Yes, you can return a car you are leasing before the contract ends, but it is almost never a simple or cost-free process. Terminating a lease early typically involves significant financial penalties, which can often amount to thousands of dollars. The most common method is an early lease termination, where you return the vehicle to the dealership or leasing company and pay the stipulated termination fee outlined in your contract.
Before making any decision, your first step should be to carefully review your lease agreement. Look for a section titled "Early Termination" or something similar. This section will detail the specific fees and the calculation method, which often involves paying all remaining monthly payments minus a somewhat theoretical "discount" for early return, plus a disposition fee and other charges. The total can be surprisingly high.
Another option to explore is a lease transfer or lease assumption. Some leasing companies allow you to transfer the remaining term of your lease to another qualified individual. Websites like Swapalease and LeaseTrader facilitate these transfers. While you may have to pay a transfer fee and potentially offer an incentive to the new lessee, this can be a far cheaper way out than a straight termination, as it avoids the hefty early termination penalties.
If you're looking to get into a new vehicle, trading in your leased car at a dealership is a possibility. The dealer will appraise the car's current market value. If the trade-in value is higher than your lease payoff amount (the sum of all remaining payments plus the predetermined purchase option price), you can use that equity as a down payment on your next car. However, with today's market fluctuations, it's common for the payoff amount to be higher than the trade-in value, resulting in negative equity that you would need to cover out-of-pocket.
The financial outcome of an early return is heavily dependent on your specific lease terms and the vehicle's current market value. The table below illustrates a simplified comparison of potential costs for a lease with 12 months remaining, assuming a $400 monthly payment and a $400 disposition fee.
| Early Return Method | Typical Cost Range | Key Considerations |
|---|
| Direct Early Termination | $3,000 - $5,000+ | Most expensive option; involves paying a large portion of remaining payments. |
| Lease Transfer/Assumption | $200 - $1,500 | Requires finding a credit-qualified individual; you may be liable if they default. |
| Trade-In at Dealership | Varies (Could be a gain or loss) | Best if the car's market value is higher than your lease payoff amount. |
Ultimately, contacting your leasing company directly is the best way to get a precise payoff quote and understand all your options. Weigh the costs carefully against your reason for wanting out of the lease.
