Is it possible to get out of a car lease before the end of the contract? This is a common question from those who are currently leasing but need to need to terminate early.
There are several options for exiting a lease, depending on the individual situation and how near the end of the lease term. Some options can be expensive, and may not be practical. Others are not so expensive, and one way is very easy and has only a small cost.
How To End a Car Lease Early
Ending a lease early is more than simply paying a penalty fee and returning the car.
All lease contracts have a section that describes the cost of an early “payoff.” Essentially, it says you owe all remaining payments, less finance charges, and less the “realized” value of the car, which is usually the actual auction sale price or an estimate thereof.
If you are in the early or middle stage of your lease, this payoff amount can be surprisingly large, since your low lease payments don’t pay down the lease balance very fast. Leases are nearly always “upside down” unless a large down payment had been made at the beginning of the lease.
You have to call your lease finance company for the termination payoff. It’s impossible to calculated it accurately yourself.
Having said the above, if you are in the later stages of your lease, it might be less expensive to simply make all your remaining payments early and return the car.
Before you do it, however, check with KBB.com and NADAguides.com to find the value of your vehicle. If you see that the value is greater than the payoff or sum of remaining payments, you can sell the car (with the lease company’s permission), make the payoff, and pocket the remaining money.
Finally, there’s one more option to consider. It’s called a lease takeover, lease assumption, or lease trade.
If you can find someone to take over your lease (with the lease company’s permission and involvement), there’s only a small transfer fee to be paid.
To find a “buyer” you can use an online service such as Swapalease that specializes in matching up lease “buyers” and “sellers.”