What Happens at the End of a Car Lease

What Happens at the End of a Car Lease

When your car lease comes to an end, you are faced with several options.

Each option has its own set of benefits and potential drawbacks, and it’s important to understand them fully to make an informed decision.

This article will guide you through these options and provide you with the necessary information to navigate the end of your car lease.

1. Returning the Car

The most straightforward option at the end of a car lease is to return the vehicle to the dealership or leasing company.

This is typically what happens when the term or duration of the lease period ends. However, it’s important to note that you may be liable for any unpaid violations associated with the state registration.

Additionally, you will need to pay a disposition fee upon termination, which is usually around $400. This fee covers the cost of preparing the car for resale and is generally non-negotiable.

However, it’s always worth asking if this fee can be waived, especially if you plan on leasing another vehicle from the same company.

2. Lease Buyout

If you’ve grown attached to your leased car, a lease buyout might be the right option for you. This involves buying the car at the end of the lease and keeping it.

The price of the buyout is usually determined at the beginning of the lease agreement and is known as the residual value.

Before deciding on a lease buyout, it’s a good idea to compare the residual value of the car to its current market value. If the residual value is significantly lower than the market value, a lease buyout could be a great deal.

3. Buying and Reselling the Car

If you’re looking to make a profit, you could consider buying the car at its residual value and then reselling it. This option requires a good understanding of the car market to ensure you can sell the car at a higher price than you bought it for.

Keep in mind that this option involves more work and risk than simply returning the car or buying it for personal use. You’ll need to find a buyer and handle the sale process, which can take time and effort.

4. Transferring the Lease

If you want to get out of your lease early, you might be able to transfer the lease to another person. The new lessee will then take over the remaining payments. This can be a good option if your circumstances have changed and you no longer need or want the car.

However, not all leasing companies allow lease transfers and those that do often charge a transfer fee. Additionally, the person taking over the lease will need to qualify based on their credit.

5. Trade-In

Another option at the end of a car lease is to trade in the leased car for a new one. This can be a good option if you want to upgrade to a newer model.

In this case, the dealership will appraise the value of your leased car and apply it towards the lease or purchase of a new vehicle. If your leased car is worth more than the remaining balance on the lease, you might even have some equity that you can apply toward your new lease or purchase.

6. Can You Extend A Car Lease?

Yes, if you need more time to find another vehicle or if you want to keep your current leased vehicle for a longer period of time, you could consider extending the lease.

Most lenders will cap the extension at 12 months.

A lease extension can provide some flexibility if you’re not ready to make a decision right away. However, it’s important to review the terms of the lease extension, including any fees or penalties that may be associated with it.

Do You Ever Get Money Back at the End of a Car Lease?

Typically, you do not get money back at the end of a car lease.

When you lease a car, you’re essentially paying for the depreciation of the vehicle over the lease term, plus any additional fees and interest.

At the end of the lease, you can return the car to the dealership or leasing company, but you won’t receive any money back.

However, there is one scenario where you might be able to get some money back: if the car is worth more at the end of the lease than the residual value stated in your lease agreement. This could happen if the car has depreciated less than expected. In this case, you could buy the car at its residual value and then sell it at its higher market value, thereby making a profit.

Keep in mind that this scenario is relatively rare and depends on market conditions. It’s also important to note that selling a car can involve time and effort, as you’ll need to find a buyer and handle the sale process.


In conclusion, the end of a car lease presents several options for the lessee. Whether you choose to return the car, buy it out, resell it, transfer the lease, trade it in, or extend the lease, each option has its own set of considerations. It’s important to understand these options and make an informed decision that best suits your needs and financial situation.

Remember to review all the terms of your lease agreement and consider any associated fees or penalties before making a decision. And don’t hesitate to negotiate with your leasing company or dealership, as you might be able to save money or get more favorable terms.

Navigating the end of a car lease can be a complex process, but with the right information and careful consideration, you can make the choice that’s right for you.

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Steve is a former licensed car dealer located in the State of Florida.  He has many years of experience buying, selling, and working on cars mechanically and started Autohitch to help buyers and Sellers navigate the complex lands of Car Buying.