How to Get Out of a Car Lease
Sometimes getting what we want is not what we need after all and getting stuck in a lease you can’t or don’t want to pay off is one of the possible consequences. If you’re facing such a conundrum and must quickly find out how to get out of a car lease, you’re in the right place. For starters, don’t worry — there are ways out. You just need to know what your options are.
Conditions to Break a Car Lease Early
The first step to end a car lease early is to understand the terms of your agreement. This will help you determine if you’re eligible for early termination. Typically, you can only do it if you have a valid reason, such as:
- You’re moving out of the country;
- You can no longer afford the monthly payments;
- The car has been totaled or stolen.
If you don’t fall into any of these categories, getting out of car leases early may still be possible, but you’ll likely have to pay a penalty.
What Happens in the Case of an Early Termination of a Car Lease?
Getting out of leases early might be expensive before the terms are up. However, if the advantages of early termination outweigh these expenses, it may be worthwhile. You’ll want to calculate how much money ending a car lease early will cost you and compare it to what you’ll save. We’ve listed some of the most frequent consequences of quitting too soon:
- You may have to pay a sizable car lease early termination fee;
- You might be charged for the remaining months on the lease;
- Your credit score could take a hit, making it difficult to get approved for another car loan in the future;
- You might forfeit your security deposit;
- You may be responsible for damage to the car beyond normal wear and tear;
- You might have to find a replacement driver right away or be liable for the cost of finding one.
How to Prevent Potential Penalties if You Terminate a Lease Early
The first step is reading your agreement thoroughly and if you have any questions, ask your dealer before signing anything. That way, you’ll know what you’re agreeing to and there won’t be any nasty surprises down the road. You should also keep in mind that not all dealers are created equal. If you have a good relationship with your dealer, they may be more likely to work with you if you find yourself in a bind.
How to Get Out of a Car Lease Early
Your next step is to figure out how much breaking a car lease early will cost you. This will depend on the terms of your agreement, as well as the state where you live. Generally, you’ll have to pay the remaining balance on your lease, plus any penalties or fees.
If you decide to terminate your lease, contact your car dealer or leasing company as soon as possible. They may be able to help you through the process or at least provide some guidance.
It’s also important to note that turning in a leased car early can have negative consequences on your credit score. So if you’re considering this option, be sure to weigh the pros and cons carefully. Keep in mind that there are credit repair companies that may help you, though.
If you decide that getting out of a car lease is the best option for you, follow these steps to make the process as smooth as possible:
- Understand the terms of your lease agreement;
- Determine if you’re eligible for early termination of the lease;
- Calculate the cost of breaking your lease;
- Contact your car dealer or leasing company to discuss options.
By following these steps, you can terminate your car lease without too much hassle. Just be sure to weigh all your options and choose the path that’s best for you.
If your contract does not allow early lease termination or its terms are not going to cut it for your personal situation, there still is hope. Transferring the lease can help you get out of the contract without much headache.
A few companies offer lease transfers, so finding one will not be difficult. However, there are some things you should take into account when transferring your lease:
- The new lessee must meet the qualifications of the leasing company;
- There may be a fee for transferring the lease;
- You are still responsible for ending the lease according to the terms;
- The new lessee is responsible for any damages to the vehicle.
Another, albeit costly, option to get out of a car lease is to buy out the contract. To do that, you’ll need to calculate the remaining balance and then add that to the cost of the car. This will give you a good idea of how much money you need to purchase the car outright.
If you have the cash available, you can then go ahead and buy out the lease. If you’re just a little bit short on cash you can take out a quick loan, however, make sure that you can pay out that loan on time, and the terms will be acceptable. Be sure to contact your car dealer or leasing company to work out the details.
Turning in a Leased Car Early for Another Lease
If none of the above early lease termination options suits you, this is another possible alternative. Your leasing company may have a program where you can trade in your leased car for a new one. This will allow you to get out of your current lease agreement and into a new one with minimal hassle.
Just be aware that you may still be charged as a result of the car lease termination, and the terms of the new agreement might not be as favorable as your current one.
When Is it a Good Idea to Break a Car Lease Early?
There are various situations that may make leaving a vehicle lease a good idea. If you move to the city center and can walk or use public transportation to get around, you may no longer require an automobile. In this situation, canceling your contract early might be beneficial. Just ensure that the cost of turning in a lease early is less than the remaining expenses you’d have if you continued to lease the car.
Another reason to break a car lease would be if you find another vehicle that you like more and is within your budget. If the terms of your current lease agreement do not fit your needs, transferring or buying out the contract might be a better solution. Lastly, if the car has been in an accident and the repairs are more than the car is worth, you may want to break the lease and walk away from the vehicle.
When Is it Not a Good Idea to Break a Car Lease?
There are also times when breaking a car lease is not a good decision. If you have only a few months left on your lease, it may not be worth the hassle or cost to terminate the contract. In addition, if you do not have the funds to cover the costs associated with early termination, it’s best to stick with the original plan.
Lower or Suspend Payments
If you’re having trouble making your monthly payments, besides the early termination of an auto lease, you might be able to lower or suspend your payments. This can be a helpful option if you are temporarily unable to afford the car.
To lower or suspend your payments, you’ll need to contact your leasing company. They will work with you to find a payment plan that best suits your needs. Keep in mind that you will likely still be charged a fee if you choose this option.
How to Get Out of a Car Lease FAQs
Can you get out of a car lease early?
Yes, there are several ways of getting out of car leases early. You can return the car, terminate the contract, lower, or suspend your payments.
What happens if you break a car lease?
Returning a leased car early can be a costly process, but it’s not impossible. By understanding the terms of your agreement and considering all your options, you can terminate your lease without too much hassle.
Can you pay off a lease early?
Yes, you can pay off your car lease early. However, you will likely be charged an early termination fee.
Can you suspend a car lease?
Yes, you can suspend your contract as a means of getting out of a car lease early. This option will allow you to stop making monthly payments for a set period of time. Just be aware that you will still be responsible for any damages to the car.
Can you lower a car lease?
Yes, you can lower your car lease. This can be a helpful option if you are temporarily unable to afford the monthly payments. To lower your payments, you’ll need to contact your leasing company. They will work with you to find a payment plan that best suits your needs.
How much does it cost to break a car lease?
The cost of breaking a car lease will vary depending on the situation. You may be charged a costly early lease termination fee. You may also be responsible for any damages to the car.
Can you return a leased car and keep the down payment?
It is possible to return a leased car and keep the down payment, but this will depend on the terms of your agreement. Be sure to contact your leasing company for more information.
Can you trade in a leased car?
In case of an early lease return, it is possible to trade in the car. However, you will need to contact your leasing company to find out more information.
How much is an early termination fee for a car lease?
The early car lease termination fee for a lease will vary depending on the situation. Besides, you might also have to pay any damages the car has suffered.
How to get out of a car lease early without penalty?
There are several ways to get out of a car lease without penalty. You can lower or suspend your payments, terminate the contract, or return the car. When figuring out how to get out of a car lease, however, make sure to take into account associated costs, which could include an early termination fee and damages to the car.