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Here’s How To Break Your Car Lease Early

It seemed like a good idea at the time: lease a car in order to get a great deal. How else could you afford that brand spankin’ new car, or that luxury vehicle you’ve been eyeing?

But unfortunately, life isn’t always a smooth highway, and suddenly you find yourself wishing you could get out of the lease you once were thrilled to get. Perhaps your income has changed dramatically, or you’re planning to move out of the country to take advantage of a new employment opportunity. Or maybe you’ve come to realize you’ve bitten off more than you can chew financially.

First and foremost, don’t simply stop making your lease payments. Yes, you can ultimately end the agreement in this way, but your credit rating will take a major hit. Not making lease payments is the equivalent of defaulting on a car loan, or any type of loan:  It can significantly impact your ability to secure a loan in the future.

Breaking your car lease can be costly and not particularly easy. The good news? It can be done, and with the right information you can limit your financial losses and make the lease-breaking process go as smoothly as possible.

Photo: Shutterstock/Opat Suvi

The Costs Of Breaking A Lease And Turning Your Car In

The terms of a car lease help to ensure that the car dealer makes a profit — it’s that simple. So it stands to reason that if the lease is terminated early, it’s likely those profits will take a hit, which means the dealer probably won’t make terminating the lease easy for you.

The first step is to review your lease agreement and determine if you’re responsible for making all of the payments, even if you’re turning the car in early. If you’re accountable for all of the remaining payments, check to see if those payments can be pro-rated; in some instances, you may be required to pay only a portion of the remaining payments. Payments will be higher if you want to terminate earlier in your lease and they’ll reduce the closer you get to the original turn-in date.

Some dealers offer an early termination fee instead of requiring repayment for missed leasing months. But in some instances, the fees can just about equal a large portion of the total missed monthly payments; in addition, you could be responsible for preparing the car for resale, taxes, storage and transportation, and several other fees.

Photo: Shutterstock/Africa Studio

Other Options

Buy And Resell The Car


Most lease agreements allow for a driver to purchase the car at some point during the course of the lease. If you’re looking to get out of your lease and the resale value of the car equals or exceeds the cost of terminating the lease, consider buying the car outright.

You can then resell the car and recoup not only the cost of the purchase but also any dealer early termination fees.

Rollover The Lease Into Another Car

Dealers might be more receptive to letting you out of a lease early if you’re considering leasing or buying a different vehicle through them. In most instances, car dealers want to keep good customers coming back through the years and driving their vehicles for the long term; to that end, they may be willing to offer lease terms you’ll find more manageable.

Photo: Shutterstock/shisu_ka

Transfer The Lease To Another Driver

Transferring your lease to another driver is an option, if you’re looking to get out of your lease agreement early. Be aware, however, that some lease agreements allow for lease transfers, while others don’t. Finding someone to take over your lease isn’t as far-fetched as you may think. Some individuals find that a shorter-term agreement and the limited amount of remaining payments suits their budget.

Lease-swapping sites such as LeaseTrader and Swap-A-Lease match up lease holders looking to get out of their commitment with others interested in taking on a short-term lease. Be sure to check the details of your lease agreement to determine if you’ll still be responsible for some of the payments on a transferred lease, or if you’ll be listed as a co-party and still bear responsibility for the car.