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Can You Get Out of a Car Lease?
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Sep 2008
Nothing beats driving off the dealer's lot in a brand new car. But what happens if you have second thoughts? What if you need to trade in your sports car for a minivan because a baby is on the way? What if you can now afford that fully loaded luxury vehicle instead of the compact you've been driving? This isn't a problem if you purchased the vehicle. Just trade it in for a new one. Even if you are financing, the vehicle is essentially yours—you bought it. But what if you decided to lease instead of buy? Can you break a car lease after you've signed lease agreements, disclosure statements, and insurance forms?
There are many situations in which a lessee is unable or chooses not to fulfill a lease agreement. While there are ways to end a lease early, be careful—breaking a lease can be costly if it's not done correctly. Most terms for breaking a lease depend on the leasing company's contract. Breaking a lease with General Motors may have different penalties than breaking a lease with DaimlerChrysler. The first step in terminating your lease is consulting your leasing contract for early termination penalties and conditions.
After examining your lease contract agreement, determine what you can afford. There are three key concerns to keep in mind:
1. What penalties, if any, am I willing to pay?
2. What monthly payment can I afford?
3. How important is it to protect my credit history?
Once you've reviewed your contract and decided where you stand financially, you're ready to consider the options available for breaking your car lease:
Option 1: Return the Vehicle
Simply returning the vehicle to the dealership before the end of the lease is an expensive option. Why? Under most lease agreements, you are financially responsible for all remaining payments as well as early return penalties.
Option 2: Roll the Payments into a New Vehicle
You may decide to return the leased vehicle early and roll the remaining payments into a new vehicle. This will allow you to forfeit the old lease without financial penalties. However, you're still responsible for the lease payments on the old vehicle as well as the new one. Your new payments are likely to be high since they will include the payments for both vehicles.
Option 3: Request Voluntary Repossession
In this situation, you request the lessor pick up the vehicle prematurely. This might seem appealing because it won't cost you any money up front. However, it does damage your credit because it is a form of repossession.
Option 4: Find Someone to Assume the Lease
You can also find another buyer to assume the lease in a "lease assumption" transaction. This transfers the contract and liability to someone else. Check with your lessor before you pursue this option because the new lessee may need to meet certain requirements to be qualified to take over the lease.
Thanks to the accessibility of the internet and the purchase protection available for online transactions, lease assumptions have become a popular option for early lease termination. Online services like leasetrade.com, leasetrading.com, or swapalease.com allow you to advertise your lease to prospective buyers. People who are looking to get out of a lease are matched up with people who want to take over the lease for the remainder of the term. These services can be useful, but exercise caution and check the monthly advertising fees and any other out-of-pocket expenses you may incur.
Keep in mind that not all leasing companies allow lease assumptions. This takes us back to step one—consulting your lease contract. You must examine your specific lease stipulations before going through a lease assumption or any other lease-termination process. Be aware of the consequences of whatever action you take. You don't want to endanger your financial future just to get out of a lease.
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Comments
Submitted by on Jun 22, 2010 - 12:55PM
i did the lease at 6 pm monday night can i get out of this
Submitted by on Jun 25, 2010 - 4:36PM
Hello, we can help you with the cancellation of your lease. Email us at customercare@legalzoom.com or give us a call at 1-800-773-0888 (7am-5pm PST, M-F) and we'll get right on it!
Submitted by on Apr 16, 2012 - 4:56PM
just wanted to see if you can guide me or tell me what i need to do to get my name off a car im leaseing thank you
Submitted by on May 10, 2012 - 12:58PM
Hi David. While LegalZoom makes creating legal documents easy and affordable, we unfortunately cannot give specific legal advice on this matter. Feel free to get free legal advice on the LegalZoom Facebook page every Tuesday and Friday. Check out Free Joe: http://zoo.mn/FreeJoe.
Submitted by on Jul 3, 2010 - 10:52PM
I was told by a car dealer (in Florida) I could not use my 501c3 for financing a car for my non profit. Is this a new ruling? I've done it in the past.
Submitted by on Oct 3, 2010 - 9:31PM
after foreclosing on a house , how long do I have to wait before it comes off my credit.if the house foreclosed and there was a 125% secure loan made, can that company hold that loan on me as a foreclosure.
Submitted by on Oct 7, 2010 - 12:12PM
We'd love to help, but our specialty is legal documents, not legal advice. We can help you find a lawyer to answer your questions, though. Check out our attorney referral network: http://attorneyconnect.legalzoom.com
Submitted by on Oct 28, 2010 - 4:07AM
I AM IN A LEASE I AM TRYING TO GET OUT OF I OWE $17.800 i pay 354.00 a month can you help me get out of this lease it is a 7 year lease
Submitted by on Nov 23, 2010 - 10:37AM
Hi Raymond, thanks for your question. Unfortunately LegalZoom does not offer a service to terminate your lease, nor can we give any legal advice. We can provide you our attorney referral service to help find you someone who could answer those questions. Please visit http://attorneyconnect.legalzoom.com.
Submitted by on Oct 31, 2010 - 5:33AM
i've been struggeling this whole since i lost my job in jan 09 i called ford credit to find out what i needed to get caught up they gave me the amount told me if i could not pay it to do a self turn in .so i got the money together thru friends and reletives sat down on the porch to wait for my sister to give me a ride in to do a moneygram and a tow truck shows up to reposses the truck that i already had payed 95% of the loan on and drove off with no papers no signing anything i owed i think around 5 pay ments what if anything can be done
Submitted by on Nov 26, 2010 - 8:32PM
I would like information about a voluntary repo of an auto. Not a leased vehicle.
Submitted by on Dec 17, 2010 - 12:44PM
Hi Larry, thanks for your question. Unfortunately, LegalZoom does not offer services or documents for a voluntary repo of an auto. However we can help you find an attorney to give you information and guidance on this matter. Take a look at our attorney referral network: http://attorneyconnect.legalzoom.com
Submitted by on Apr 11, 2011 - 1:40PM
I'm 8 months into my 3 year lease and looking at transferring it to someone else using one of the web sites you mentioned. They called me back today reiterating everything here but also noted that even if I were to transfer the lease to someone else I would still be on the lease as a secondary lessee. This scares me as it sounds like I still will have some liability even if I were to transfer the lease. This is not something I expected or for that matter really wanted to hear. Now I'm having second thoughts because I'm not quite clear at exactly what my liability is if something disastrous were to happen to the car (damaged, stolen, wrecked, impounded) while in the primary lessee's possession. I understand that if the new transferee were to default I would become primary lessee again and take over the car and payments again but my concern has to do more with what exactly is my liability for the actual car when essentially it is in another's possession? Thank you.
Submitted by on Feb 29, 2012 - 10:20PM
I have a similar situation. Is there a document that will make the person who assumes the lease liable for any charges the leasing company holds me responsible in this case?
Submitted by on May 15, 2011 - 5:34PM
We signed a lease on a Toyota Friday night and then had second thoughts Saturday?
The car is not even registered and we tried to rescind the agreement on Sunday and within three business days.
However, we are told a lease does not constitute a sale and therefore not subject to the three day consumer laws??
What can do to be released without losing our deposit $2,000.
Submitted by on Jun 7, 2011 - 9:50AM
Hi, this is a good question, and we are sorry about this situation. We'd love to help, but our specialty is legal documents, not legal advice. We can help you find a lawyer to answer your questions, though. Check out our Attorney Services Division: http://attorneyconnect.legalzoom.com
Submitted by on May 25, 2011 - 11:47AM
Hi, I purchased a car on 5/21/11 but did not look at the final numbers on the paperwork until 5/24/11 and realized that it was too high. I called the dealer and told them that I wanted to return it and they told me to go in person to talk to them. When I did the finance person told me that they did not accept return after a car drives off the lot. I want to know what to do, because I am not willing to pay what they want me to. Also they misplaced my co-signers ss# and they are having trouble getting me financed. I want to get out of this contract but they refuse to work with me. If no bank can finance me do they have to take the car back and give me back my down payment? Also if the contract that I sign gets refused by the bank and they want me to sign a different contract can I refuse to sign and get out of it that way without getting into legal problems?
Submitted by on Jun 22, 2011 - 6:45AM
Hi S. Martinez, thank you for the inquiry. We are sorry to hear about this unfortunate situation. LegalZoom makes creating legal documents easy and affordable, but we unfortunately can't give specific legal advice regarding your situation. However, you can get free legal advice on the LegalZoom Facebook page every Friday. Check out Free Joe Friday: http://zoo.mn/FreeJoe.
Submitted by on Nov 26, 2011 - 8:04PM
My husband leased a car and is now leaving for Afghanistan as a government contractor for over a year. I know this does not fall under the soldiers and Sailors act but does this fall under anything else?
Submitted by on Feb 8, 2012 - 5:21PM
My girlfriend has a terminal illness and is on the fence about getting into a car lease. * If she dies before the lease is complete, will her heirs be responsible for the remainder of the lease? Thank you.
Submitted by on Apr 17, 2012 - 10:39AM
Hi Peter. We are sincerely sorry to hear of your girlfriend's illness. While we make creating legal documents easy and affordable, we unfortunately cannot give specific legal advice regarding this situation. Feel free to get free legal advice on the LegalZoom Facebook page every Tuesday and Friday. Check out Free Joe: http://zoo.mn/FreeJoe.
Submitted by on May 17, 2012 - 1:46AM
Hello, I put down a deposit of $1,000 lease a car and was waiting to get approval from the dealership before I put down the rest of the down payment. If I choose to not lease the car anymore, can I get my $1000 back from the dealer?
Submitted by on May 25, 2012 - 8:29AM
Thank you for contacting LegalZoom! While we make creating legal documents easy and affordable, we unfortunately cannot give specific legal advice on your deposit. However, feel free to get free legal advice on the LegalZoom Facebook page every Tuesday and Friday. Check out Free Joe: http://zoo.mn/FreeJoe.
Submitted by on Dec 15, 2012 - 5:26PM
I leased a Kia Optima 6/2012, due to health problems I am no longer able to work, so I am forced to live solely on SS retirement and military retirement. If I were able to get out of this lease approx. what would this company charge me to do this. My wife is not on this contract therefore I don't believe she is responsible for this large payment. Now that I can't work, I don't want to lose my home because I am forced to pay a car payment for a vehicle I don't need. One car is enough for us now. Thank yu
Submitted by on Feb 14, 2013 - 6:04PM
I am just a little confused on this swap-a-lease. If someone assumes your lease, how does it not effect your credit? What if they miss a payment?
Please note that we can’t answer legal questions in the article comments. If you have a specific legal question, click here to connect with an attorney.