How to get out of a lease early

One of the many leasing benefits is that you can finish your contract and get a new car more often.  Regardless of where you are in your lease contract, you’re likely considering your next steps.

4 Great Options to End Your Lease

Many automobile lessees don’t understand their options on how to be done with their leased vehicle at the end of the term, or during the lease period (heck, many dealers don’t either).  Here are the most common ways to end your lease:

1. Make your payments and use the vehicle for the full lease term.  What to do at this point is a big decision and should be made with care as it is one of the most significant benefits that you gain from leasing instead of purchasing.  At/near the end of the lease you have three main options:
   1. Turn it in – If your lease contract has been fulfilled you can simply turn it in.  This is typically done at a dealership that represents the brand of the vehicle, but this is not often required.  If you’ve used more miles than you paid for, you will receive an invoice to pay for those miles (typically between 15 and 40 cents/mile).  If the vehicle’s condition is worse than what would be considered “normal” for the age, you could also receive an invoice for the excess damage, tire wear, etc.  Many leasing companies will perform a lease-end inspection prior to turn-in.  This will allow you to fix concerns and/or arm yourself with more information to make the best lease-end decision.
   2. Trade it in – many lease contracts will allow a dealership to purchase the vehicle from the leasing company for the pre-assigned residual value (plus a possible purchase-option fee).  If the current market value is greater than the buy-out price, you may have equity that you can put toward your next loan or lease.  If the current market value is less than the buy-out price, you’d likely be better off turning it in (unless the mileage and condition charges exceed the difference between the buy-out price and market value).
   3. Buy it out – At the end of your lease, you have the option to buy it for the pre-assigned residual value (plus possible purchase-option fees).  If the market value equals or exceeds the buy-out price, it may be a good vehicle to purchase and continue to use or sell.  Keep in mind, if you choose to sell it to someone else, you may need to pay sales tax and motor vehicle fees prior to the sale; making the trade-in option more attractive.
2. Early Lease Buy-Out – Just like having a balance on a vehicle loan, there is always a buy-out balance on a leased vehicle.  You can purchase the vehicle at any time.
3. Early Trade-In – At any time during your lease, you can decide to trade the vehicle toward a new vehicle purchase or lease.  Simply check the buy-out price on your leased vehicle by calling the leasing company or visiting your account online (typically the remaining balance plus any purchase option fee).  Check that figure against the current market value and determine if you’d like to proceed with a trade-in.  Most leasing companies allow you to trade the vehicle at the dealership of your choosing; not just the dealer or brand you got it from.  This is great for lessees whose needs have chanced since they began their lease.  Remember, a lease is designed so the payoff will match the market value at the end of the term. So, because of the low payments, the buy-out price is often greater than the market value.  This gets closer as you near the lease maturity date.
4. Early Termination – With most leasing companies you can end your lease by paying the remaining payments (plus any termination fee) and returning the vehicle.  Many leasing companies will extend “pull ahead” or “lease loyalty” incentives to those who terminate their lease early in favor of a newer model from the same brand.  These incentives may come in the form of waived payments, additional lease cash, waived fees or waived damage penalties.

Lease Your Next Vehicle with Holiday Automotive

Can you end your lease early? At Holiday Automotive, we’re here to help you in any way we can! If you have any end of lease questions, we have answers, so contact us to get started. We look forward to working with you!