How Can I Terminate My Car Lease Early?

How Can I Terminate My Car Lease Early?

Although getting a new car lease might seem like less financial burden than owning one, you still have to pay monthly installments. Sometimes, financial conditions change and you desperately look for ways to cut costs. Returning the leased car can reduce your financial burden but it is not easy to terminate it early. However, there are ways to exit the lease early. Read on to know.

Lease Transfer

It is the best way to exit a car lease early. In lease transfer, another person who needs a car lease takes over your lease. However, not all car dealerships allow this. You need to check the lease agreement to ensure that the lease transfer is permitted. If the leasing company allows lease transfer, you can visit websites that help with swapping it. All you need to do is register as an individual who wants to transfer a lease, enter details of the car and lease, and wait for a response.

There are many people who want a car lease but for shorter periods. Since most car dealerships don’t offer car leases for a period less than 18 months, these people don’t go to car dealerships to lease a car. They also register at websites that help with the transfer of a car lease. When you post your advertisement, interested individuals will contact you. If you reach an agreement to transfer the car lease, you can ask the lease transfer company to help in closing the deal.

The lease swapping company works with your car dealership to prepare the papers for transferring the lease. When these papers are signed by both parties, you hand over the car to the new lessee. Thus, you terminate the car lease early without paying any penalties. However, you need to pay the lease transfer fee that might be around a few hundred dollars.

If the lease agreement does not allow lease transfer, the second best option you have is to buy the car and then sell it.

Buy the Car to Sell It

Initially, this option may sound ridiculous to you as you might not have the money to buy the car. Some car lease agreements have a buyout option that enables the lessee to purchase the car during the lease period. All you need to do is pay the buyout price to the car dealer. The buyout price is based on the residual value of the car. The buyout price is often less than the price of a new car as value of the car diminishes with time and use of the vehicle. Before you consider this option, you need to find the current market value of the car and compare it with the buyout price. If the buyout price is lower, you can buy the leased car and sell it to exit the lease early.

Return the Car

If you are not in a financial position to buy the car and sell it, the simplest option available is to return the car to the dealership. When you return the car before the lease expires, you might be required to pay 50% of the remaining installments along with an early termination fee.

These are ways to end a car lease before its expiration.