Leasing a vehicle offers several advantages over purchasing, from shorter contracts to lower monthly payments. But what if you want to end a car lease early? If you need a different vehicle or no longer want to be bound by restrictive contract terms, ending your car lease early can be more complicated (and expensive) than selling a vehicle you purchased.
If you’re thinking about getting out of a car lease, this guide can help you decide whether ending a car lease early is the right course of action for you.
Review the Paperwork
It’s essential to understand the car lease termination fees associated with ending a lease. The costs can range from early termination fees and covering remaining payments to paying to prepare the car for sale. After reviewing the contract, you might discover it’s less expensive to wait until the lease ends.
Understand Your Options
Returning the vehicle to the leasing company is just one option for getting out of a car lease. While this is the easiest way to get out of a lease, it’s also likely the most expensive because you’ll be responsible for all of the fees outlined in the contract.
Before you return your car, consider all of your options. Here are five ways to get out of a car lease early:
- Transfer the lease. See if the dealership allows a lease transfer or swap. If it does, look for someone to take over the lease. Online lease-swapping companies can also help you find a suitable lessee, but remember to assess costs such as commissions and fees before signing up.
- Use the vehicle as a trade-in. Ask the dealership about rolling your current lease into the lease or purchase of another new vehicle. Treating the leased vehicle as a trade might help avoid early termination penalties.
- Sell the car. The vehicle you no longer want might be just the one another buyer needs. Ask the dealership for the lease payoff amount and compare it to the value of the vehicle. If the payoff is lower or equal to the value, sell the vehicle to cover the payoff.
- Buy the car. If you want to keep the car but no longer want to abide by lease terms for maintenance or mileage, you can buy it. Every lease has a “buyout” clause for this scenario. Be warned: The buyout amount could exceed the value of the car, forcing you to pay more than the car is worth.
Prepare the Car
Whether you plan to return the vehicle, transfer the lease or sell it, the vehicle needs to be in peak condition. Wash and detail the vehicle. Also get the oil changed, fluids topped off and tires checked — and replaced, if needed. A clean, serviced vehicle will fetch a higher sales price or incur fewer penalties than one needing extra TLC.
Before making a decision on your next vehicle, use our online calculator to determine whether it’s better to buy or lease.
Get the Coverage You Need
No matter if you decide to keep leasing or you opt to move on to a different vehicle, make sure you’re covered. Connect with a local Farm Bureau agent to ensure you have the auto insurance coverage you need.