotInstance(*instanceID, region)
+			if err == nil {
+				log.Printf("Launched replacement instance for instance %s: %s\n", *instanceID, *newInstance)
+				return nil
+			}
+
+			log.Printf("Error launching replacement instance for instance %s: %s, continued to handle its Spot termination\n", *instanceID, err.Error())
+
+			err = spotTermination.executeAction(instanceID, a.config.TerminationNotificationAction, eventType)
 			if err != nil {
 				log.Printf("Error executing spot termination/rebalance action: %s\n", err.Error())
 				return err
@@ -438,10 +446,13 @@ func (a *AutoSpotting) handleNewInstanceLaunch(regionName string, instanceID str
 	}
 
 	// Try OnDemand
-	if err := a.handleNewOnDemandInstanceLaunch(r, i); err != nil {
+	if err := a.handleNewOnDemandInstanceLaunch(r, i); !i.isSpot() && err != nil {
+		log.Printf("%s Instance %s couldn't be handled as on-demand instance", i.region.name, *i.InstanceId)
 		return err
 	}
 
+	log.Printf("%s Instance %s couldn't be handled as on-demand instance", i.region.name, *i.InstanceId)
+
 	// Try Spot
 	// in case we're not triggered by SQS event we do nothing, onDemand event already manage launched spot instance
 	if len(a.config.sqsReceiptHandle) > 0 {
@@ -511,9 +522,9 @@ func (a *AutoSpotting) handleNewOnDemandInstanceLaunch(r *region, i *instance) e
 		}
 
 	} else {
-		log.Printf("%s skipping instance %s: either doesn't belong to an "+
+		log.Printf("%s skipping %s instance %s: either doesn't belong to an "+
 			"enabled ASG or should not be replaced with spot, ",
-			i.region.name, *i.InstanceId)
+			i.region.name, *i.InstanceLifecycle, *i.InstanceId)
 		debug.Printf("%#v", i)
 	}
 	return nil
@@ -551,3 +562,77 @@ func (a *AutoSpotting) handleNewSpotInstanceLaunch(r *region, i *instance) error
 	}
 	return nil
 }
+
+func (a *AutoSpotting) replaceTerminatingSpotInstance(instanceID, regionName string) (*string, error) {
+	r := &region{name: regionName, conf: a.config, services: connections{}}
+
+	if !r.enabled() {
+		return nil, fmt.Errorf("region %s is not enabled", regionName)
+	}
+
+	r.services.connect(regionName, a.config.MainRegion)
+	r.setupAsgFilters()
+	r.scanForEnabledAutoScalingGroups()
+
+	log.Println("Scanning full instance information in", r.name)
+	r.determineInstanceTypeInformation(r.conf)
+
+	if err := r.scanInstance(aws.String(instanceID)); err != nil {
+		log.Printf("%s Couldn't scan instance %s: %s", regionName,
+			instanceID, err.Error())
+		return nil, err
+	}
+
+	i := r.instances.get(instanceID)
+	if i == nil {
+		log.Printf("%s Instance %s is missing, skipping...",
+			regionName, instanceID)
+		return nil, errors.New("instance missing")
+	}
+	log.Printf("%s Found instance %s in state %s",
+		i.region.name, *i.InstanceId, *i.State.Name)
+
+	if *i.State.Name != "running" {
+		log.Printf("%s Instance %s is not in the running state",
+			i.region.name, *i.InstanceId)
+		return nil, errors.New("instance not in running state")
+	}
+
+	asgName := i.getReplacementTargetASGName()
+
+	if asgName == nil {
+		log.Printf("Missing the ASG name tag\n")
+		return nil, errors.New("missing ASG name tag")
+	}
+
+	i.asg = i.region.findEnabledASGByName(*asgName)
+	i.asg.scanInstances()
+	i.asg.loadDefaultConfig()
+	i.asg.loadConfigFromTags()
+	i.asg.loadLaunchConfiguration()
+	i.asg.loadLaunchTemplate()
+
+	newInstanceID, err := i.launchSpotReplacement()
+	if err != nil {
+		fmt.Printf("Spot Instance launch failed while replacing %s, error: %s, falling back to on-demand\n", *i.InstanceId, err.Error())
+
+		newInstanceID, err = i.launchReplacement("on-demand")
+		if err != nil {
+			fmt.Printf("Instance launch failed while replacing %s, error: %s\n", *i.InstanceId, err.Error())
+			return nil, err
+		}
+	}
+
+	i.region.scanInstances()
+	newInstance := i.region.instances.get(*newInstanceID)
+
+	newInstance.swapWithGroupMember(i.asg)
+
+	if err = i.asg.waitForInstanceStatus(newInstanceID, "InService", 5); err != nil {
+		log.Printf("Instance %s is still not InService, trying to terminate it.",
+			*newInstanceID)
+		newInstance.terminate()
+	}
+
+	return newInstanceID, nil
+}