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End Your Car Lease Early: Sell, Swap or Buy

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You’re hardly driving anymore. But how do you turn in your leased car without losing a small fortune?

Because of the pandemic and the sagging economy, many people are asking this same question. The good news is that the once-rigid leasing process has become a bit more flexible thanks to new online information and resources. Before you decide which option to use, review your lease contract and collect this information:

Your monthly payment.

How many months are remaining in the lease.

The amount of additional lease-end fees.

The residual value — the cost to buy your vehicle at the end of the lease.

The total of lease-end fees and remaining monthly payments is a good estimate of what you would have to pay to terminate your lease early and walk away from your leased car. Better yet, call your leasing company to ask about both the cost of an early lease termination and the price of buying out the lease altogether.

You could simply turn in the car and write a check. Or, you could figure out what your car is worth on the open market.

Compare your buyout price to the current market value of your car on an online pricing guide such as TrueCar, Edmunds or Kelley Blue Book, or by getting a real cash offer from online car buyers like Carvana, Shift or Vroom, or your local CarMax.

If you’re lucky, your car might be worth the same or more than the buyout price of the lease. If it isn’t, you’ll have to find a way to make up the difference.

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Option 1: Sell your car to a dealer

This is the fastest and easiest way to step out of a lease agreement. And, because the pandemic has created a shortage of used cars, your car might be worth more than you expect. TrueCar’s Alain Nana-Sinkam, vice president of strategic initiatives, calls this “the happy path” because you can just hand over the keys and walk away with no further financial obligation.

Pickups and SUVs are in high demand now, in part because of low gas prices, and might fetch a higher price from a dealer. The value and desirability of sedans and other vehicle types will depend on the popularity and availability of those brands.

You’ll get your best price from a dealership selling the same brand of car you’re looking to unload, advises Nana-Sinkam. So take your Honda to a Honda dealership for the best price, along with your previous research on your car’s value as a gauge.

However, if your residual value was low and your payments high, you might still be on the hook for a lot of money. You may have to tap your savings. Or you might want to explore other options.

Option 2: Swap your lease

Most lease contracts allow you to transfer the remainder of the lease period to another person, says Scot Hall, executive vice president of Swapalease, a lease-trading site . Swapalease and its competitor, LeaseTrader, help you find someone who needs a car and can assume the remaining payments.

“We’re like a dating service for car leases,” Hall says. “Our primary goal is to match up a person who wants out with a person who wants to take over.”

For a fee starting between $75 and $100, you can post the terms of your vehicle’s lease on these sites. As part of the deal, experts from these sites make sure the paperwork is completed accurately. But before you take this route, be sure to check your lease contract to see if it allows transfer to another party.

In addition, you may have to put up some cash of your own to make your offer more attractive to shoppers looking to take over a lease. Not all leases on offer have incentives, but many do, in amounts from a month or two of payments to several thousand dollars for high-end models with whopper payments. Would you spend $500 to avoid making two years of $500 payments? Would you spend $1,000?

Another way to transfer your lease is to simply ask a family member or a trusted friend to take over the monthly payments. Make sure auto insurance still covers the vehicle, and have a clear understanding of who will pay for any excess wear and tear at the end of the lease.

Option 3: Buy your car, sell it yourself

Compare lease buyout options.

Most lease contracts allow you to buy your car at any time during the leasing period for a predetermined amount — that early buyout price. You can either purchase the car with ready cash or take out a loan to cover the expense.

Many auto refinancing lenders offer lease buyout loan s; some will lend amounts greater than the car’s book value.

Selling your car to a private party will bring a higher price than the trade-in or purchase figure from a dealer. However, it will require time and some money for advertising to find a buyer.

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Option 4: Buy your car and keep it

Maybe you would like to keep your leased car if only your monthly payment were lower. In this case, you can use a lease buyout loan as well. The downside is that you would be extending your financial commitment to lower your payments.

Your leasing company may offer lease buyout financing, but if not, many auto refinancing lenders do as well. Some will loan you more than the car is worth, if your buyout price is higher.

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There are essential steps if you’re considering turning in a leased car early for another lease. Taking the correct approach will maximize the value of your current vehicle and help with a deal on the next one. Otherwise, failing to research and not having all the facts will cost you. Read on for what to know about turning in a leased car early for another lease.

Why Are You Exiting A Car Lease?

Before doing anything else, determine your reason for wanting out of the existing lease. It’s important to note that you’ve made a legal commitment to lease the car for a set period, and you may be subject to penalties for early termination. 

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Need For A Different Car

Sometimes needs or family situations change. For example, that sleek two-seat sports car won’t be able to handle a child’s car seat. Or, that gas-guzzling truck could get expensive if you suddenly find yourself with a much longer commute. Still, you may no longer like the current vehicle and want a new ride. In other words, do you NEED a different car or merely WANT a new one? And, are you willing to pay more for the privilege of exiting a lease?

Special Manufacturer Incentive

As you near the end of a lease’s term, most manufacturers will offer special incentives that allow you to exit the current lease and sign up for a new one with a different car. Called a “pull-ahead” program, this may come in a marketing mailer or an offering by the dealer. Typically, this incentive kicks in when three to six months remain in the lease; the leasing company will waive the remaining monthly payments and end-of-lease fees. However, just because the manufacturer makes it easy for you, don’t automatically accept this offer without doing homework.

Excessive Mileage

If you’ve racked up lease miles beyond what’s agreed to in the contract, you will likely be hit with excessive mileage charges. Switching leases may be a savvy way out of this debacle.  

Is My Leased Car Worth Anything?

Surprisingly, your leased car may have some hidden value (equity), which you’ll need to determine before shopping for a new lease. Review the lease contract or contact the leasing company for this information. You’ll want to confirm the buyout price for your car. The buyout amount is usually the residual value (the agreed-upon amount that your vehicle is worth at the end of the lease) plus any remaining monthly payment and lease termination fees.

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So you’re in the market for a used vehicle?  We’ve gone ahead and prepped some essential questions to ask when buying a used car .

Next, you’ll want to find out what the market value of your car is. The good news is that this is very easy to determine these days. Numerous online sites allow you to enter the car’s vehicle identification number (VIN) or license plate and a purchase offer pops up almost instantly. Importantly, get multiple quotes as each company may have different preferences for the cars it buys.

Understanding Equity

If the purchase offer is higher than the buyout price, you have positive equity and can use this amount towards your next car. For example, if the lease buyout price for a 2018 Toyota Camry is $18,000 and you’ve received an offer to buy the car for $21,000, you have $3,000 in positive equity. 

Knowing where you stand with the car’s equity is a critical first step before shopping for a new car lease. If the best offer is lower than the buyout price, you’re in a negative equity situation, sometimes called “being upside” on a car. If you’re turning in a leased car early for another lease, you may have to fork over the negative equity amount. 

Dealing with the Dealer

It may be difficult, but ideally, you should shop for your next car lease without calculating the lease trade-in into the equation. This way, you can focus on getting the best deal for your next car. Once the numbers are hammered out on the next lease, see how turning in the vehicle early changes things. If you received a favorable online buyout offer, ask the dealer to match or beat it. If you’re potentially upside down, keep that information to yourself and see what the dealer can do. 

Notably, most pull-ahead offers are only available if you keep car leases of the same brand. For instance, Toyota won’t have an incentive program if you seek to trade in your Ford lease for a new Toyota lease. That doesn’t mean the Toyota dealer (or another brand’s dealer) won’t work with you. On the contrary, they would be eager to put you in a new car. But, the absence of a manufacturer’s subsidy means pricing for the new lease may be less than ideal. 

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Recent Changes To Lease Buyouts

The disruption to the automotive industry caused by the pandemic and shortages of critical components has prompted some manufacturers to change their policies on lease buyouts. Supplies of new cars are limited, and dealers are anxious to put as many vehicles on their lots as possible, including late-model, off-lease vehicles.  

As a result, some brands will no longer work with third-party purchasers (like Carvana or CarMax) to facilitate the buyout of a lease. Honda is one example. So, if you lease a car through American Honda Finance, you can only directly sell the car to a Honda dealer. You can work around this restriction by purchasing the vehicle and reselling it to anyone you want. But, this method may involve additional sales tax and reduced equity. 

On the other hand, if your interest in a new lease involves the same car company as the current lease, then there’s nothing to worry about. 

Final Thoughts on Turning in a Leased Car Early for Another Lease

Take into account that the condition of your current car will affect the equity equation. Expect to get less for your vehicle if the tires are excessively worn down, or body damage is beyond normal wear and tear. Even an online purchase offer may be reduced if the buyer encounters surprises with your car. Keep your vehicle in good condition and correct any faults before getting offers. The terms of the lease require you to do this anyway.

Frequently Asked Questions

Q: what happens if you terminate a lease early.

Terminating a car lease early means you’re released from making monthly payments on your leased vehicle. However, this also means that you’ll have to return the car, pay the remaining balance, and all the costs, fees, and penalties that come with early termination. The terms of early lease termination should be disclosed on your lease contract.

Q: What’s the early termination fee?

Terminating a car lease early will make the lease company charge you the early termination fee. This fee is generally the difference between the remaining balance you owe on the lease and the credit you receive from the vehicle’s current value. You may also be charged taxes, transfer fees, and disposal fees. Depending on the lease terms, you might be looking at thousands of dollars with early termination.

Q: Is it a good idea to terminate a lease early for another lease?

A lease trade-in has its pros and cons. On a positive note, trading a lease for a new one is a convenient way to get out of a lease and replace your car with a new model. On the flip side, the monthly payment on a new vehicle may increase.

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Turning in a lease early? Here’s what you need to know

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If you’re looking to turn your lease in early, there are a few options to consider and evaluate before taking the plunge. You may want to turn in your lease early for several reasons — maybe you no longer need a vehicle, have a different financial situation, or find the vehicle itself simply isn’t a good fit for your lifestyle. If any of these situations apply and you’re thinking about turning in a leased car early , there are a few things to keep in mind when making this important financial decision.

What happens at the end of a car lease?

If you make it to the end of your lease , there are generally three options:

• Buy your current car (if your lease includes a purchase option)
• Turn in your car
• Turn in your car and lease or buy a new one

If you can make it to the end of your lease that’s usually the best option from both a financial and logistical perspective. When you terminate your car lease ahead of the agreed upon date, you may face additional fees and penalties that may cost you more than keeping the car through the full lease term. If you only have a few months left on your lease, you may decide that it is better to wait until the term ends before returning your car.

Early termination of a car lease, defined

Early termination of a car lease means terminating your contract before the end of the agreed upon term. If you have a three-year car lease, ending it before the three years are up would be an early termination. Early termination can be costly and a bit cumbersome to deal with. An early termination fee is standard and, depending on the lessor’s standards and the terms of your lease agreement, may require payment of remaining lease payments, an amount equal to the difference between the remaining balance of your lease and the realized value of the car after sale, or other charges. It is important to understand that the charges may be substantial if you terminate the lease early and can total up to several thousand dollars. The actual charge will depend on when the lease is terminated. The earlier you end the lease, the greater this charge is likely to be.

What to consider when ending a lease early

• Your reason for termination
• What the early termination fee would be
• Your lessor’s policies

Before turning in a lease early, it’s best to first speak with your lessor. They may be able to work with you to find a solution or at least inform you of their early termination policies.

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How to end your car lease early | explained.

By Lauren Fix, The Car Coach

You’re hardly driving anymore. But how do you turn in your leased car without losing a small fortune?

The pandemic and the sagging economy have many people asking this same question. The good news is that the once-rigid leasing process has become a bit more flexible—know your options! Before you decide which option to use, review your lease contract and collect this information:

Before you make a move to end your lease, you will need to know:

• Your monthly payment.
• How many months are remaining on the lease.
• The amount of additional lease-end fees.
• The residual value — the cost to buy your vehicle at the end of the lease.

The total of lease-end fees and remaining monthly payments is a reasonable estimate of what you would have to pay to terminate your lease early and walk away from your leased car. Call your leasing company to ask about both the cost of early lease termination and the price of buying out the lease altogether.

You could simply turn in the car and write a check, which is not the wisest choice financially.

Compare your buyout price to the current market value of your car on an online pricing guide such as TrueCar , Edmunds , or Kelley Blue Book , or by getting a real cash offer from online car dealers like Carvana , Shift or Vroom , or your local CarMax .

If you’re lucky, your car might be worth the same or more than the buyout price of the lease. If you saw last week’s segment, Do NOT buy a Car Right Now–Explained , you will understand more about today’s car-buying environment. If you are not so lucky about the buyout price, you’ll have to find a way to make up the difference.

Here Are Four Ways To End Your Lease Early.

Option 1: Sell your car to a dealer

This is the fastest and easiest way to step out of a lease agreement. And, because the pandemic has created a shortage of used cars, your car might be worth more than you expect.

Pickups and SUVs are in high demand now. The value and desirability of sedans and other vehicle types will depend on the popularity and availability of those brands.

You’ll get your best price from a dealership selling the same brand of car you’re looking to unload. For example, take your Honda to a Honda dealership for the best price, along with your research on your car’s value as a gauge. However, if the residual value was low and your payments high, you might still be on the hook for a lot of money. You may have to pay the difference. That is not a good option.

Option 2: Swap your lease

Most lease contracts allow you to transfer the remainder of the lease period to another person, like Swap a Lease or LeaseTrader , which are lease trading sites that can help you find someone who needs a car and can assume the remaining payments.

There is a small fee starting at $75 and $100. You can post the terms of your vehicle’s lease on these sites. But before you take this route, be sure to check your lease contract to see if it allows transfer to another party.

In addition, you may have to put up some cash of your own to make your offer more attractive to shoppers looking to take over a lease. Not all leases on offer have incentives, but many do, in amounts from a month or two of payments to several thousand dollars for high-end models with huge payments. Would you spend $500 to avoid making two years of $500 payments? Would you spend $1,000?

Another way to transfer your lease is to simply ask a family member or a trusted friend to take over the monthly payments. Make sure auto insurance still covers the vehicle and have a clear understanding of who will pay for any excess wear and tear at the end of the lease.

Option 3: Buy your car, sell it yourself

Most lease contracts allow you to buy your car at any time during the leasing period for a predetermined amount — that early buyout price. You can either purchase the car with ready cash or take out a loan to cover the expense.

Many auto refinancing lenders offer lease buyouts; some will lend amounts greater than the car’s book value.

Selling your car to a private party will bring a higher price than the trade-in or purchase figure from a dealer. However, it will require time and some money for advertising to find a buyer.

Option 4: Buy your car and keep it

Maybe you would like to keep your leased car if only your monthly payment were lower. In this case, you can use a lease buyout loan as well. The downside is that you would be extending your financial commitment to lower your payments.

Your leasing company may offer lease buyout financing, but if not, many auto refinancing lenders do as well. Some will loan you more than the car is worth if your buyout price is higher.

Here’s the Bottom line:

Do your homework before you make a final decision. Sometimes it’s better to keep the vehicle you have.

If you have additional questions, put them in the comments below, and I’ll be happy to answer.

Lauren Fix,  The Car Coach ®, is a nationally recognized automotive expert, analyst, author, and television host.  A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and aspects, energy, industry, consumer news, and safety issues.   

Lauren is the CEO of Automotive Aspects and the Editor-in-Chief of Car Coach Reports, a global automotive news outlet. She is an automotive contributor to national and local television news shows, including Fox News, Fox Business, CNN International, The Weather Channel, Inside Edition, Local Now News, Community Digital News, and more. Lauren also co-hosts a regular show on  ABC.com  with Paul Brian called “His Turn – Her Turn” and hosts regular radio segments on USA Radio – DayBreak. 

Lauren is honored to be inducted into the Women’s Transportation Hall of Fame and a Board Member of the Buffalo Motorcar Museum and Juror / President for the North American Car, Utility & Truck of the Year Awards.  

Check her out on Twitter and Instagram @LaurenFix.

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2 Responses to “How to End Your Car Lease Early | Explained”

Hi Lauren, love your radio interviews ! I have 5 months left on my lease, my contract buyout price is 13,700 the value seems to be 18 to 20,000 dollars. ‘Ive only used 1/2 the mileage. I want to keep the car. who do I deal with ? the dealership or the lease company ? how should I proceed ? thanks, Mike

can the dealership and or lease company change the purchase option/balloon price in the contract.? and what additional costs might I have to pay ?

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How to End a Car Lease Early

Leasing a vehicle might have been the best option for you at the moment, but over time, leasing a vehicle can become a burden. Ending a car lease early can seem like a daunting task as it can be incredibly expensive to terminate a lease early; regardless of your affluence, this article aims to educate consumers on how to end their car lease early with minimal impact on their credit score or wallet.

Thankfully, there are multiple ways for consumers to exit a car lease early and relieve any unwanted financial burden produced by their original lease agreement. There are various reasons why your car lease may no longer work for you, whether it be a change in income, loss of a job, or the vehicle you initially chose no longer meets your needs. Whatever your situation, this article will explore all of your options for the early termination of your car lease.

Options For Ending a Lease Early:

Transfer the Lease: One of the most beneficial ways for a leaseholder to terminate their car lease early is by transferring the lease to another private party interested in signing their name to the remaining lease contract. Contingent on the original lease not having expired, a lease transfer allows you to remove your name from the lease and replace it with a creditworthy new lessee. Common reasons for lease transfers are but are not limited to divorce or the death of a loved one. While some lessors allow the transfer of leases, other leasing companies do not and only allow transfers under certain circumstances.

If transferring your lease is an option you are considering, check the wording in your car lease agreement to verify the legitimacy of this option. If you cannot locate where your lease agreement stipulates the transfer of your lease, call your leasing lender and request information on the terms of a lease transfer. As previously mentioned, transferring your lease is contingent on the lender's credit requirements and the process of lease transferring being legal in your state.

Once the leasing company accepts an adequate new lessee, the company may require a lease transfer fee. Still, this fee is likely far less than early termination penalties if you exit the lease before the end of the lease term. Suppose you are having trouble finding a credit-worthy new lessee. In that case, a few dedicated websites assist in finding a new lessee for your remaining payments. Automotive websites such as swapalease.com, leasetrader.com, or quitalease.com connect you with individuals seeking to take over a lease. Although these websites offer professional services, keep in mind that you always want to verify that all steps of the lease transfer process are complete before assuming you no longer have financial responsibility for the lease.

Lease Buyout and Sale: A second option for lessees is a lease buyout. After requesting and paying off the lease payoff amount provided by the lessor, you can potentially make money selling your vehicle to a private party. Potential buyers could include car dealerships, a family member, or an online marketplace specializing in used car sales. Once you have purchased your leased vehicle at the leasing companies' payoff amount, you can seek market value for it or simply keep it and enjoy not having a monthly lease payment. If you do not have the capital to purchase your lease upfront, looking into buyout financing may be beneficial and should be a part of your overall decision.

Before deciding to pursue a buyout amount, ensure you look over the leasing company's stipulations for lease buyouts as they vary between leasing companies. You will also want to know the market value of the vehicle you are attempting to sell upon purchasing your lease to help determine if this is the appropriate course of action for your situation. While it is rare, in some instances, private parties may offer you more for your vehicle than the car's value.

Suppose your intention behind a lease buyout is to purchase a new vehicle or take advantage of special deals unavailable to you during your current lease. In that case, there is another option for you. Dependent on the dealership you work with, you may be able to roll over the amount owed on your current lease and apply that amount to your new car or lease. If you choose to roll over the residual amount of your previous auto loan into a new car loan, however, you will likely be faced with a significantly higher monthly payment than you had previously. Higher monthly payments and annual depreciation of your vehicle could lead to you becoming upside down on your new loan.

Trade-in the Leased Vehicle: Another viable option for consumers looking to get out of their car lease is to trade their leased car into a dealership for a new or used vehicle. Growing families, for example, often encounter the issue of needing a larger vehicle than initially leased. If you find yourself in this situation or simply desire a different vehicle, trading in your leased vehicle may be your best option. You will likely be charged an early termination fee. Still, the majority of dealerships allow you to spread the early termination fee over the course of your new monthly payments. If possible, however, it is advantageous to have both the money for the down payment and early termination fee upon seeking a new vehicle. If you choose to remain with the same dealership you originated your lease from, the leasing company may be more likely to waive or reduce penalties.

Lower or Suspend Lease Payments: If you are experiencing financial difficulties, this is an avenue worth considering. Contacting your leasing company will provide information on your ability to lower your monthly payment or temporarily suspend your car lease payments. When you first encounter financial difficulties, it is best to communicate these difficulties to your leasing company sooner rather than later. Some leasing companies will be willing to work with you by lowering your monthly payment or temporarily suspending your car lease payments in hopes of receiving some payment when you are again financially stable.

If your leasing company grants you lower monthly payments or a temporary suspension, this does not release you from the financial obligation of the lease. You are still liable for all money owed to the leasing company, including any fees assessed for the months of temporary suspension of your agreement. Also, keep in mind that if leasing is an avenue you wish to pursue in the future, leasing companies are less likely to offer you a new lease if you miss a lowered monthly payment or do not pay back the suspended obligation.

Pros/Cons of Ending a Lease Early

If early lease termination is a route you seek, transferring the lease or achieving an early buyout is the most financially advantageous way to do so. Often, however, a change in circumstances can lead to your inability to make your lease payment, leading to a need to trade in or seek lower monthly payments or even temporary suspension of monthly payments. If you are experiencing financial hardship, getting out of your car lease could be an intelligent decision.

An advantage of ending your lease early is that you are not stuck in a situation where you potentially develop negative equity in the vehicle. Outside of the monthly benefit of no longer having a lease payment, ending your lease could benefit you if you have recently moved to a city center that allows for easy access to public transportation or is within walking distance to your job. If this or a similar situation applies to you, check with your leasing company to ensure the cost of early termination of your lease does not outweigh the cost of maintaining your current agreement.

Leaving your original lease agreement is not always the best answer for everyone, even if your financial situation has changed. While ending a lease agreement has its advantages, it could also have lasting adverse effects on your credit and personal finances. If you are seeking a new vehicle because you no longer enjoy the car you leased, but your current vehicle continues to meet your needs and is affordable, it is best to retain the existing lease until it expires.

Preparing your Vehicle

Whether you have decided to end your lease agreement early or buy out your lease by paying the residual value, preparing your vehicle is crucial to ensuring you achieve the best result possible. Washing and detailing your vehicle before seeking any of the methods mentioned above of ending your lease agreement early will assist in the vehicle's overall appearance. A clean vehicle represents being a good steward and caring for the vehicle, which will transfer to more money on the open market or could prevent unnecessary and entirely preventable fees when returning the leased vehicle.

Tires show wear and tear and are a tell-tale sign if a lessee did their part in maintaining the vehicle during their ownership. Ensure your tires have plenty of tread remaining if they are worn or uneven. Purchasing a new set of tires at a local tire shop is recommended if the tread depths fall below the minimum acceptable tread depths outlined in your lease agreement.

Once your vehicle is clean and visibly serviced, take lots of pictures. Take detailed photos of all areas of interest for potential buyers or to ensure the condition in which you returned your lease. Pictures of the interior, exterior, odometer and tire tread ensure you have plenty of evidence for either situation. Having as much photo and documentation evidence as you can provide will help ensure a hassle-free transition no matter which route of ending your car lease early you choose.

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Key takeaways

• During a lease buyout, the lessee purchases their leased vehicle at or before the lease agreement's end.
• If the lease hasn't concluded, your lease buyout may incur extra fees.
• While the leasing company will likely offer financing options, it's best to shop around to find the most competitive rates.
• The process can be smart if you have fallen in love with your leased car and want to drive it long-term.

A lease buyout involves purchasing a leased vehicle either at or before the end of the contract. Typically, leases include a purchase price option that is established when the lease is signed.

“The person leasing the vehicle would need to pay the amount of the vehicle’s residual value in addition to any remaining lease payments per the contract, plus sales tax on the purchase and a disposition fee to the dealership,” says Matt Smith, deputy editor at CarGurus, an online vehicle marketplace.

Tips for buying out a lease

If you are considering a lease buyout, first confirm with the lessor or dealer that it is an option. Or you can refer to your monthly leasing statement to find the payoff amount if a lease buyout is permitted.

Once you have, do your homework and understand how factors such as timing, the car’s value and financing will affect the price you pay. These five tips will get you on your way to driving away with the car you want and a good deal.

1. Think about the timing

The question might not be whether to buy your leased car but when to buy it. The purchase’s timing changes the price you will pay.

If you decide to purchase before your lease expires — what’s known as an early buyout — you may have to pay extra fees or finance charges. Check the terms of your lease agreement thoroughly to see how the leasing company handles early buyouts. If there are too many fees, wait until the end of the lease to buy.

“You can often get the best possible deal on the car by waiting until the end of the lease term to purchase the car,” says Sean Pour, co-founder of car-buying service SellMax. “Once the lease is almost up, the dealership will have to think about reselling the car, and they’d rather sell it to you.”

If you decide to buy before the lease is up, make sure the leasing company doesn’t misinterpret your interest in an early buyout as a desire for early termination of the contract. Be clear that you want to get the car, not get rid of it.

2. Assess the car’s value

Research the two types of car values to make sure you get a good buy.

• Retail value: How much you would pay to buy the car from a dealer.
• Wholesale value: How much a dealer would pay to buy the car at auction.

For detailed pricing information, check out sources such as Kelley Blue Book, Cars.com, TrueCar and Edmunds. Have all the relevant information ready when conducting research, including the make, model, trim, model year and current mileage.

“I tend to tell people that looking on sites like Craigslist is a good option because you’ll see what the car is actually selling for in your area,” Pour says.

Next, compare your findings with the car’s residual value in your lease agreement. Typically, leases combine the residual value with a purchase-option fee, if applicable, to estimate how much the leasing company will charge you to purchase the car.

By doing independent research, you can develop an estimate of what you should pay. If your numbers and the leasing company’s are too far apart, you may want to consider returning your lease and simply buying a different used car .

3. Shop around for financing

The leasing company will likely offer to finance the purchase — but don’t say yes until you have explored other financing options. Otherwise, you could pay extra interest because of dealer markups.

You will likely get a better interest rate at a financial institution than with a leasing company or dealership. There are no fees or penalties if you decide not to go with the leasing company.

In addition to lending money for new and pre-owned cars, some lenders offer car lease buyout loans that work like refinancing loans .

“Lenders that offer auto loans typically also typically offer loans for buying out a lease,” says Steve Sexton, CEO of Sexton Advisory Group, a financial services firm. “But the APR on a lease buyout loan is generally higher than on a new car.”

As with any auto loan, the key to getting a good deal is shopping around. Check out lease buyout loans from banks, credit unions and online lenders. This way, the leasing company will have to beat the best deal you found on your own.

This is particularly true if you have a solid credit score, Pour says. “Finance companies will be glad to have you and they’ll even compete on rates.”

4. Let the leasing company make the first move

You may feel like you can’t wait to contact the leasing company to discuss an auto lease buyout, but take a moment to pump the brakes. Making the first move could blow your chances at negotiating favorable terms, according to consumer advocates.

Typically, the leasing company will call about 90 days before the lease is due to expire. If you contact the company before the countdown starts, you may tip your hand about how much you want to buy the car.

Auto lease buyouts are like other types of transactions. You have a small advantage when the seller doesn’t know your level of interest.

5. Try negotiating

Often, companies have a no-negotiations rule for the purchase price of a lease buyout, leaving little opportunity for haggling.

“There isn’t much, if any, negotiating to be done because all the terms are agreed to ahead of time in the lease,” says Benjamin Preston, auto reporter for Consumer Reports.

Still, it can’t hurt to raise the subject. You’ll never know what kind of deal you could get if you don’t ask.

Ask the seller to consider a few concessions, including:

• Waiver of the purchase-option fee
• Purchase incentives
• Financing discounts

Experts point to the purchase-option fee as a sticking point many sellers are willing to take off the table.

When is it a good idea to buy your leased car?

A lease buyout is a good idea if you are ready to drive a vehicle long-term rather than going ahead with a new lease. To determine whether a lease buyout is right, you must ask yourself one major question: Is the vehicle worth buying?

Understanding the car’s residual value is the first step to figuring this out. If your vehicle has a higher value than the buyout amount, it makes sense to purchase. On the other hand, if the value of the vehicle has dropped, avoid a buyout unless you can negotiate a lower number.

To illustrate, assume the car you’re leasing has an appraised value of $15,000, but the lease buyout amount is $18,500. Assuming you kept the car in pristine shape to avoid wear-and-tear fees and didn’t exceed the mileage limit, it wouldn’t be sensible to keep the vehicle. You’ll be paying $3,500 more than it’s worth. In this case, you’ll be better off buying a vehicle that’s worth $15,000 to maximize your dollars.

Another reason some drivers might buy their leased vehicle is to avoid additional fees accrued during the lease. If you exceed your allotted mileage or have tears in the upholstery or dents, the fines might mean a buyout could save you money if you can turn around and sell the car for a profit.

Always calculate the difference between what you’ll pay versus what cars of the same make and model in similar condition are going for in your area before agreeing to a buyout.

The bottom line

Now that you know the basics of a lease buyout, take time to prepare and save money. Be ready to:

• Do your homework on prices and values.
• Shop around for a loan.
• Negotiate price and terms, if possible.

If you have any lingering doubts, you may want to table the idea of buying your leased car.

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The Best Way to Get Out of Your Car Lease

There are alternatives to paying stiff early termination fees

Daniel has 10+ years of experience reporting on investments and personal finance for outlets like AARP Bulletin and Exceptional magazine, in addition to being a column writer for Fatherly.

Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

If you like driving a nice set of wheels but can’t afford to pay cash or make big monthly loan payments, then leasing a car can be tempting. But leasing does have its drawbacks, one of which is flexibility. If you want to return the vehicle before your lease expires, then you’ll likely face a stiff early termination fee and additional penalties. However, you do have some other options.

Key Takeaways

• One of the best ways to get out of a car lease early is to find another person to take it over for you, as long as your financing company allows that.
• If you don’t already know someone who would like to take over your lease, then a lease swapping website can help you find one.
• Other options include exchanging the car for another one, buying the car to keep, or buying the car and then selling it.

How to Get Out of a Car Lease

One frequently overlooked way to get out of a car lease—and often the least expensive choice—is to transfer your lease to someone else.

Suppose you have two years left on a three-year lease. Whoever buys your lease agrees to make the remaining monthly payments. While some finance companies won’t allow such transfers, the vast majority do. The trick is finding someone who’s interested in taking over the car and the lease from you. Fortunately, there are websites that can make that relatively easy.

The earlier you want to get out of a car lease, the higher the early termination penalties are likely to be.

Lease Swapping Websites

Websites like Swapalease and LeaseTrader provide listings that help match existing lessees with potential lease buyers.

These trades can be just as advantageous for those assuming the lease. For one thing, they won’t have to make a sizable down payment on the vehicle, which the original leaseholder already has done for them. Furthermore, some people only need a car for a relatively brief period of time—say, a year or two. Taking over someone else’s lease is an ideal way to obtain a relatively new car for a short period. 

Keep in mind that getting someone else to assume your lease usually isn’t free. Using a trading website to facilitate the transaction typically costs from $100 to $350. However, that’s a fraction of what most leasing companies will charge you if you decide to return your vehicle early. Some finance companies also assess a lease transfer fee—typically around $300—when you arrange a swap. But even after paying all that, you still may come out ahead.

To make your lease especially attractive, you might want to consider offering an incentive—say, $500—to anyone who takes over your lease.

Before registering with a lease-trading website, you should check with the company that holds your lease and confirm some information with the website itself. For example, you’ll want to know:

• Does your leasing firm allow transfers?
• Does the buyer take on full financial liability for the lease once it’s transferred? You could, for example, be liable if the buyer fails to make lease payments.
• Does the lease trading website perform a credit check on potential buyers? That’s worth knowing if you (the original leaseholder) will retain some responsibility for payments after the transaction.

If you transfer your lease to someone else, then you still may be held responsible if they fail to make payments.

Three Alternatives to Lease Swapping

Depending on your goals, there are other possible ways to get out of your lease. These include: 

• Trading in the car. Car dealers sometimes will allow you to exchange your current automobile for a different model. This option is a mixed bag. In many cases, you still have to pay the early termination fees, although they’re rolled into your new payments. In other words, the pain is simply spread out over a longer period of time. 
• Buying the car. Often, a leasing company will let you buy the car before the lease runs out. This is a course that you might want to take if, for instance, you’ve exceeded the lease’s mileage allowance and you know you want to hang onto the car long-term anyway. (Most car leases allow you to drive 10,000 to 15,000 miles a year but charge extra when you go beyond that.) The leasing company should have a payoff schedule that shows how much you’ll have to pay to make the car yours. 
• Selling the car. Another alternative is buying the car in the middle of the lease, if that’s allowed, and selling it to someone else. But be forewarned: The lease payoff amount might be higher than the car’s market value , forcing you to take a loss on the sale. But if that loss would be less than the early termination fee and other penalties, then it’s something to consider.

The Bottom Line

There are a number of ways to get out of a car lease and avoid early termination fees. Transferring the contract to someone else can be a particularly appealing choice. Just make sure that your financing company allows such transfers before you start the process. Also, find out whether you’ll still be on the hook for payments if the other person fails to make them.

Consumer Financial Protection Bureau. “ What Should I Know About the Differences Between Leasing and Buying a Vehicle? ”

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How to Change a Vehicle During a Lease

How to Lease a Demo Car

Changing a vehicle during a lease is a common occurrence, as you may need to swap your current lease for another, for a wide range of reasons. Whether you are simply tired of your current leased vehicle, or are close to exceeding the maximum allowed mileage in the lease contract, you can change your leased vehicle by completing an early termination at a local dealership. Upon completing an early termination and paying any necessary penalties, you can get into a new lease ahead of schedule.

If you are ready to change your vehicle during a lease, you will likely be able to do so. Undertaking such arrangements will require direct communication with your local dealership in order to further explore your options.

Evaluating First Steps

Contact a dealership that sells the type of vehicle you are looking to return. Ask the dealership to get you the early termination amount for your current lease. In order for the dealership to get the right info, it needs your vehicle identification number and the current mileage on the vehicle. Next, schedule an appointment to look at your ideal new car after you have an idea of your early termination amount. If you are looking to replace your current lease with another from the same manufacturer, you can take care of both things at the same dealership and with the same salesperson you spoke with earlier.

Exploring The Deal

Request a lease quote on the vehicle you want to purchase. When working the quote, ask the dealership to include the early termination amount you were quoted earlier. You cannot return your older leased vehicle to the finance company without paying the early termination amount. Agree on a deal for your new vehicle. Verify with the dealership that the lease payments quoted include paying the early termination on your old lease.

After you agree on a deal, you must sign up for your new lease. Make sure the purchase order for your new vehicle includes a statement that guarantees the dealership will pay the early termination amount on the older lease you want to swap. Also, get these promises about paying off your old lease in writing, just in case the dealership fails to pay off the old lease in a timely manner and you face late fees assessed by the leasing company.

Return Your Previous Vehicle

If you are leasing a vehicle from a dealership that does not sell the same make, schedule an appointment to return your vehicle to a dealership that sells the make in question. Upon returning the vehicle to the dealership, an independent inspection will be ordered. If there is excess damage on your old lease, you may get an additional bill from the leasing company to cover the damage.

• LeaseGuide.com: Get Out of Car Lease? Break a Lease? End a Car Lease? Terminate a Lease? Exit a Lease Early? It's All the Same Thing
• LeaseGuide.com: Home
• Consumer Financial Protection Bureau. "What Should I Know About the Differences Between Leasing and Buying a Vehicle?" Accessed April 12, 2020.
• Merriam-Webster. "Lease." Accessed April 12, 2020.
• AARP. "To Buy or Not To Buy." Accessed April 12, 2020.
• Consumer Financial Protection Bureau. "What is a Manufacturer Suggested Retail Price (MSRP)?" Accessed April 12, 2020.
• LeaseGuide.com. "Capitalized Cost – Cap Cost." Accessed April 12, 2020.
• Autotrader. "Leasing a Car: Can You Negotiate the Price?" Accessed April 12, 2020.
• Edmunds. "The 'Residual Value' of Leasing." Accessed April 12, 2020.
• Federal Reserve. "Keys to Vehicle Leasing: Future Value." Accessed April 12, 2020.
• LeaseGuide.com. "Money Factor—Explained." Accessed April 12, 2020.
• Federal Trade Commission. "Financing or Leasing a Car." April 12, 2020.
• Federal Reserve. "Keys to Vehicle Leasing: End-of-Lease Costs: Closed-End Leases." Accessed April 12, 2020.

Michael Ryan is a freelance writer with professional experiences in the auto industry and academic training in music. Ryan earned a Bachelor of Arts with honors from Olivet College. Since college, he has been a featured speaker at music conferences at the University of Michigan and Bowling Green State University. Ryan is a published writer, with work featured on websites including eHow and CarsDirect.com.

We Buy All Cars, Running or Not!

How to return a leased car early here are your options.

• June 11, 2021

If you're wondering, “how to return a leased car early?” You can either return the car directly to the leasing company using early termination options while paying all penalties, trade in the car and lease another one, have a friend or family member take over the leased car, buy the leased, or sell this car to a private buyer and pay it off to the leasing agency. 

Leasing a car is a great option for many drivers. However, something might happen suddenly requiring terminating the lease early. The question always remains: is it even possible to terminate a car lease early? If yes, what are the consequences?

In general, it is possible to terminate the lease fairly. The only thing to keep in mind is costs. There are usually some early termination fees and penalties that you need to be aware of. By following certain tips and tricks, you can determine the right time to terminate the car lease to reduce the penalties as much as possible.

This article provides you with great options that you can select from to help you answer the question of “ how to return a leased car early?” We also provide you with some additional tips to get your vehicle ready for early termination. 

How to return a leased car early? Here are your options 

By leasing a vehicle, you can easily access the most advanced technology and enjoy driving a vehicle with too many features. However, there might be a point of time where things didn't work out, and you must terminate the lease early. 

Unfortunately, there is no one clear solution to help you terminate the car lease without paying any additional fees or penalties. Depending on the method you decided to go with, penalties can differ significantly. Let's take a closer look below at some of the options you must end at lease car early: 

Early termination 

The most straightforward option to return at lease car early is through early termination. Many leasing companies might have this option allowing you to return the vehicle early. However, this option comes with its own drawbacks.

When the company lets you return the vehicle early, you need to take care of all penalties and termination fees. These fees can pile up and become more than thousands of dollars very easily. Therefore, to get an accurate answer about how much the penalties are, you'd better give the leasing agency a call and understand the details from them.

Keep in mind that you will have to pay the late fees, and you will need to pay any charges, parking tickets, or any past due payments on the vehicle.

By selecting early termination, you're going with the most expensive approach to returning at lease car early. However, this option is considered the safest and easiest. 

Have someone else take over the lease 

As you might notice, early termination is not very cheap and might not be the preferred option for many drivers. The second thing you might need to consider is having someone else taking over the lease.

In other words, you can simply bring a family member or friend who meets the credit requirements for the car leasing company and have him continue the lease. 

Keep in mind that there will be some lease transferring fees along with other costs you need to consider. Therefore, make sure you do the correct evaluation and compare the different final costs for transferring the car lease versus ending the lease early. 

Lease another vehicle from the same dealership

If you're interested in terminating your current car's lease early, you might consider trading in and leasing another vehicle. By trading in your current leased car, the dealership will roll out any penalty fees towards the other vehicle.

Although this option is still expensive, it allows you to take care of any fees and payments over an extended time rather than having to pay them off immediately on the spot. 

Consider Lease buyout

Did you know that you can early purchase your leased vehicle? Yes! This option can work perfectly for people who can afford to buy this car. Imagine if the current market price of the leased car is higher than what the company is requiring you to pay under your lease contract.

While this option can be a lifesaver, it wouldn't tell you anything unless you have the money to purchase the vehicle. In other words, if the reason you are ending the lease is because of financial hardships, you might need to pass on this option because it's not going to work for you. 

Sell your leased car 

The final option we would like to highlight here is selling your car and using the payment to pay off the lease. There are plenty of private buyers interested in buying your vehicle, and this option is great if you don't want to deal with any monthly penalties for overusing the car.

Keep in mind that if the car's market value is lower than what you at lease companies are asking you, you might end up losing and paying off from your pocket. However, even after losing some money, it will not be as bad as any other options when it comes to costs. 

How to prepare your car for early lease termination? 

Did you decide to return your leased car early? Then you need to make sure that the vehicle is very good-looking to encourage the leasing company to provide you with good options for early lease termination. 

Although the following tips will not necessarily reduce the penalties or fees, it is considered a good practice whether you're returning your leased car early or on time. Let's take a closer look below: 

Wash your leased car 

If you decided to return your car to the leasing company, you want to make sure that the car is great looking and it's clean enough . Therefore, we recommend that you perform a thorough car wash of your vehicle's internal and external portions. Consider cleaning up the windows and removing any trash or food leftovers.

We usually recommend that you have a professional mechanic or a professional repair shop perform the detailed cleaning of the leased car, so you don't have to worry about any undesirable outcomes when returning this car to the leasing company. 

Inspect the vehicle's tires 

Although there are many components you can check when it comes to returning your leased car, tires are one of the most important ones . Some leasing companies have certain language in the contract specifying the necessary treads in your tires. Therefore, review the contract and see whether your tire treads are suitable or not. 

If the tires are not in good condition, you might need to purchase new tires and replace them before returning the leased car. 

Keep high-quality pictures 

If you decided to sell this car so you can end the lease early, consider taking very high-quality pictures. After cleaning your vehicle, it's a perfect time to take nice pictures in the daytime. It's important to take photos of the tires, the odometer, the exterior, the engine, etc.

You could use these pictures in any advertising for selling this car or probably if you got questioned about the mileage on the car after his turn in any scenario. 

How can you get out of a car lease without penalties? 

To be clear on this, there is no way you can terminate the lease early without paying any penalties. Penalties might differ and become lower by choosing an option versus the other, but it will not be zero.

As we indicated before, if you're planning to end your lease early, come I can't either take advantage of the early termination option, have someone else take over the lease, lease another vehicle instead, or consider early buyouts options. 

Evaluate how much you have to pay under each option to make an informed decision and reduce the penalties as much as possible.

You might need to have a conversation with the leasing company for more details and accurate numbers.  

Can you get out of a car lease a year early? 

Whether you’re terminating the car is early one month before or one year before, you still need to take care of termination fees. It is possible to end the lease a year or a different early time but, you must talk to your leasing company to understand all penalties and fees. 

In some scenarios, getting out of a car leaves a year early might cost you thousands of dollars and therefore, before making your final decision, consider evaluating the situation and seeing how much you'll lose by terminating the lease early. 

Why it's not easy to get out of a car lease? 

To understand why it's complicated to get out of a car lease early, you need to familiarize yourself with how leasing a car works.

When you purchase a new vehicle, you must have a certain payment type to either pay it in full upfront or have monthly payments if you decide to go with financing. 

When it comes to leasing a car, you don't have to pay the vehicle’s price at all. What you pay is the price of expected depreciation over the years. Of course, you will have to pay for any taxes or some interests along the way. Some leasing companies might require a down payment to take care of any after-lease costs. 

To determine how much exactly you have to pay for leasing a car, you need to understand two important numbers: the cap cost, the capitalized costs, and the residual value, which is the vehicle's value at the end of the lease term. 

Subtracting the residual costs from the capitalized costs represents how much you'll pay for this vehicle over the time frame of leasing the car. 

When you lease a vehicle, the leasing company has a certain payment amount and frequency that has to be paid. Failing to pay any of these leases can cost you some fees and other penalties defined in your lease contract.

When terminating the car, you're asking the leasing company not to pay the rest of the depreciation amount. As a result, most leasing companies put what's known as early termination fees and some additional penalties as a backup if something happens like this. 

Usually, the penalties and early termination fees are not cheap, which discourages many customers from ending the lease fairly and ensures that the agency or the leasing company doesn't get their vehicles returned suddenly. 

Leasing a car is an amazing option for those interested in riding high-tech vehicles without completely purchasing them. However, when something happened suddenly, you might need to deal with early termination for your leased car.

The good news is that you can terminate the contract early, but there are some penalties and fees. These fees can differ significantly depending on the approach you decided to go with. 

If you're wondering how to return a leased car early? You can either take advantage of early lease termination, have someone else take over the lease, switch to leasing another vehicle, or consider early buyout options.

If you decided to buy your leased car to sell it to the outside market and use the payment to take care of any fees, Cash Cars Buyer could help you! 

Cash Cars Buyer is one of the top-rated car removal companies in the nation that guarantees to pay you the top dollars and will provide you with free towing despite your living location around the United States. 

Our process is very straightforward and doesn't take more than a couple of days to get your vehicle removed safely and for the most money. 

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Ending Your Lease Early

There are a few options available if you are interested in ending your lease early.

• Early Termination
• Transfer Your Lease
• Frequently Asked Questions

Although it can be costly, an early lease termination is allowed if you have one or more lease payments remaining.

There are two options for early lease termination depending on how many months are left on your lease:

• Less than three months remaining until your lease end date: Pay your remaining lease balance along with any end of term charges in the Tesla Leasing Portal.
• Three or more months left until your lease end date: Pay the difference between your adjusted lease balance and the current market value of your vehicle.

To initiate the early lease termination process from the Tesla app, follow these steps:

• Open the Tesla app.
• Tap ‘Financing.’
• Tap ‘Lease Details.’
• Tap ‘Manage Lease.’
• Next to ‘Update Lease,’ use the dropdown arrow to select ‘Early Lease Termination.’
• Follow the prompts to obtain an estimate quote to terminate your lease early. This quote is subject to change pending an inspection, the date the vehicle is returned and quote expiration.

Once you’ve completed those steps, we will ask you to complete an inspection and schedule a drop-off appointment. You must remit payment and submit and odometer disclosure when you return your vehicle.

Note: To access this feature in the Tesla app, make sure you have the latest version of the Tesla app.

You may be eligible to transfer your lease to a credit-approved assignee. Lease transfers are not permitted in the final 12 months of the lease period, and the current leaseholder is responsible for finding an applicant to take over their lease.

Note: Free Supercharging and Premium Connectivity will not transfer to the new owner.

Eligibility

• You have 13 or more months left in your lease agreement.
• You are current on all lease payments.
• The lease has not been previously transferred.
• A credit application fee of $150 plus applicable taxes.
• A lease transfer fee of $500 plus applicable taxes.

Getting Started

Once you’ve found a potential transferee, you must follow these steps before initiating the lease transfer:

• If they do not already have one, ask the potential transferee to create a Tesla Account .
• Send a credit application to the potential transferee from your Tesla Account or the Tesla app.
• Request a transfer date. The transfer date cannot be less than seven days from the current date.

To initiate the lease transfer process from the Tesla app, follow these steps:

• Next to ‘Update Lease,’ use the dropdown menu to select ‘Transfer Lease.’
• Enter the contact information of the potential transferee, then submit.

When entering the email address, make sure it is the email address associated with the transferee’s Tesla Account. If no Tesla Account is associated with the email address submitted, we will send account set-up instructions directly to that email address.

The lease transfer process won’t start until the potential transferee submits the required documents in their Tesla Account . The potential transferee must submit the required documents below to initiate the transfer process:

• An online credit application
• A photo copy (photocopy) of a valid driver’s license (front and back).

The transferee must also provide valid insurance on the vehicle meeting Tesla requirements and with an effective date matching the lease transfer date.

Once the potential transferee submits their documents, we will review and provide a credit decision. If approved, both parties will be asked to confirm the terms in their Tesla Account. We will provide a transfer date once the terms have been accepted. The exchange date will be listed on all contracts. The vehicle may not be exchanged prior to the exchange date without prior approval from Tesla.

We will send additional contracts and documentation for both parties to complete, and any documents needed to register the vehicle with the local authority.

Assuming all previous requirements are met, we will confirm if the vehicle can be exchanged and will provide copies of the final contracts on the specified exchange date.

Once the transfer is complete, we will process the documents and finalize the new registration for the transferee. The transferee will be billed for all registration costs, transfer fees and applicable taxes once complete.

For additional information, contact us .

Does Tesla offer a third-party dealership buyout option?

We do not offer a third-party dealership buyout option. If you would like to end your lease early, review your Lease Agreement to learn more about your options.

Does my early lease termination quote expire?

Yes. Early lease termination quotes are good up until the day prior to next payment due date.

• Your Options
• Lease-End Videos
• Early Lease Return
• Return Your Vehicle

Plan to turn in your vehicle earlier than your maturity date?

We understand you may decide to turn in your vehicle early, so here is what you need to know about your lease obligations if you do

Military Members and Family

• Servicemembers’ Civil Relief Act (SCRA): Eligible service members may terminate their lease agreement prior to the scheduled maturity date without early lease termination charges. You must contact us at 800-874-8822  to determine eligibility.
• Gold Star Military Program*: Eligible service members and spouses of service members who have suffered death, a catastrophic illness or injury may be eligible for early termination. You must contact us at 800-874-8822  to determine eligibility.

* Cancellation or forgiveness of lease obligations may be taxable as income.  Please contact your tax advisor for more information 

Deceased Customer

• Transfer of Lease: If you have someone who is interested in taking over the lease contract and obligations to the lease agreement, please contact us at 800-874-8822    to learn more about transfer criteria and options. 
• Probate Lease Cancellation*: In the unfortunate event of death of all parties on the lease contract, there may be eligibility for early termination and forgiveness of any remaining lease payments. You must contact us at 800-874-8822  to determine eligibility. 

Returning 31 days or more prior to maturity date

• TFS will calculate your early return balance.  Where applicable, TFS will use the lowest calculation of this balance based on your lease agreement.
• You will get a Lease End Invoice 60-120 days after return as calculation of your balance may be determined after the vehicle is sold at auction
• Review the “Return Your Vehicle”   section to learn how to prepare and what to expect upon return.  

If you have any more questions, feel free to give your dealer a call.

• Can You Trade In a Leased Car Early to Buy Another Car from the Same Dealership?
• Auto Credit Express
• Jul 28, 2022
• By Meghan Carbary

In almost every case, you can certainly turn in your leased vehicle early. Whether you buy or lease from the same dealership after is up to you. What you need to know before making your decision is if there's a penalty for early lease termination. Here's what we know about early lease trade-in.

Turning in Your Leased Car Early

Penalties may include an early termination fee, having to pay the remainder of your lease payments upon vehicle turn-in, or having to pay the difference between what you owe on the lease and the value of the car if there's negative equity. It's also possible that you may have to pay storage or transportation fees, foot the bill to have the vehicle prepared for sale, or pay any applicable taxes that haven’t been paid.

Just because penalties might be charged doesn't mean you should give up on turning in your leased car early , especially if you plan to purchase a new vehicle from the same dealer. In fact, some companies even offer incentives for early lease turn-in if you're planning to buy or lease again. Check with your dealership to see if there are offers available that you can take advantage of in this case.

Options for Early Lease Termination

More than one option at lease end. Did you know that returning your vehicle to the dealer you leased from isn't the only option when ending your lease ? The important thing to remember is that your lease must be completed, or the car must be purchased if you're planning on taking other routes.

Other options you have for ending a lease early:

• Trade-in your leased vehicle: If your goal is to purchase a different car from the same dealership, you can always contact the dealer and see if there are any incentives available to roll your lease balance into the purchase of another vehicle.
• Transfer the car lease to someone else: You can find a buyer on your own, or use an online "lease swap" company to transfer the remainder of the lease to another person . Keep in mind this isn't allowed in all states, and the buyer you find has to qualify for the lease. So, make sure you check with your leasing company and local DMV or Secretary of State before you sign anything over to someone else.
• Buyout the leased vehicle: Even if you want to purchase another car, getting an early lease buyout may be worth your while if there's equity in the vehicle and you can afford it. You avoid excess wear and tear and mileage charges this way, and can do as you please with the car once it's yours, including trading it in for another vehicle.
• Sell the vehicle privately: If you can sell the car privately for enough to pay off the buyout amount, you can go for this as well. Keep in mind, though, that if the buyout amount is high, it can be more difficult to turn a profit, making this option less worthwhile.

Purchasing a Vehicle

Buying instead of leasing. You can typically purchase a vehicle from the same dealership you've leased from , so long as your lease is completed. Whether or not you terminate your lease early is up to you, and usually so is what you decide to do next. If the car you're leasing isn't the one for you, you typically don't have long to wait to get into something else since most leases are only two to three years.

Rate shopping can help. If you're planning on purchasing instead of leasing know what your options are and rate shop before you jump into financing. It may seem easiest to stick with the same dealership, and sometimes a dealership's captive lenders will compete with the rates you may get through a bank or credit union. However, with cars in short supply and many vehicles going for markup prices you may get a better deal through a different lender. Rate shopping can help you find the lowest rates if you apply for the same type of loan within a two-week period.

Deals may be sparse. Additionally, know that buying right now may not get you the same deals as you're getting by leasing a vehicle. With the industry suffering from inventory restrictions due to the chip shortage and supply chain issues, it could be a long wait to get into a new car. This means turning in your leased vehicle early may leave you high and dry. Be sure to talk to the dealership and see what your individual options are from moving out of a lease early and getting into a vehicle purchase.

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Car research, sign in, what to do when moving to a different state with your car, relocating to a new state can be stressful, but getting your car settled doesn't have to be..

QuickTakes:

• Update your loan or lease information
• Insure the car at your new address
• The costs of registering a car

From packing up your old life to finding a new community, moving to another state is a lot to adjust to and organize.

If you're bringing your car or truck with you as part of the move, however, getting everything settled for your vehicle might be one of the easiest parts of the relocation process. By avoiding some common pitfalls, the move to another state with your car could be less stressful than you might guess.

Update Your Loan or Lease Information

If you own your vehicle outright, you can go ahead and skip this section. If you're making payments, either on a loan or a lease, the first thing you should do is check your loan documents to make sure there is no prohibition against moving the vehicle to another state. Most loan contracts do not include such a prohibition.

Then, after you move, you should update your address with your lender. You can often do so online — sometimes through the same portal you use to make payments — or you can call your lender to take care of the update over the phone.

Changing your address is important for a couple of reasons. Depending on the state and the structure of your auto loan, you could incur fees or taxes from the state, which you may be required to pay out of pocket or your lender may include in your loan balance. If included in the loan balance, your payments may change. Even if the payments don't change, be sure your lender has your current address so that once you've paid off the loan they can send your car title to the right place.

Update Your Insurance Information

Automotive insurance in the United States is regulated at the state level. If you're relocating to another state, this means you might need to not only change your insurance plan but also your insurance company. Sometimes this is as simple as being moved to a different state-level subsidiary of a national brand.

Other times, the insurance company you were using doesn't operate in the state you moved to and you'll need to change your insurance company entirely.

It can be helpful to look into the insurance regulations and requirements in your new state before you move to understand how your payments could change and avoid any unpleasant surprises. For example, your premiums might go up, especially if you move to or away from a no-fault state or if the new state has higher policy-limit requirements.

It might also be a good time to shop around for a new insurance company to see if you can get a lower rate than you would get sticking with the same company. Once your car is insured in your new home state, don't forget to cancel your old insurance to avoid paying for coverage you don't need.

Register Your Car in Your New State and Change Over Your License

Most states have a limited grace period during which you need to change your vehicle registration and license to your new address. This varies from state to state but is generally between 30 and 90 days. Failing to do so can result in fines or even having your vehicle impounded.

Some states allow you to get your license and registration updated in the same visit, so check before you go. Also, verify with your state's department of motor vehicles or its equivalent the documents you may need before your appointment.

At the very least, you will likely need your old license, proof of ownership, and proof of insurance. Some states, such as California, require new residents to retake the written portion of their driving test before being licensed.

In certain states — New York, for example — you will also need to get your car inspected before being allowed to drive it past the grace period, even if your old state didn't require such inspections.

Registration fees can vary from state to state, so check with your new state to make sure you budget enough money. Also, ensure that you know the correct payment type with you. Not every state takes every common form of payment.

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Ending A Car Lease Early: What Are Your Options?

What's covered.

• Introduction
• What are the potential penalties?
• Is there a cheaper way to get out?
• Use a lease-trading website
• Lease another car through the same dealership
• Default on your lease
• Summary - so what's the best option?

It's easy to get drawn into a business or personal contract hire deal. They're convenient, good value for money and the low monthly payments seem easy to keep up. 

Sometimes of course, like all things in life, your lease might not go to plan.

Perhaps you've got a new job that requires a lot of driving and you don't want to get hit with those pesky excess mileage charges . Maybe you can't keep up with the lease payments due to financial difficulties. You might even just really hate your lease car. You just can’t make it to the end of the lease.

The good news is that when you take out a lease agreement, you're not totally trapped. You have car lease cancellation rights , but returning a leased car early can be costly. If you're rejecting a car for legitimate faults, we've got a separate post on that.

This article will give the lowdown of what happens at the end of a lease that is terminated early, what the consequences are, and will give you some pointers on the best way to do it.

If you're just carrying out some research before plunging into a lease (sensible!) then be sure to use Lease Fetcher compare car lease deals when you're ready. We have gathered the top personal car lease and business car leasing deals from UK leasing brokers.

What are the potential penalties? 

Leasing companies don't want you to terminate early. As such, they charge some seriously hefty penalties to prevent you from doing so.

The actual amount of money you need to pay to cancel your lease depends on the leasing company but it would be any of the following:

• Any lease payments remaining - you need to pay what's left in your lease agreement. So, if you cancel at 12 months on a 24-month lease, you will have to make up the 12-month difference. If you pay £200 a month, that's £2400. Ouch!
• 50% of the remaining payments - some companies are a bit more lenient and will only ask for 50% of the remaining payments, plus some extra termination fees.
• Custom deal - depending on your circumstances, the leasing company may calculate a custom fee based on how much mileage you've done and how many months you have left, rather than asking for the whole lot of a specific %.

There are additional lease car return charges on top of this, which may include all or just some of the following:

• Early termination fee - A fee you pay to the lease company for the hassle of processing a lease termination. 
• Costs to get the car ready for sale - This is a penalty for the lease company having to sort out the car to make it presentable to sell - fixing scratches, getting the car cleaned, etc. These costs will be in line with BVRLA guidelines for fair wear and tear. 
• Storage of the vehicle - Including transportation to put the car into storage. It costs the lease company money to store the vehicle, assuming they don't want to sell it right away. They won't be happy footing the bill so this falls to you!
• Taxes associated with leasing - Since road tax is included in the cost of the lease , you might have to pay any outstanding tax left on the car. 
• Negative equity - In some particularly harsh lease contracts, they will charge you the difference between the lease amount and the residual value of the car.

This is a pretty harrowing list, but it's not surprising. Lease companies really don't want you to terminate the contract early. These fees are in place to highly discourage you from getting out of the lease. 

It's worth noting, your early termination penalties most likely won't include all of the above, but in pretty much every lease you will be required to, at the very least, pay the remaining payments and an early termination fee. 

This isn't helpful if you can't afford to make your lease payments. You're surely not in a position to fork out a couple of grand to buy yourself out! 

If you're rolling in it and just want a newer model, paying the remaining payments and the termination fee is the simplest way to end a car lease early.

As always, make sure you look over your car leasing agreement extremely carefully before signing it . Make sure that you're certain you'll be able to make the lease payments for the duration of the contract, and that you're happy with the car and your mileage limit.

Is there a cheaper way to get out? Can I buy and sell the car?

Depending on your circumstances, and your lease, you might be able to get out of your car lease with minimal penalties. One option is to buy your car outright and sell it on - but only if the leasing company agrees to this.

You likely won't be getting it at a bargain price, but this option can be cheaper than paying those eye-watering penalties. For instance, imagine you take out a lease on a Mazda but have decided that you're really more of an Audi guy/gal.

To get out of the lease early, imagine that you're looking at £2800 worth of fees. This consists of 12 months of your remaining repayments at £200 a month, plus a termination fee. 

You discover that you can buy the car for £12,000 and sell it on for around £11,000. Because the car is in excellent condition, and you've barely done any miles, your cost of exiting the lease is £1000.  This is obviously a far better scenario than paying almost £3000 in penalty fees! 

To do this, you'd need to request the buyout amount from the leasing company, making sure you get it in writing. Then check out the market value of your car, and see if it's worthwhile. You can use a tool like Regit to find out the value of your car. 

Unfortunately, you're going to need a bit of luck for this to work for you. If the depreciation on the car you're leasing is dire, and the buyout price is significantly higher than the market value, then it wouldn't make any sense to buy it and sell it on. 

If the difference is cheaper than the lease termination penalties, then go for it!

Lease trading is where you pass your lease on to someone else. Of course, you will need to make sure that this is allowed in the terms of your lease agreement. Often, the lease company just wants to be paid and doesn't care who's paying them. 

Why would anyone take on this lease that is causing you such misery? Well, many buyers are interested in a short term lease at a decent price. 

Say you have 8 months left of a lease and you pay £180 a month. In the current market, it's impossible to get an 8 month lease that cheap. If the buyer only needs the car for the 8 month period, a lease transfer is a great deal for them, and it also gets you out of a bad spot as well. It's a win-win! 

If you're interested in a car lease transfer , use a website like Swap-A-Lease that will let you list your car. This is much the same process as selling your car online. You need to list your car and it's info on the site, including what's left on the lease. You then have to find a buyer who's interested in your lease. 

Of course, websites like Swap-A-Lease will charge you a fee for listing the car. On this site, you will have to pay £39.99 to list your car, and then the cost of 2 months rental if you successfully transfer the lease. So if your monthly lease is £180, you would have to pay a ‘successful transfer fee’ of £360 to Swap-A-Lease. 

While this seems like a great option, be warned that it's not for everyone. Some lease agreements will not allow it and will require that the original holder of the lease - i.e. you - needs to be in the arrangement until it's terminated. 

In this case, even if you trade your lease, you will be held responsible for costs at the end of the lease, such as damage to the vehicle and excess miles. Read the details of your lease agreement carefully before considering swapping your lease. 

While this isn't a sensible option if you're changing lease due to financial difficulties, it's a fairly decent deal for those who just want a new car. 

Some lease companies will let you take out a new lease and carry on the remaining monthly payments from your last one. This can make your monthly repayment quite a bit more expensive, of course.

For example, say you have 8 months left on your lease and you pay £200 a month. You owe the leasing company £1600. If you take on another lease at the same monthly price for 3 years, your total repayment over the lease agreement is £8800 (not including transfer fees for the transaction, or a down payment, etc.).

Unfortunately, because you owe the lease company £1600 from your first lease (8 months of repayments), you’d need to settle this in the first 8 months of your lease contract. 

This would make your first 8 payments a whopping £400 a month, and then £200 from then on. If you're truly desperate for a shiny new state-of-the-art car, paying extra for 8 months might be worth it for you.

This is the nuclear option. When you absolutely, categorically can't make your payments, you're going to need to default on your loan.

In this scenario, you need to contact your lease company and tell them you want a voluntary repossession of the car. This comes with fewer penalties than a forced repossession, where you refuse to give the car back and don't make the lease payments... not a great idea!

At this point, your finance company will let you know your options. In most cases, the company will want to work with you and can offer arrangements to let you keep the car and perhaps pay them off over a longer-term (sometimes with interest). If this isn't an option, you will need to hand the car back.

Of course, you're then liable for the remaining lease payments and will have to pay back the debt at some point. This is obviously a very stressful situation to be in. Defaulting on your car lease will punch a huge dent in your credit score and may reduce your chances of getting a mortgage, or a personal loan if you need one. If you're stuck in this situation, it's important that you seek debt advice.

Whatever is the cheapest for your circumstances! 

To recap, if you decide that you absolutely want out of your lease, whether you can't pay or just want a new vehicle, you should take the following steps: 

• Work out what your penalties will be for early termination. Read over your lease contract and calculate what the fee might be. 
• If this fee is astronomical, work out the buyout price of your car and the current market value. If this is cheaper than the penalty fees, then happy days. If it’s not, you might need to take one of the other 3 options.
• Transfer your lease to someone else using a website like Swap-A-Lease. 
• If you're in a bad spot and are completely stuck and can't pay the lease payments, then give the vehicle up for voluntary repossession and seek some advice on how to handle the debt. 

Of course, the best option is to not need to end a car lease early at all! Make sure you take out a lease that is affordable for your budget, and that you're not struggling to pay.

If you put a private plate on your financed car , you'll make arrangements with the leasing company or new lessee to make sure you get your plate back.

Check out Lease Fetcher to compare lease deals . You'll find the cheapest personal car leasing and business car leasing deals available right now through us.

What Lease Ltd trading as Lease Fetcher and What Lease is authorised and regulated by the Financial Conduct Authority (774111). We act as a credit broker not a lender.

We can introduce you to a limited number of lenders who may be able to offer you finance facilities for your purchase. We will only introduce you to these lenders. We may receive a commission payment from the finance provider if you decide to enter into an agreement with them. You may be able to obtain finance for your purchase from other lenders and you are encouraged to seek alternative quotations. If you would like to know how we handle complaints, please ask for a copy of our complaints handling process. You can also find information about referring a complaint to the Financial Ombudsman Service (FOS) at financial-ombudsman.org.uk.

Can You Turn In A Lease Early

Here we will go over how you can turn in a lease early . Leasing has been a rapidly growing trend over the last decade. However, educating the consumer on leasing hasn’t. Here we will break down the turn in process of a lease. We will also cover the popular question “Can You Turn In A Lease Early.” In my 20 years of experience it is in a lessees best interest to to enter the lease with all the facts. Some dealerships will flat out lie about how a lease works to get the quick sale. The fact is you should always enter into a lease expecting to follow the terms exactly. This is not only limited to term, But also the mileage. So do not be led to believe that these two factors are not important. That isn’t to say, turning in your lease early is impossible.

You can turn in a lease early. Fact is, the ability to do so without penalty is determined by the market at that time. When it comes to getting out or your lease early. To simplify, it is similar to trading in a car you still have a loan on. To get out without it costing you the vehicle value has to be higher than the loan/lease balance. This is just an example. In fact, a lease balance is called the lease buyout. A lease buyout usually includes any remaining payments plus the residual value. Commonly, known as the leases guaranteed purchase price.

What Happens If You Turn In A Lease Early?

So what happens if you turn in a lease early? Most leasing companies give the option to turn the lease in early. This is an early termination. An early termination will usually involve some fees and penalties. You can usually get an idea of this amount by contacting the leasing company or the dealer. If you are contacting the leasing company be sure to have your current mileage on hand. So that, they can get you an accurate quote. Depending on the market the early turn in may or may not be your best route.

You will want to look at your options before making this decision. Fortunately, a lease generally gives you a few options to choose from. Most leasing companies have these options.

1. Walk Away option

The walk away option is one option you have when you have went full term. This is where you basically turn in the car and walk away. Of course this option is not relevant if you are trying to get out early. This option is great if you have went full term and the market on the vehicle has went down more than expected. At this point what would be negative equity on a loan is the leasing companies problem. This is one of the reason a lease appeals people that plan on trading on a regular basis. It gives you a real accurate view of what you are going to spend to drive the vehicle for a set period.

2. Lease Buyout/Dealer Buyout

The Lease Buyout/Dealer Buyout option is a great option on a lease. This option allows the lease to take advantage of possible equity in the vehicle. Additionally, gives the Lessee the purchase option. This option gives you a price set in stone at the beginning of the lease. This depending on the market value of your vehicle gives you the possibility of having equity in your lease. Keep in mind that the contracted guaranteed purchase price is after all payments are made. You can get an early buyout quote. Don’t be surprised when it is higher than your contracted guaranteed buyout.

Don’t be discouraged by this. Sure the amount is going to be higher. By the same token, the vehicle is going to have less age and most likely less miles than at the originally anticipated turn in time. This in turn, will make your vehicle worth more than it would be at the full term turn in date and mileage. Depending on the market you may be in good shape at this time.

Your Vehicle Value Vs The Buyout

You will want to get both the early termination quote and the buyout quote from your leasing company or dealership. With your buyout in hand you should do a little research and get an idea of what your wholesale value is. The wholesale value is going to be what the value of your vehicle is to a dealership. You can find an idea of this value at a number of different sites. Edmunds is a very reputable site with an easy to use appraisal tool. Check out their site here https://www.edmunds.com/appraisal/ . Kelly Blue Book is also a well known resource. They also have an easy to navigate appraisal tool. Check out their site here https://www.kbb.com/whats-my-car-worth/ .

Once you have the wholesale value of your vehicle you can compare it to your buyout. If this difference is better than the early term you have a trip to the dealer to make. Best route here would be to call the dealership and make an appointment to have your vehicle appraised for purchase. Let them know upfront you are in a lease and are looking to sell your vehicle to them to get out early if the number is right. If you are in an equity position there is no reason you should not walk away with a check. If you have more than one of that type of franchise dealer in your area you can shop around for the best offer.

Other Options For Getting Out Of Your Obligation Early

Some Leasing companies give you additional options. These options may not apply to you and your contract. If the above options do not work for you then you may explore these other options for getting our of your obligation early. You may want to contact your leasing company and see if these options apply to you.

1. Transferring A Lease

Transferring a lease may be the perfect option if you have someone wanting to take over the remainder of your obligation. If your leasing company permits this. You will simply have to find a credit worthy person that is interested in finishing you lease out. Whether it is a family member, friend, co-worker or a complete stranger. This may be the perfect fit for you and the other party. Sometimes finding the right person for this arrangement can be tough to find. There are a number of sites you can use for this as well. Sites such as www.leasetrader.com and  www.swapalease.com are known to help with this. Although I personally have no experience with these sites they seem to be popular on the web.

2. Sell Your Vehicle To An Individual

With your buyout and an idea of what the market is you may decide to sell your vehicle. Whether it is a family member, close friend or a complete stranger you may have the option to sell your vehicle. Your leasing company may make this an option of not. It would be a good idea to contact them and make sure this is an option.

3. Sell Your Vehicle To A Dealership

A dealership might be the easier route when selling your vehicle. They generally have great experience in dealing with the leasing companies. They can also make it a lot easier than selling to an individual. Because of, the fact they can generally EFT the funds to the leasing company and have your vehicle paid of in the same day. If you are interested in this. I would reach out to Gaddis Automotive Inc. This is a Chrysler, Dodge, Jeep and Ram dealer in Indiana. They purchase leased vehicles from all over the country. They can do all of this over e-mail and via Phone. The Sales Manger email is [email protected] . if he can help he will make the process super simple.

Some of the times this option can turn into extra money in your pocket. Sam at Gaddis Automotive appreciates the opportunity to purchase your vehicle and doesn’t mind righting an extra check to the owner if the equity is there. You may also like our article on How To Buy Out A Lease . In this article we go over the different options you have in buying out a lease.

How To Turn In A Lease Early

Sometimes because of the market and personal situations Turning the lease in early is unavoidable. So we are going to walk you through How To Turn In A Lease Early. This process is not hard but knowing how to take the right steps at the right time can hopefully make turning in a lease early less of a pain.

1. Contact The Dealership

You will want to call the dealership in which you want to turn the leased vehicle into. You will most likely want to speak with the Finance Manager or the Sales manager. You will want to explain the situation and set a time to return the lease. They will generally be glad you called in advance and this will save you time once you arrive. Depending on the state you may want to retrieve your plate and registration at this time.

2. Contact The Leasing Company

Once you have turned in the leased vehicle you will want to contact the leasing company and let them know you have turned the vehicle in at the dealership. The leasing company will usually send someone to the dealer for an inspection and the vehicle will go to auction. The Leasing company will eventually send you a end of lease bill. This bill will most likely include some of your remaining payments and any excessive wear on the vehicle at the time of return.

How Will Turning In A Lease Early Affect My Credit?

How and will turning in a lease early affect my credit? This is a good concern. If left unchecked turning in a lease early can affect your credit negatively. Once you receive the final statement there will need to be some sort of arrangement for payment made. Usually the leasing company wants the amount paid in full. In some situations they will make payment arrangements. If this bill goes unpaid it will effect your credit similar to late payments or even a repossession.  Keeping in contact with the leasing company is very important at this point. You need to know if they intend on negatively reporting to the credit bureau. You will need to head them off and try and prevent any negative reports if possible.

Extending The Warranty On Your Leased Vehicle

Sometimes Extending the warranty on your leased vehicle is a good idea. If you are in a lease that is longer than 36 months or over 36,000 total miles than there is a good chance you are going to run out of warranty before the end of the lease. This usually isn’t in the plan when going into the lease. Seeing how part of leasing is staying in a newer vehicle. There is a answer to this. You can look into extending the warranty on your leased vehicle. There are generally short term extensions available for situations like this.

What Extended Warranty To Purchase For Your Leased Vehicle

Most manufactures have some sort of factory backed company to cover their vehicle. GM has General Motors Protection Plans for all their brands. FCA (Fiat Chrysler America) has a long list of Brands to cover in North America. Mopar Vehicle Protection covers all Chrysler, Dodge, Jeep, Ram, Fiat and Alfa Romeo brand vehicles in North America. Mopar also offers warranty on just about any brand vehicle. They are also recognized at just about any type of franchise dealership in the country. You may wonder how does an Alfa Romeo Extended Warranty fall under Mopar vehicle protection? The fact is Fiat Chrysler America owns Alfa Romeo. When Fiat acquired Chrysler in the making of FCA they decided to use Mopar’s 40 plus years of experience with Manufacturer Warranties to help take care of their other brands.

Mopar Warranty Options

Visit our different plan site pages for full details

• Maxcare Warranty
• Added Care Plus Warranty    
• Powertrain Care Plus Warranty
• Mopar Road Hazard Tire & Wheel Protection

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• Maxcare Warranty Brochure  
• Added Care Plus Warranty Brochure    
• Powertrain Care Plus Warranty Brochure
• Lift Kit Coverage Brochure

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Chrysler Extended Warranty

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