How to End Your Lease Early
When leasing a vehicle, the buyer is agreeing to make regular payments, follow a scheduled maintenance plan, and keep the vehicle for the duration of the contract. A popular misconception is that it is impossible to end a lease early. In truth, all leases can be terminated early. However, since lease agreements are not designed to be broken, substantial penalties and fees are usually associated with early termination. It is, in the end, a question of cost.
In many cases, from unexpected lifestyle changes to just boredom with the vehicle, buyers may consider ending their automotive lease before the end of the term. With appropriate vehicle preparation and picking the right time to end the lease, it may be possible to terminate a lease early and do so with very little penalty.
Prepare your vehicle
Wash and detail. Whether you intend to sell your vehicle or return it to the leasing company, it needs to appear clean and maintained. At a minimum, completely wash the exterior and vacuum the interior. At best, pay to have the vehicle professionally detailed.
Check the tires. Tires show obvious wear and tear. Make sure the tires have plenty of tread remaining. If the tread is worn or uneven (check your lease contract for minimal acceptable tread depths), purchase new tires at a local tire shop before you return the vehicle to the dealership or attempt to sell it.
Take pictures. Once the vehicle is clean, take a few good photographs of the interior, exterior, engine, and odometer (for mileage). You may also want to take close-up pictures of the tire tread. You will need the pictures if you are selling the vehicle, and they will also be very helpful if the condition or mileage of your lease return is ever questioned.
What are my options to end my lease early?
Return the vehicle to the dealership. This is a traditional lease termination, and it is an expensive option. When you return the vehicle to the dealership, you will be required to pay all penalties. In
some cases, you may be required to make all outstanding payments, and pay additional penalties on top of any other fees. This should be a last-resort option.
Trade in your vehicle for another vehicle. It may be possible to lease another vehicle at the same dealership. The penalties and fees from your original lease will be rolled in (included) with the new vehicle contract, making your payments higher. This option is also expensive, but it allows you to absorb the penalties from the old lease over an extended period.
Find someone to take over your lease. You may be able to find a family member, friend, or co-worker to assume the balance of your lease payments. Several online companies offer this type of service for customers looking to sell their leases. Each leasing company has its own set of requirements, which often include a credit check and transfer fees, and there may be out-of-state restrictions to consider. Use caution when exercising this option: though you are no longer responsible for monthly payments, many leasing companies hold the original lessee liable in the event of a default.
Purchase the vehicle from the leasing company. Every lease has a buyout or payoff. This is the amount due to the leasing company if you wish to purchase the vehicle outright at any point during the lease. Depending on the resale value of the vehicle, the payoff may be at or above market value, potentially requiring you to pay more for the vehicle than it is actually worth.
Sell the vehicle. Using the payoff amount from the leasing company as a guide, sell the vehicle to another private party. Again, if your vehicle has a high payoff it may be very difficult to sell without incurring a loss. Even if you are forced to take a financial loss, it may be a less expensive option than continuing the outstanding monthly payments on the lease contract. Selling the vehicle is also an excellent option if you want to avoid penalties for excess wear and tear and having exceeded the allocated lease mileage. - Mike Harley