The Home Category The Home: family money matters

How to get out of a car lease contract

Leasing a car is less expensive than purchasing one and, in most instances, it enables you to afford a nicer car. However, people who lease cars don't own their vehicles and must return them in good condition at the end of the contract period.

What's more, once you sign a lease or personal contract plan agreement, you have to keep the car for the duration of the term. Unforeseen circumstances do occur sometimes, forcing you to terminate a lease agreement early. Fortunately, there are ways to get out of a car lease contract.

Return the car to the dealership and pay what you owe. Leases are legal binding agreements, and once you agree to a dealership's lease terms, they'll hold you to the contract. However, some dealerships are eager to work out an arrangement. They'll let you terminate your lease contract and waive termination fees, as long as you're willing to pay the remaining balance on the lease. Because this solution requires upfront cash, this isn't an option if you're financially strapped.

Transfer the lease to a friend or family. If you can't afford the payments on your leased car, and you don't want to return the vehicle to the dealer, consider a lease transfer. Thus, you're able to maintain your credit rating. Contact your leasing company and ask about lease transfers. If the leasing company allows transfers, find someone to take over your lease payments. They'll assume all leasing rights, and you're no longer responsible for the car.

Sell the car and pay off the lease agreement. Contact your leasing company and inquire about the amount you need to buy the car. Next, place classified ads in your local newspaper, online or in a car magazine and find a buyer for the car. Once the car sells, use the proceeds to pay off the amount outstanding on the lease agreement.

Take the car back to the dealership. If you can't find a person to assume the lease and you don't have cash to terminate the lease agreement without penalty, simply return the car and keys to the dealership and walk away. Because the dealership owns the car, they're obliged to take the car back. However, the dealer or leasing company will report a repossession to the credit check agencies, which decreases your credit score and may prevent you from getting loans, mortgages or other finance in the future.


Talk to the Citizens' Advice Bureau if you're having trouble meeting car lease repayments or servicing other debts. They can help negotiate with creditors on your behalf and come up with a realistic repayment schedule.


Some leasing companies impose an additional charge if you choose to end the lease agreement early.