How to Get Out of a Car Lease

If you are trying to get out of your car lease, you are most likely trying to do so before the maturity date of your lease contract. That is, you are trying to find out how you can get out of your car lease before it ends. Lessees are often interested in getting out of their car lease early for reasons such as financial problems, unemployment, or simply because they no longer wish to drive the car that they are leasing. While getting out of your car lease isn’t always the best or the simplest course of action, it is still quite possible to do so. So what options are available to you and anyone else who is interested in getting out of their car lease early? Let’s take a look.

To get out of your car lease, you basically have five different options available to you.

  1. Payoff your leased vehicle
  2. Sell your leased car/have someone payoff the car
  3. Trade in the car for another car
  4. Voluntary return
  5. Lease assumption

Payoff or Buyout Your Leased Vehicle
The first option is quite straightforward. You simply find out what the payoff or buyout amount is for your leased vehicle and pay it off. This payoff amount is usually written on your monthly car lease statement, but if it isn’t, you can simply call your leasing company/finance company to find out what it is. Once you payoff your car, the title is released to you and you become the sole owner of the car.

Generally speaking, the buyout option is available at any point throughout the term of your car lease, but it isn’t always a wise option to buyout. This is because the payoff amount of your leased car doesn’t fall as fast as the car’s actual market value. This means that if you were to buyout the car for a certain amount at a specific point during the term of the lease, you would probably be paying more than what the car is actually worth. However, if you are approaching the end of your lease term or if you have an in demand vehicle, the payoff amount will be reasonably closer to or sometimes even higher than what the vehicle is actually worth, which would mean that you have “positive equity” on your car.


You should definitely closely consider your reasons for wanting to buyout your leased vehicle. Some people consider buying out their leased vehicle because they have excessive mileage and they do not wish to be responsible for excess mileage fees. However, you should look closely at whether paying off the lease or paying the excess mileage fees makes more sense. In most cases, paying the excess mileage fees at the end of your lease will cost less than buying out the car, unless you have frequently been traveling long distances.

Sell Your Leased Car/Have Someone Payoff the Car
If you are interested in selling your leased vehicle, you must first own the car. In other words, the title of the car must be in your name. While you are under a lease contract, the finance company or leasing company owns the title. This means that you must first buyout the car from the finance company before you can sell it.

In most cases, as mentioned above, the actual retail value or private party value of your leased vehicle will be less than the payoff amount. This means that if you were to payoff the vehicle and subsequently sell it to someone else, you would have to come up with the difference between the amount you sold the car for and the amount you paid to payoff the car.

You should always look up the value of your vehicle on sites like or to understand what your car is actually worth and whether there is a significant difference between the payoff amount and its actual value. If this difference is rather small or the value of the car is equal to or higher than the payoff amount, selling your car to someone else wouldn’t be such a bad idea.

You can also have a third party payoff the lease directly instead of you paying it off first before selling it. This way, you could avoid having to pay sales tax. This makes the process of getting out of your car lease much quicker, but depending on what is stated in your car leasing contract, this may or may not be allowed. Read the section of your lease contract that deals with early termination to see whether the car leasing company allows a third party to directly payoff your lease.

Trade in the Car for Another Car
When you trade in a vehicle, you turn in your leased vehicle to a dealership who will then offer you a new vehicle to lease or finance. Trading in a leased vehicle in order to lease another vehicle can often be a costly decision. You see, when you decide to trade in your car for another car, the dealer will pay off the car for you. However, if this payoff amount is higher than what the vehicle is worth, they most likely will not accept a trade in because the dealer does not stand to profit off your old car. In other words, if you are what’s called “upside down” on your car, it wouldn’t make sense to trade in your car and the dealer most likely won’t accept the trade in anyway. Even if they do accept the trade in, they will transfer the money they lost (by paying off your vehicle) onto your new car’s monthly payments, which means you’ll end up with higher than average monthly payments.

Voluntary Return
When you voluntarily return your car, what you’re doing is taking it back to the dealership from which you originally leased the car who will then return it to the leasing company. Many leasing companies allow you to return your car at any time throughout the term of your lease, but this doesn’t mean that you can simply turn it in and walk away without any fees or penalties. When you voluntarily return a leased vehicle, there are still some financial obligations you must meet.

Because you are giving the car back, you are not responsible for paying off the car at its payoff amount or its residual value. However, you are responsible for paying for the difference between the payoff amount and the realized value. Now, different leasing companies may have different ways of coming up with the realized value, but it is generally the price that the lessor or leasing company can sell the vehicle for at the time when you turn it in. Of course, there most likely will be a gap between the realized value of the car and its payoff amount, because the lessor will likely sell the car at wholesale auction value.

While a voluntary return is the right way to turn in your car early, you also have the option of an involuntary repossession, which is highly unrecommended. With an involuntary repossession, a lessee simply stops making his/her monthly lease payments, which will eventually lead to a default, giving the leasing company the right to take away his/her car. You should try to avoid an involuntary repossession as much as possible. Not only will you ruin your credit, but the leasing company will most likely pursue you for various costs such as the payoff amount and repossession fees.

Lease Assumption
The last option for getting out of a car lease is to perform what is called a lease assumption or lease transfer. With a lease assumption, an interested buyer takes over your auto lease. Not all leasing companies allow lease takeovers but this option is definitely the most low-cost and efficient option for ending your car lease early, because it allows you to save hundreds, if not thousands of dollars that would otherwise have to be paid if you were to choose a different option.

If you decide to have someone take over your car lease, you should use a reputable company, such as, that assists in the takeover process. You should never try to handle this process by yourself, and you should always involve the leasing company or the lessor in order to successfully transfer the lease and release yourself from any financial or legal obligations to the car. You should make sure, using a written statement from the leasing company, that you are no longer legally or financially responsible for the car after a new lessee takes over your lease.

To conclude, leasing companies aren’t too fond of lessees who decide to get out of their car leases before the maturity date. They would rather lease a car to an individual who can make the payments until the end of the term of the lease. However, you still have multiple options if you decide that you want to get out of your car lease early. Closely consider these options and decide for yourself what option makes the most sense for your situation.