How to Get Out of a Car Lease Without Incurring Penalties
So you got a car lease and now you want to get out of it because you finally realized that leasing doesn’t make much sense. Especially when the strategies we teach you here can save you thousands and allow you to drive a much nicer car for smaller monthly payments similar to a lease, but without the hassles or losses associated with leasing a car.
However, if you do find yourself stuck there are typically three ways you can get out of a lease.
- Buy out your payments
- Pay off the car
- Get someone to take over your contract
While each lease has its own restrictions, some leases are more flexible than others; so make sure to consult with the lease company to get exact details about penalties and/or early termination fees.
Buying Out Your Payments: When buying out your payment, it typically makes sense to do so only in the few (less than 3) last payments left since you will have to add up any payments owed and end up paying them at once before turning in your car. While this may allow you to get out, it won’t allow you to get away from the turn-in process and the inspection that is required at return. Any dents or scratches larger than the size of a credit card will have to be fixed, and any needed maintenance will need to be addressed before being turned in. This may lead to further costs and should be taken into consideration as being preventive and fixing before taking the car back may save you quite a lot. Use our resource guide for insiders to help you identify a great independent shop to help you save money in this process.
Pay Off the Car: Paying off the car in some cases, like trading it on another car, may be allowed. It all depends on the company itself and the way your lease is structured. In cases where you are trading in the car, keep in mind that the dealer is taking responsibility for the car and any repairs or damage will no longer be your responsibility going forward. This strategy is the easiest and most convenient, but many companies no longer allow it making it impossible for a person to trade in their car on one by a different manufacturer when leased. Leases from VW for example, do not allow this type of exit from a leased vehicle.
Contract Transfer: In some cases, there is a clause in your lease allowing you to transfer your lease to someone who is willing to take over your payment and terms. If you have 10 months left on your lease, then someone else can continue your payments for as long as your term is active but will need to qualify for it financially as you once did. It may be attractive for them as typically they will not need any money down and will have an attractive long term payment that is lower for a shorter time frame since the original term will hold. The new owner will hold responsibility for the damages and/or maintenance needed, and you will be free from any responsibilities.