Financial 4.0 logo
EventsMarketplaceAsk An Educator
Sign In
LIFESTYLE & TRAVELBUDGETING

How to Break a Car Lease Early

Written by: Guest Writer

2 min read | Published: March 3, 2018

Image for How to Break a Car Lease Early

Leaving the dealership with a new car can be one of the best feelings in the world. With a lease, you can have a new car roughly every two years; but, what if you need to get out of your lease early? You may have to break your lease early for financial or personal reasons. Unfortunately, breaking your car lease is going to cost you, though there are ways to minimize these costs. Here are some options that could potentially save you some money.

Lease transfer

One of the cheapest ways out of a car lease is to transfer it to someone else. You may be wondering, “Why would anyone want my car lease?” Some people may need a short term vehicle, and don’t want to get stuck in a long-term lease. You can advertise your car on lease transfer websites, although you may be charged an advertising fee. Your car can look appealing by having low mileage, no down payment, and you can even offer a cash incentive that may lower their monthly payments. If you want to avoid the advertising fee, consider asking someone you know to assume the lease. Just double check your lease agreement and make sure it allows for a lease transfer. Some lease agreements will still count you liable for the payments until the end of the lease, in case the new lessee doesn’t make the payments on time.

Trading in

You may be bored of your vehicle or ready for a lifestyle change. In this circumstance, you may want to trade in your vehicle. This option can be one of your more expensive options. Your leftover payments and any early exit penalties from the current lease will roll over to your new one. This will result in having higher payments, but you will be able to pay the added costs over an extended time period.

Buy the car and then sell it to a potential buyer

In cases where you can’t transfer your lease and don’t need a new car, you may want to consider buying out your vehicle from the leasing company and then selling it. You’ll first want to ask your leasing company for the buyout/payoff amount for the vehicle. In most cases, the car is going to sell for less than the buyout/payoff amount. If you sell to a private party, you may have to pay sales tax. If you had put a bigger down payment on the vehicle you have a greater chance of breaking even.

Return the vehicle

This will be your most expensive option and should be used as a last resort. If you exhausted every other option, or need to be out of your lease as soon as possible, returning the vehicle is an option. When you return the vehicle to your leasing company, you will be paying termination fees and all of the remaining payments. You will want to contact your leasing company and consider all your options before making any final decisions.

Was this helpful?

Browse Related

Image for Auto Options: Buy, Lease, or Finance

Auto Options: Buy, Lease, or Finance

BLOG | CREDIT

1 min read | March 3, 2018

Getting a new car brings about many important decisions to be made. “What type of car are you interested in?” “How long are you planning to keep the car?” And one of the most important questions, “how are you planning to pay for the car?”.

Learn More

Image for Buying vs. Leasing a Vehicle Quiz

Buying vs. Leasing a Vehicle Quiz

QUIZ | CREDIT

Explore the difference between buying and leasing a vehicle and put your knowledge to the test with our latest quiz.

Learn More

Image for Are You Financially Adaptable?

Are You Financially Adaptable?

BLOG | BUDGETING

2 min read | January 27, 2019

If you’re considering how permanent you want your next home or job to be, it’s worth examining how adaptable your finances are to the choices you make.

Learn More

Browse by Category

Image for Budgeting

Budgeting

Image for Career

Career

Image for College

College

Image for Credit

Credit

Image for Fraud

Fraud

Image for Investing

Investing

Image for Lifestyle & Travel

Lifestyle & Travel

Image for Student Athletes

Student Athletes

Image for International Students

International Students


Oakland University Credit Union
www.OUCreditUnion.org

Oakland University Credit Union, OUCU, is a licensed trade name of Michigan State University Federal Credit Union. MSUFCU remains the legal entity behind both brands, MSUFCU and OUCU. Federally insured by NCUA. Equal Housing Lender.

If you are using a screen-reader or other auxiliary aid and are having problems using this website, please call 800-766-6828 for assistance. All products and services available on this website are available at MSUFCU full-service locations.

LEARNBLOGSPODCASTSQUIZZESCALCULATORSVIDEOSEVENTSMARKETPLACEASK AN EDUCATORFAQABOUTCONTACT US
Download on the App StoreGet it on Google Play

Copyright © 2024 Reseda Group LLC, used under license.

Terms of Use
Privacy Policy
Disclaimer