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how to get out of a car lease

How To Get Out Of A Car Lease

There are a few reasons why you might be interested in learning how to get out of a car lease, and because most of them require you to act quickly, let’s just dive into your options.

The article I created below will cover everything you need to know about early lease termination, including pros and cons, fees, alternatives, and tips to save money.

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Can You Get Out of a Car Lease Early?

Yes, most car lease contracts allow lessees to exit the agreement early by either:

  • Returning the car to the dealer and paying an early termination fee
  • Finding someone to take over the remaining lease payments (lease transfer)
  • Paying off the full lease balance and keeping the car (lease buyout)

However, breaking your lease agreement does often lead to high out-of-pocket costs.

So before deciding to end your car lease early, carefully consider the penalties and financial implications.

What is an Early Termination Fee?

The early termination fee is typically the most expensive lease break option, with costs often reaching thousands of dollars.

This fee is designed to cover the dealer’s losses from you ending the lease prematurely.

According to the Federal Consumer Leasing Act, car dealers must disclose:

  • The formula or method they use to calculate early termination fees
  • An estimate of the maximum potential fee amount

So be sure to thoroughly review your lease agreement to understand the early termination provisions and estimated expenses before proceeding.

Below is an overview of common penalties and costs you may face for returning your leased car early:

Fee TypeDescription
Early Termination FeeFlat fee charged to end lease early, often $300-$500
Remaining Monthly PaymentsCharges for excess mileage, dings/dents, stains, etc.
Excess Wear & UseCharges for excess mileage, dings/dents, stains etc.
Taxes & Registration FeesProrated taxes and DMV registration fees
Disposition FeeCleaning/reconditioning fee to ready car for resale, typically $300-$400

4 Alternatives to Breaking Your Lease Early

If you can’t afford or want to avoid paying substantial lease break fees, here are four alternatives to consider:

1. Transfer the Lease

Also called a lease takeover or lease swap, this option involves finding someone else to assume responsibility for the car and remaining lease payments. Pros of this route include:

  • Often the lowest-cost way to exit a lease early
  • Fully transfers liability to new lessee
  • Available from many dealers and leasing companies

However, you will likely need to pay a lease transfer fee, typically $100-$500. And certain eligibility requirements must be met for lease assumption candidates.

Best Lease Transfer Websites:

  • – One of the largest online marketplaces for lease transfers with over 1 million visitors per month. They connect leaseholders and interested buyers/transferees. The site is free to list a lease and search listings.
  • – Another major online lease marketplace helping facilitate lease assumptions and transfers since 1999. They thoroughly research leasing companies’ transfer policies and have a large database of lease deals. Listing a lease and searching is free.
  • – An online platform focused on auto lease transfers and takeovers. They promise quick selling/finding of leases with genuine, qualified buyers and no sign-up costs to list a lease.

2. Buy Out the Lease

Every lease includes an option to purchase the car, known as a lease buyout. Buying out your lease early then reselling the car yourself can make financial sense if:

  • The car’s residual value is less than its real market value
  • You can find a private buyer willing to pay more than your buyout cost

But you must have the cash or get approved for an auto loan to cover the buyout payment. This includes any remaining monthly payments owed and purchase option costs.

3. Trade In the Vehicle

Trading in your leased vehicle when buying or leasing another car from the same dealer is convenient. But it can be expensive:

  • The dealer’s trade-in allowance may be far less than what you owe
  • Rolled-in negative equity increases new car payments
  • An early termination fee still applies in most cases

On the plus side, some dealers incentivize lease trade-ins by covering termination fees or registration costs.

4. Lower the Monthly Payment

If you’re facing temporary financial hardship and can’t afford your payment, ask the leasing company about hardship assistance programs. Many will let you:

  • Temporarily reduce your monthly payment
  • Defer payments for 1-2 months in special cases
  • Extend overall lease term to lower payment

You still must eventually pay the full lease balance. But it beats damaged credit or repossession.

Tips for Ending a Car Lease Early

If you’ve weighed the pros and cons and decided to break your auto lease agreement, here are some tips to save money:

  • Carefully document any interior stains, scratches etc. and get them repaired before returning the car. This minimizes excessive wear charges.
  • Consider waiting a few extra months if your car’s value is currently less than the lease buyout price. Its value may rise over the next year to where selling it could be profitable.
  • Give the car a deep clean before listing it for sale or turning it in. Clean vehicles tend to sell faster and for higher prices.
  • Ask the dealer about waiver or reduction of any termination or disposition fees due to special circumstances like military orders or out-of-state moves.

My Final Thoughts

The option you choose for ending your car lease early depends on your situation. But in most cases, avoiding default or repossession while minimizing out-of-pocket expenses is the best financial decision.

Sources For This Article:

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Steve Momot - Author

Steve Momot - Author

Steve, a seasoned expert in the automotive industry, formerly held a car dealer license in Florida. With extensive experience spanning across car trading and mechanical work, he founded Autohitch. His mission? To guide both buyers and sellers through the intricate maze of car purchasing, ensuring a seamless and informed experience. Outside of the automotive world, Steve has a passion for fishing and capturing the beauty of nature through photography.


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