Getting Out of Car Lease? Here Are 4 Options

Life is full of changes… and surprises. Maybe the spacious, gas-guzzling SUV you’re currently leasing isn’t well suited for the long commute to your new job. Or, your slick two-seater sports car doesn’t have room for a car seat. While leasing a car can come with plenty of rewards, it’s not the most flexible way to have a vehicle.

So, when life throws you a curveball, can you terminate your car lease? You have options for getting out of a car lease, including paying the penalty to cut the lease outright, buying out your lease, finding someone to take over your lease payments, and transferring the lease to a new vehicle. We’ll walk you through the pros and cons of each.

Option 1: Pay the penalty and cut your car lease short.

Every lease agreement includes an early termination clause. The clause outlines how you can terminate your car lease on the leasing company’s terms. Contracts vary, but in general, the termination clause outlines:

Fees for early termination, mileage, and wear and tear
How your security deposit will be applied to the termination
How you’ll need to satisfy payments still owed on the vehicle

On the upside, terminating a car lease early by following this process is less damaging to your credit than defaulting (when you stop making payments altogether). If a financial hardship is the reason you need to get out of your car lease early, however, paying all of the car lease termination fees is going to be hard.

Option 2: Get a car lease buyout loan and then sell the car.

Most lease agreements include a buyout amount in case you want to buy your leased car. The buyout amount decreases as you make payments.

A lease buyout can help save you money and protect your credit. Contact your leasing company to find out the buyout amount and ensure that it includes any additional fees, if applicable. With this amount in mind, you can get a car lease buyout loan and pay off the leasing company. You now own the vehicle and can sell the car at or near the payoff amount. After you sell the car, you can turn around and pay off your loan.

This option for getting out of a car lease requires some elbow grease and a little financial finagling. It’s not a quick fix, but it will help safeguard your credit.

Option 3: Find someone else to take over your lease.

If your lease agreement allows for it, you can transfer your leased car and its payments to someone who’s looking to lease a car. This process is called a lease assumption or lease swap. The process is simple, but requires some work on your end.

First, check your leasing paperwork to ensure lease assumptions are allowed. Some contracts forbid it. If your lease agreement says lease swaps are A-OK, then check out a website like SwapALease.com or LeaseTrader.com.

You’ll pay a fee to list your vehicle on the site. You’ll then build an ad just like you would if you were selling your car. Add pictures, a description of the vehicle, and information about the mileage and usage. Be enticing! If someone wants to take over your lease, you’ll pay a fee to the website to facilitate the transaction. You may also have to pay a lease transfer fee to your leasing company.

Option 4: Transfer your lease to a new vehicle.

Transferring your lease to a different vehicle can be a smart move if you’re not dealing with a financial hardship—for example, you originally leased a luxury convertible but would now prefer a 4WD SUV or truck.

Contact your leasing company to learn more about rolling your current lease into another one. You’ll still pay early termination fees, but they’ll be added to your monthly payments for the new car.

Option 5: Stop making car lease payments. (Avoid this one!)

Do your best to avoid this option for getting out of a car lease. If you stop making your car lease payments—which is called defaulting—your credit will take a nosedive, the car will be repossessed, and you could be sued. Yikes. Contact your leasing company if you can’t afford to make your payments anymore. They may be able to work with you to lower your monthly payments by extending the lease.

As you evaluate these options for getting out of a car lease, consider how much longer you have left on your contract. Are the fees and finagling worth it? You may be better off finishing out your lease if it’s only a matter of months.