How Can I Terminate My Car Lease Early?

How Can I Terminate My Car Lease Early?

Walking away from a car lease agreement is not as easy as it seems. According to this agreement, you are responsible to make payments for the leased car and keep the car with you until the completion of your lease period. Sometimes, you may want to terminate a lease early. Here are a few ways to exit a car lease early with minimal loss.

Swap the Car Lease

You can transfer the car lease and exit early. When you transfer the car lease to another person, he/she takes it over and makes the payments for the remaining lease period. You should never attempt to transfer it without informing the car leasing company. Many car lease agreements allow lease transfer provided the nature of contract does not change.

For example, if the lease contract is a personal agreement between you and the leasing company, you can transfer the car lease to an individual and not any business entity or limited company. There are several car lease transfer companies which can help in this process. You need to register on their website and provide details about the leased car and details of the lease like monthly payments, remaining period and others.

There are many eager people to take over a car lease. A large number of people do not approach dealerships for leasing a car as they don’t provide a car on lease for a shorter period. The minimum lease period offered by car dealerships is 18 months or more. You can find many people eager to take over the lease and lease transfer companies can find them in a shorter period. Once both parties agree to it, the lease transfer company informs the car leasing company and prepares the documents. Once the lease transfer documents are approved by a car leasing company, the documents are sent to both the parties for signing.

After the lease transfer is completed, you give the car to the new lessee and he/she takes over the car lease. In car lease transfer, you save money as you are not required to pay remaining installments since the new lessee pays the monthly installments. Also, there are no penalties or early lease termination fees to be paid. The only expenses you have to bear are lease transfer fees that might be a few hundred dollars.

Return the Car to the Leasing Company

If the car lease transfer is not permitted, you can return the car to the dealership and request early lease termination. If the reason for early lease termination sounds genuine, the company may consider your request. However, you still have to pay early lease termination fees plus 50% of remaining installments.

Buy and Sell the Leased Car

Buying the leased car and selling it to a private party is a good option. Many car dealerships allow the lessee to own the leased car by paying a buyout price anytime during the lease period. The buyout price changes with time as the value of the car diminishes with time. If the current market value of the car is higher than its buyout price, you can exercise this option to terminate your car lease early.