How to End an Auto Lease Early

Ending an auto lease early runs the risks of paying outrageous penalties. There are several advantages to leasing a car. Sure, you don't own the car, and you'll likely always have a car payment. But on the other hand, leasing a car can save you money each month, which enables you to drive a more expensive automobile. And if you don't mind re-leasing a car and having a continuous payment, this might be the right option for you.

Of course, it's smart to look into the lease process before signing the paperwork. Leases involve mileage allowances, and you have to return the car in good condition. Depending on your lease agreement, you might have to pay a balloon payment. But all in all, leases are practical and less expensive.

Unfortunately, there's a major difference between leasing and owing. Dealerships and finance companies hold you to a lease agreement. Thus, you can't cancel a lease on a whim. Getting out of a car loan is a bit easier because you can sell the automobile, pay off the loan, and walk away. But with leases, it can be a bit complicated. Even so, leases aren't permanent. And if you need a way out, there are ways to end an auto lease early and maintain a good credit rating.

Check your agreement: Buyers remorse after signing a lease agreement does happen. Perhaps you splurged on a more expensive vehicle, or maybe your financial situation suddenly changed. Whatever the problem, some finance companies will let you end an auto lease within three business days of signing the agreement. Act quickly and read your lease contract to see if you're eligible to cancel.

Transfer the car to another person: Finance companies vary. And while one will allow lease transfers, another company may not. It's best to speak with your finance company first to see if these transactions are permissible. If so, list your car on several lease transfer websites such as Lease Trader or place classified ads in your local newspaper.

Find a buyer: Unknown to most people, it's possible to sell a lease car. The key is selling the car for the full lease balance. Speak with your finance company and ask for your pay off balance. Next, take whatever measures possible to find a buyer. List ads, ask a friend or family to buy the car, or post a sign in the back window.