Can You Get Out of a Car Lease Early?

Leasing a vehicle offers several advantages over purchasing, from shorter contracts to lower monthly payments. For some people, it’s the right choice. 

But what if you want to end a car lease early? Can you turn in a leased car early, or buy it out before the end date? Is there a way to turn in a lease early without penalty? If you need a different vehicle or no longer want to be bound by restrictive contract terms, ending your car lease early can be more complicated (and expensive) than selling a vehicle you purchased. It’s important to know what you might experience.

Whatever the reason, if you’re thinking about getting out of a car lease, this guide can help you decide whether ending a car lease early is the right course of action for you.

Review the Paperwork

If you’re thinking of turning in your leased car early, it’s essential that you understand the car lease termination fees associated with ending a lease. You may incur costs and penalties such as early termination fees, covering remaining payments and paying to prepare the car for sale. So, before you make a decision, review your contract carefully. After reviewing the contract, you might discover it’s less expensive to wait until the lease ends.

Understand Your Options

Returning the vehicle to the leasing company is just one option for getting out of a car lease. While this is the easiest way to get out of a lease, it’s also likely the most expensive, because you’ll be responsible for all of the fees outlined in the contract.

Don’t rush into the decision to end your car lease early. Before you return your car, consider all of your options. Here are four options for getting out of a car lease early that might work for you.

Transfer the Lease 

See if the dealership allows a lease transfer or swap. If it does, look for someone to take over the lease instead of just turning in the leased car early. Online lease-swapping companies can also help you find a suitable lessee — but remember to assess costs such as commissions and fees before signing up.

Use the Vehicle as a Trade-In 

If you’re thinking about getting another vehicle, ask the dealership about rolling your current lease into the purchase or lease of another new vehicle. Treating your currently leased vehicle as a trade-in might help avoid early termination penalties.

Sell the Car 

The vehicle you no longer want might be just the one another buyer needs. Ask the dealership for the lease payoff amount and compare it to the value of the vehicle. If the payoff is lower or equal to the car’s value, sell the vehicle to cover the payoff.

Buy the Car 

Maybe you want to keep the car, but no longer wish to abide by the lease terms for maintenance or mileage. If so, consider buying it. Every lease has a “buyout” clause for this scenario. But be warned: The buyout amount could exceed the value of the car, forcing you to pay more than the car is worth. So, check values carefully if you’re considering this option.

Prepare the Car

Whether you plan to return the vehicle, transfer the lease or sell the car, your vehicle will need to be in peak condition before you take action. Make sure you give it careful attention. Wash and detail the vehicle. Get the oil changed, top off the fluids and check the tires — and replace anything that needs to be replaced. A clean, serviced vehicle will fetch a higher sales price or incur fewer penalties than one needing extra work.

And if you’re thinking about your next car, make an informed decision. Use our online calculator to determine whether it’s better to buy or lease your next vehicle, depending on your needs and financial situation.

Get the Coverage You Need

Whether you decide to keep leasing or you opt to move on to a different vehicle, make sure you’re covered. Connect with a local Farm Bureau agent to ensure you have the auto insurance coverage you need.