How to Get Out of a Car Lease Early

When you initially signed your vehicle lease, you probably intended to make every payment of the lease term. But sometimes life changes, and you may find yourself needing to get out of your car lease early.

woman in car

Maybe you’ve had some lifestyle changes, and the style of your vehicle is no longer a good fit. Or, perhaps you’re having trouble making your monthly payments.

Whatever the reason, you need a solution—and there are ways to get out of your car lease. They aren’t always cheap or ideal, but the good news is that you have several choices.

Even if you need to get out of your lease quickly, take some time to read your lease contract and understand your options. Some of these options are more expensive than others, so it’s essential to choose the right option for your specific circumstances.

Early Lease Termination: What You Could Owe

Ending a car lease early can seem like a daunting prospect, especially when it comes to the financial implications. If you’re considering this route, you’ll need to have a clear picture of the potential costs involved. This section aims to break down these costs more transparently so that you can make an informed decision.

Early Termination Fees

Most car leases include an early termination clause, which outlines the fees you’ll owe if you decide to end the lease before its scheduled conclusion. These fees can vary significantly based on your car lease agreement, but generally fall into two categories:

  • Flat termination fee: A predetermined amount that you agreed upon when signing your car lease. This fee can range anywhere from a few hundred to several thousand dollars.
  • Decreasing scale fee: A fee that reduces over time, reflecting the decreasing value of the vehicle. In this case, the closer you are to the end of your car lease, the less you’ll pay to terminate early.

Negative Equity Payments

When you lease a car, the payments are structured around the vehicle’s depreciation. If you terminate the car lease early, the car’s actual value might be less than the remaining payments due. This difference is known as negative equity, and you might be required to cover this gap. For instance, if the market value of the car is $20,000, but you still owe $23,000 in lease payments, you’ll need to pay the $3,000 difference.

Additional Fees to Anticipate

Beyond the early termination fee and potential negative equity, several other charges could accumulate, including:

  • Remaining payments: You might be responsible for all remaining payments on your car lease, depending on your contract’s specifics.
  • Excess wear and tear: Charges for any damage to the vehicle beyond the normal wear and tear expected during the lease term.
  • Excess mileage: If you’ve exceeded the mileage limit specified in your lease agreement, expect to pay for those additional miles.
  • Disposition fee: A fee to cover the car’s preparation for resale, often applied when you return the vehicle to the dealership.

Calculating Your Total Cost

To estimate your total cost for early lease termination, start by reviewing your lease agreement for the specific fees mentioned above. Then, follow these steps:

  1. Determine the early termination fee: Check your contract for a flat fee or use the decreasing scale to calculate what you owe.
  2. Calculate negative equity: Compare the car’s current market value (which you can find on sites like Kelley Blue Book) against the remaining balance of your lease payments.
  3. Add up additional fees: Factor in any costs for excess mileage, wear and tear, and the disposition fee.

Here’s a simplified example:

  • Early Termination Fee: $1,000
  • Negative Equity: $3,000 (remaining lease payments minus car’s current value)
  • Excess Mileage and Wear and Tear: $500
  • Disposition Fee: $300
  • Total Estimated Cost: $4,800

By understanding and calculating these potential costs, you’ll be better equipped to decide whether early lease termination is the right financial move for you. Remember, while ending a car lease early can offer freedom and flexibility, it’s important to weigh these benefits against the financial responsibilities you’ll face.

Options for Returning Your Leased Vehicle Early

Deciding to return your leased vehicle ahead of schedule opens up several paths, each with its unique set of advantages and drawbacks. Remember to weigh these options carefully to find the one that aligns with your financial situation and future needs.

Below, we examine the most common strategies for early lease return, ensuring each is presented with an introductory paragraph followed by the pros and cons to guide your decision-making process uniformly.

Returning the Car to the Dealership

Opting to return your leased vehicle to the dealership represents the most direct path for early termination. This method is straightforward, involving the least amount of hassle on your part, but it comes with its own set of financial implications.


  • Simplicity: You simply return the vehicle to the dealership, and they handle the rest, including the termination of the car lease.
  • Immediate solution: Ideal for those who need to exit their lease quickly without the hassle of finding a buyer or negotiating a trade.


  • High costs: This option can be costly. You’ll likely be responsible for early termination fees, negative equity, and any additional charges for excess wear, tear, and mileage.
  • Financial impact: The immediate and potentially high costs involved can significantly affect your financial situation.

Transitioning to a New Vehicle

Transitioning to a new vehicle through the same dealership can offer a seamless way to change your vehicle to better suit your current needs. This option involves ending your current car lease and either leasing a new vehicle or purchasing one from the dealership.


  • Convenience: Dealerships are often willing to facilitate the transition, making it a smooth process.
  • Potential incentives: You might be eligible for dealer or manufacturer incentives, reducing the overall cost of getting into a new vehicle.


  • Increased financial burden: The remaining balance from your current car lease might be rolled into your new lease or loan, potentially increasing your monthly payments.
  • Long-term commitment: You’re committing to a new vehicle and financial agreement, which might not align with your goal of reducing expenses.

Lease Trading or Swapping

Lease trading or swapping involves transferring the remainder of your car lease to another individual. This can be an effective way to exit your lease early if you can find someone interested in taking over the terms of your lease.


  • Cost savings: Can be more cost-effective than paying early termination fees, especially if you find someone to take over your lease quickly.
  • Freedom from payments: Successfully transferring your lease relieves you from the monthly payments and other lease obligations.


  • Potential fees and hassles: Listing your lease for transfer and completing the transfer process can involve fees and complexity.
  • Leasing company approval: The transfer is subject to the approval of the leasing company, which can introduce uncertainty.

Pull-Ahead Lease Offers

Pull-ahead lease offers are designed by dealerships and manufacturers to encourage lessees to end their current lease early and begin a new lease. These offers can be particularly attractive if you’re looking to upgrade or change vehicles without waiting for your current lease to end.


  • Financial incentives: Many of these programs waive the remaining payments on your current lease, offering a cost-effective way to transition to a new vehicle.
  • Smooth transition: Facilitates a hassle-free move to a new lease, often with minimal paperwork. It’s an excellent way for lessees to stay with the same brand or dealership.
  • Avoidance of lease-end costs: Potentially avoid costs associated with excess wear and tear or over-mileage fees.


  • Eligibility restrictions: Not all lessees will qualify for these programs, as eligibility often depends on the leasing company, payment history, or time left on the current lease.
  • Limited vehicle selection: The choice of vehicles available under pull-ahead programs may be limited, requiring you to evaluate whether the options meet your needs.
  • Long-term cost assessment: While initially reducing costs, it’s essential to examine the terms of the new lease carefully to ensure they don’t lead to higher expenses over time.

Each of these options offers a different balance of advantages and drawbacks. When ending your car lease early, it’s important to evaluate your personal and financial situation, the specifics of your current lease agreement, and the terms of any new agreement you’re considering. Making an informed decision will help you manage the process with confidence and choose the option that best suits your needs and circumstances.

The Buyout Option: When to Purchase Your Leased Car

Buying your car from the dealer is ideal in a situation where you need to quickly get out of the financial obligation of your lease. Many lease contracts have a buyout option, allowing you to buy your vehicle during or at the end of the lease for a predetermined price.

Your lease contract will specify this buyout price, which is the vehicle’s residual price. This residual price is usually non-negotiable and is based on the sale prices for your car’s make and model. Cars in high demand tend to have a higher residual price than less popular cars.

Taking a lease buyout option is only a wise choice if your car’s residual price is less than the car’s resale value. For example, if your car’s residual price is $20,000, but its resale value is $17,000, you’ll lose money by buying your car.

If that same car has a resale value of $21,000, the buyout option will let you buy the car and then resell it to a third party, ending your lease. Refer to a site like Kelley Blue Book to determine your car’s resale value.

If you decide that a buyout is right for you, you’ll need either cash on hand to purchase the vehicle or you’ll need to apply for an auto loan. If you plan to sell your car quickly, verify that you won’t be penalized for paying the auto loan back early. And if you take a buyout before your lease’s end, be prepared to possibly pay early lease termination penalties, as well as taxes and registration fees.

Transferring Your Lease to Someone Else

With lease trading or swapping, you can transfer the remaining term of your lease to a buyer who wants a shorter-term lease. Sites like LeaseTrader facilitate this transfer, keeping things simple for you.

These sites charge listing fees, and you may need to cover a lease transfer fee ranging from $300 to $500. But, this can still be a low-cost way to get out of a car lease early.

Benefits of Lease Takeovers for Buyers

Buyers look for lease transfers for many reasons:

  • They want a short-term lease.
  • They want to be able to buy a vehicle at a discounted price at the end of a lease.
  • They lease swap often, so they get to buy a different vehicle often.
  • They would like to avoid paying a large down payment or security payment at the beginning of a lease.

Certain car leases are more appealing to transfer and swap buyers:

  • Leases that allow for generous monthly mileage.
  • Leases of unique vehicles, or models that are difficult to find.

Before signing up, first verify that you are allowed to sell the lease. Some leasing companies prohibit this. If your contract refers to language about “transfer of equity,” then you may be responsible for your lease payments even after a transfer if the buyer ever doesn’t make those payments. If your contract specifies a “full lease assumption,” then once you transfer your lease, you’ll be free of your obligations.

Defaulting on Your Lease: Outcomes and Alternatives

While defaulting on your lease is an option, it has many adverse outcomes. For example, if you stop making payments on your lease, your lease provider could repossess your car. Sometimes lease providers use devices that remotely deactivate your car’s ignition system, making it easier to repossess the vehicle.

The laws surrounding these starter interrupt devices vary from state to state, and you may or may not receive a warning before your vehicle’s ignition is disabled.

Early Termination Fees

If you default on a car lease, you could still be responsible for early termination fees. If you can’t or don’t pay those fees, the leasing company can report your delinquent charges to the credit bureaus, which will negatively affect your credit score.

With a poor credit score, you’ll have a hard time getting another lease or getting approved for other types of credit in the near future. If you need to apply for a car loan with bad credit, your credit score may mean you’ll have higher interest rates or even be denied the loan.

If you have any choice, don’t default on your lease and find another way to get out of the lease agreement, instead.

The Best Choice for You

Ultimately, the best option for you will depend on why you want to end your lease and your financial situation. If you need to end a lease because you’re in financial hardship and can’t make the monthly payment, start by talking to your lease provider.

Many of these companies will try to work with you, especially if your situation is temporary, and they can enjoy the benefits of having you continue through the end of your lease.

Paige Cerulli
Meet the author

Paige Cerulli is a freelance writer whose work has appeared in publications like Business Insider and Bing. She lives in Massachusetts and enjoys playing the flute and horseback riding in her free time.