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How to Get Out of a Car Lease Early
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If your leased car isn’t cutting it for your family or your budget, you might need to get out of your car lease early. Breaking a lease can result in a huge financial penalty, so here’s how to get out of a car lease early with the fewest costs and least amount of pain possible.
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1. Trade it in for another car
If you still need a car, you could trade in your lease and buy or lease another vehicle. This way, the dealer handles all the paperwork and you get everything done at once. There are often trade-in incentive programs, and if you have any negative equity, you could roll it into your new finance deal or cover it with a down payment. If you decide to trade in your lease and purchase another car, LendingTree’s auto loan marketplace can help match you with a lender.
2. Transfer it to another driver
Many people want a short-term car lease and might be interested in taking over yours. Check in with your lease provider to see what fees or taxes apply, and make sure that they’ll greenlight the process. There are several sites that help match people for lease takeovers, including:
If the fees and taxes that the new lessee would have to pay become prohibitive — or you want to attract a new person ASAP — you could offer incentives, such as help covering the fees or paying a month ahead for the new lessee.
3. Sell it for cash
You could sell your leased vehicle. Find out how much it would cost to buy it — fees and penalties included — and then advertise it for sale. The new buyer could pay the leasing company directly or you could act as a middleman. You could also buy the car outright so you have the title in hand and ready for the new buyer.
You could advertise your car on social media channels or on sites such as Craigslist or Autotrader, or go old-school with a classified ad in your local newspaper.
4. Ask to lower or suspend your payments
Don’t be embarrassed if you’ve run into financial trouble. It’s better for you (and the lender) if you’re able to suspend your payments rather than defaulting on the payments altogether. You will eventually have to pay what you owe — with interest — but this can be the simplest solution if you’re in a tight spot for a couple of months. Here are relief options for overcoming debt.
If you’re facing a special situation, you may have other options. Here are some alternatives to consider if…
Your car’s been having issues
If your car has had multiple or major problems, look into your state’s lemon law. These laws protect consumers from buying or leasing vehicles that essentially don’t work. Each state has specific requirements, so check with your state’s attorney general for the specifics that could apply to you.
You’re in the military
If you need an early termination of your lease because of military duty, you may receive assistance under the Servicemembers Civil Relief Act (SCRA). Contact your lender and be ready to provide documentation of your deployment or relocation orders. For more information, check out the Department of Justice’s SCRA page.
You need out ASAP
If all else fails, return the car to the dealer and ask to end your lease early. Accept the financial penalties as necessary and set up a monthly payment plan if you can’t pay them outright. Doing this is almost certainly better than facing repossession or declaring bankruptcy.
When should you break or keep your lease?
It can make financial sense to break your lease if you experienced a big life change that provides a less expensive form of transportation — for example, you inherited a vehicle or you moved and now have easy access to public transportation.
Terminating your lease early can be a bad idea if you simply had a change of heart and want something different. A vehicle that is reliable and still satisfies your transportation and budget needs is generally a good car. Weigh the costs of breaking your lease against any inconvenience you’re facing and decide if it’s worth it.