How to Get Out of a Car Lease: Is it Even Possible?

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Maybe you’re relocating to another country, have hit hard financial times, or simply don’t like your current vehicle. Whatever the reason, you must get out of your car lease as soon as possible. But is it even possible? If so what are the available options to break the lease, can you actually sell a leased car, and is it possible to trade in a leased car? We break it all down below to help you make the right decision.

• What are the options to get out of a current car lease?
• Can you sell a leased car?
• Can you trade in a leased car?

Keep in mind, with such low used car inventory right now, your leased car’s residual value (an estimate of how much the vehicle is worth once the lease contract is up), may work in your favour, despite an expected plunge in used car prices. So a complete buyout might be a good move, discussed more below.

So, is it even possible to get out of a car lease?

Short answer? Yes, it is possible to get out of a car lease, but it may come with some consequences and fees. One option is to transfer the lease to someone else, also known as a lease transfer or lease assumption. This involves finding someone who is willing to take over the remaining lease payments and meet the requirements of the leasing company.

Another option is to negotiate a buyout with the leasing company, either by paying off the remaining lease balance or trading in the vehicle for a different one. However, both options may come with fees or penalties, so it’s essential to review the lease agreement and consider all options before making a decision. We’ll touch more on this below.

What are the options to get out of a current car lease?

To get out of a car lease, there are several options you can consider, including a lease transfer (and associated risks), early termination, buyout, and negotiation. Here’s a closer look at each of them.

1. Lease Transfer

This involves finding someone who is willing to take over the remaining lease payments and meet the requirements of the leasing company. The person taking over the lease will need to pass a credit check and satisfy the leasing company’s requirements, and you may also need to pay a transfer fee. Websites like LeaseTrader and SwapALease can help you find someone to take over your lease.

Lease Transfer Risks to Keep in Mind

Keep in mind, however, there are some risks associated with a car lease transfer. Here are some of the main risks to consider:

Creditworthiness of the New Lessee: When you transfer a lease, the person taking over the lease will need to meet the credit requirements of the leasing company. If the new lessee has poor credit, they may not be approved by the leasing company, leaving you responsible for the remaining lease payments.

Lease Transfer Fees: Some leasing companies charge a transfer fee when you transfer a lease to another person. This fee can be several hundred dollars and can eat into any savings you might have gained by transferring the lease.

Lease Contract Restrictions: Some lease contracts have restrictions on lease transfers, such as limits on the number of transfers allowed or the geographic location of the new lessee. Make sure to check your lease contract before pursuing a transfer.

Liability for Damages: If the new lessee damages the car or fails to make payments, you could be liable for any remaining costs or damages. It’s essential to ensure the new lessee has insurance and will be responsible for any damages they cause.

Time and Effort: Transferring a lease can be time-consuming and requires paperwork and coordination with the leasing company and the new lessee. It’s essential to ensure you have enough time to complete the transfer and that the new lessee is reliable and committed to taking over the lease.

Before transferring a lease, it’s essential to consider these risks and take steps to mitigate them carefully. You may also want to consult with a financial advisor or an attorney to help you make an informed decision.

2. Early Termination

You can terminate the lease early, but this will typically come with an early termination fee, which can be quite substantial. You’ll need to check your lease agreement to see what the fees are and whether they are worth paying.

3. Buyout

You can negotiate a buyout with the leasing company by paying off the remaining lease balance or trading in the vehicle for a different one. This may be a good option if you want to purchase the car at the end of the lease anyway.

At time of writing, because used cars have increased in value by almost 48% due to high demand and shortage of preowned inventory, you might actually have equity in your leased vehicle. Consumer Reports makes a good case for buying your leased car.

4. Negotiation

You can try negotiating with the leasing company to see if they will waive or reduce the early termination fees. This may be more likely to be successful if you are planning to lease or purchase another vehicle from the same company.

Can you sell a leased car?

You can, but it can be more complicated than selling a car you own outright. When you lease a car, you don’t actually own it but have the right to use it for a specific period. Here are some things to consider if you’re thinking about selling a leased car:

Buyout Price

The leasing company will typically provide a buyout price, which is the amount you’ll need to pay to purchase and own the car outright. This buyout price may be higher than the car’s current market value, so you’ll need to decide if it makes financial sense to buy and sell the vehicle.

Transfer of Ownership

You’ll need to transfer ownership from the leasing company to the buyer to sell the car. This can be a more complicated process than selling a car you own outright, and you may need to work with the leasing company and the buyer to complete the transfer.

Title and Registration

When you lease a car, the leasing company typically holds the title and is listed as the owner on the registration. To sell the car, you’ll need to get the title from the leasing company and transfer it to the buyer, which can take time and paperwork.

Lease Contract

It’s important to review your lease contract to see if there are any restrictions on selling the car, such as limits on the number of miles or wear and tear. You may also need to pay any outstanding fees or charges before selling the car.

Selling a leased car can be a complex process, so it’s essential to carefully consider your options and review the lease contract before deciding. You may also want to consult a financial advisor or an attorney to help you navigate the process.

Can you trade in a leased car?

Like any other car, you can trade in a leased car. However, the process can be a bit more complicated, and there are some things to consider before trading in a leased car:

Buyout Price

To trade in a leased car, you’ll first need to determine the buyout price, which is the amount you’ll need to pay to purchase the vehicle and own it outright. This buyout price may be higher than the car’s current market value, so it’s essential to determine if it makes financial sense to buy the car and then trade it in.

Equity

If the car is worth more than the buyout price, you may have equity in the car that can be used as a down payment on a new vehicle. However, if the car is worth less than the buyout price, you may need to pay the difference out of pocket.

Lease Contract

It’s important to review your lease contract to see if there are any restrictions on trading in the car, such as limits on the number of miles or wear and tear. You may also need to pay any outstanding fees or charges before trading in the car.

Dealership Policies

Not all dealerships accept lease trade-ins, so it’s essential to check with the dealership beforehand to ensure they will take the car as a trade-in.

Timing

If you’re close to the end of the lease term, it may be more cost-effective to return the car and lease or purchase a new vehicle.

Overall, trading in a leased car can be a good option if you want a new one. Still, it’s essential to carefully consider your options and review the lease contract before deciding. You may also wish to consult a financial advisor or an attorney to help you navigate the process.