How to Get Out of Car Lease

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The term, get out of a car lease, refers to the concept of terminating an auto lease early – before its normal contract end date.

Since most leases are designed to be completed according to the schedule specified in the lease agreement, ending a lease early can often be troublesome and expensive. The details of a specific lease situation will determine to what extent this is true.

Generally, getting out of a lease means returning the leased vehicle and paying cash to the lease company. Unless there was a large down payment or valuable trade-in at the beginning of a lease, the amount owed during the course of the lease is generally more than the vehicle is worth — a result of having made relatively low monthly payments.

Lease companies calculate the remaining balance amount by a method specified in their lease contracts. The method, called an "actuarial" method, is not favorable to the customer. Furthermore, the returned vehicle is sold at wholesale car auction, and the "realized value" sale price could be much less than the car is worth. The company them calculates the final amount owed by subtracting "realized value" from lease balance. This difference must be paid to the lease company if the lease is terminated. In some cases, it could amount to thousands of dollars.

One of the best and least expensive ways to get out of a lease is by way of a lease transfer, made popular by Swapalease, a company that assists with the process. In this process, the leasing party is matched up with someone else who takes over his vehicle and his lease. This is sometimes called a "lease assumption."

The other party assumes responsibility for continuing to make monthly payments, although many car lease companies still hold the original lessee responsible if the new lessee fails to make payments. Some car lease companies do not allow lease transfers within the first or last few months. Some do not allow transfers at all.

Although there are some fees and service costs involved, which are relatively low, transferring a lease avoids the high cost of early lease termination.

If a lease transfer doesn't work out in a specific situation, other options will have to be considered. These other options are detailed in the Lease Termination Guide, which is part of our optional Lease Kit. It provides detailed instructions about how to get out of a car lease at the lowest possible cost.

For more information, see: The Lease Guide

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