How to Get Out Of a Car Lease Early

Your circumstances can change at any time. That's why there are so many different reasons why you might be looking at getting out of a car lease early. You might need:

  • A new car to meet your needs

  • No car at all anymore

  • A cheaper deal to suit your new budget

Getting out of a car lease isn't always easy. That's why we've put together this in-depth guide with all the help and advice you need.

Why Is a Car Lease So Hard to Get Out Of?

Car leases can be tricky to get out of, especially if you're still contractually tied in for a long time. This is because car leases are typically long-term contracts with payments and fees based on the assumption that you'll fulfill your monthly obligations.

When you buy a car, you usually pay the entire cost upfront. However, when you lease a vehicle, you only need to pay the predicted depreciation for the time that you have the car plus:

  • Fees

  • Taxes

  • Security deposits

  • Interest

Leasing companies base the deal they offer you on the assumption that you'll make your payments in full at the time specified in your contract.

If you return the car early, you'll have outstanding fees. Plus, because the vehicle has been used, the leasing company can't just lease it out again as a new vehicle, so they'd stand to lose a potentially significant sum of money.  

Most companies will build clauses into their contracts to cover their losses, which means you have to pay a penalty if you end your contract early. 

Why Might You Want to Get Out Of a Car Lease?

There are several reasons that you might need to get out of your car lease earlier than planned. Here are some of the most common reasons people give for getting out of a car lease early.

?You Can No Longer Afford It

Sometimes, your financial situation changes mid-contract. That could be because you've:

  • Had a new baby

  • Moved to a more expensive home

  • Had a pay cut

You Want A New Car

Whether it's because you need a bigger trunk or more seats, a change in your circumstances may mean that your current car no longer suits you or your family. 

You No Longer Need A Car

If you change jobs and no longer need to commute, it might be cheaper for you to get out of your lease early instead of paying each month for a car you no longer need. Or maybe you've moved and no longer have space for parking.

What Are Your Options For Getting Out Of a Car Lease?

Ending your car lease early means you won't have to make monthly repayments for the remainder of your deal. But it does mean you might have to return the vehicle to the leasing company or have to pay the remaining balance on your agreement.

Getting out of a car lease early isn't always easy, but there are a few options you can try if you need to.

Buy Out Your Lease

If you need to cancel your lease before the end of your contract, many companies offer you the chance to buy your car from them for a predetermined amount. You can usually purchase the car in cash or take out a loan to cover the expense.

You can then choose to sell the vehicle on or keep it, whichever suits you best. The leasing company will calculate the approximate value of the vehicle and factor in how much you've already paid into the lease to determine how much you can buy the car for.

Terminate Your Lease

Terminating your lease is potentially the most straightforward way of getting out of a car lease early. However, it can also be one of the most expensive ways. Its simplicity comes from just handing the vehicle back to your leasing company, who'll then handle all the details for you.

The expense comes from you having to pay the remaining costs of your deal and any early termination fees outlined in your contract. You may also have to pay fees like:

  • Vehicle disposal fees

  • Transfer fees

  • Taxes

Trade Your Lease

If you need to end your lease early because you need a new car to suit your changing needs, trading your lease might be the way to go. You might need to pay an early repayment or exit fee on the vehicle you have currently, but you should be able to work out a new deal with your leaser on a new car.

Plus, you might be able to switch to a cheaper vehicle to reduce your monthly payments - but you'll need to get this approved by the leasing company first. They may only let you trade for a car of a similar or higher price. However, trading your lease isn't ideal if you're terminating to move abroad or simply no longer need a car.

What Not to Do When Leaving a Car Lease

There are often limits on how you can leave your leasing contract early, if you can at all. But some things can make it a lot more complicated or write early termination off as an option altogether.

Depending on how long is left on your lease and the amount you'd need to pay to get out early, it might be cheaper to stick with it.

Check your contract and see what you'd stand to pay if you ended your lease early and weigh whether you can afford to. If your early termination fees are high and would leave you struggling to meet other payments, it might be cheaper to keep the car and continue with your agreement.

If you simply no longer love your car, but it still meets your needs and budget, it's not the best time to consider getting out early. You'll probably be better off waiting until the end of your contract before looking at a car you want to avoid unnecessary and pricey fines.

You'll also need to make sure that you keep up with your monthly payments, even if you're considering leaving your lease early. Remember, your leasing company is entitled to any money you owe them.

If you miss your payments, the leasing company may sue you to get their money back. Skipping any repayments could also impact your credit score, making it more difficult for you to take out a lease or other loans in the future.

Buy a Car From EchoPark

If you’ve managed to get out of a lease and you’re on the hunt for a reliable used car, we have a huge stock of vehicles in dealerships across the country.