Signing a car lease is like getting married. But what if you want to come out of this relationship? Some of the common reasons people want to get out of the car lease are: When your vehicle needs have changed, the annual mileage has or is exceeding the annual mileage restriction, you are moving to a new city, your financial situation has improved or you just want to buy another car. Early termination comes with penalties. Your car dealer might try to convince you to trade in your leased car for a new one but it comes with its own set of penalties.

So does that mean you are stuck in this bad marriage? No, there are ways to get out of a lease and we are going to discuss them one by one.

Option 1: Buy the car

Should you be buying a car during the lease or at the end of the lease term usually depends on what price the car dealer offers you. Buying is a good option if the market value of the vehicle is higher than its price.

But if the car doesn’t have a good market value and the dealer is asking for a higher price, buying it is a bad idea.

Option 2: Return the car

Here is another option: Return the car to the dealer (by the way, this should be kept at the last resort).  The penalties for this option and the early termination fee could be just as much as sticking to the lease agreement. If you still have to pay for the car, you might as well keep it.

Option 3: Transfer the lease

If you want to get out of car lease the cheapest way, this is what you should go for. This process is known as lease trading and lease assumption. It’s affordable and it does not hurt your credit.

So, the person who purchases the lease (buyer) takes over the payments of the leased vehicle by the approval of the leasing company and he assumes all the rights and responsibilities of the original lease arrangement. This new owner now will be responsible for making all the future payments of the lease. You, as the lease seller, will be walking away without any financial penalties.

So how does it happen? Sellers simply list their cars and buyers reach them out and the lease is simply transferred from one person to another.

Why buying a lease sounds interesting to people?

You might be wondering why would someone want my car’s lease? Honestly, there are lots of reasons people are attracted to such a lease. Let’s throw a light on some, shall we?

  • They might need a car for a short period of time and they don’t want to get into the hassle of a new lease agreement.
  • Some people cannot afford heavy down payments.
  • Maybe somebody likes driving a new car each year so swapping the lease sounds good.
  • The buyers may be interested in buying the car at the end of the lease period.

How Does Lease Transfer Work?

So, here is how it works:

Step 1: The person who wants to assume a lease submits a credit application with the leasing company.

Step 2: The leasing company performs a credit check on the applicant.

Step 3: Once the application is approved, the company prepares the lease transfer documents. These documents must be read by both buyer and seller and they sign them too. Then they are submitted to the leasing company.

Step 4: Now, the buyer gets the keys of the vehicle. Once all the processing is done, the monthly installments have to be paid by the new buyer.

Checklist for lease transfers

Transferring a lease is a legal procedure so before you actually dive into it, it is important to check the main requirements of the lease. Here are some questions to ask yourself:

  • Does your leasing company even allow the transfer?
  • Is the person who is willing to assume your lease has a good credit history? (This, however, is the job of the lease trading company)
  • Are you willing to retain some responsibility even after the transfer of the lease?

A great thing is you can also transfer a lease to someone who lives in another state but that you have to check with the leasing company involved.

Are there any glitches?

There are some leasing companies that may not allow the transfer or require the seller to retain some liability even if the transfer of the vehicle. To avoid such troubles later, find out what is allowed under the existing lease contract. It is recommended to have a good look at the contract before even signing a new lease.

What’s the cost of the transfer?

There is a fee for the lease transfer. A good thing is that the person who assumes the lease is the one who bears most of the cost. Apart from the fee, the cost of the transfer is less than the early termination of the lease itself.

According to the, getting out of an auto lease earlier can make you pay some or all of the following penalties:

  • The remaining payments on the lease
  • Early lease termination fee
  • Taxes associated with the lease (if any)
  • Costs related to the sale of the car
  • Storage or transportation cost
  • Negative equity between the lease amount and your car’s current value

If you want to avoid these penalties, the safest option is to transfer car lease. You can either find an individual buyer on your own or take help of an online lease swapping company.

Do the math and see what options works for you the best. Getting out of a lease early is not as expensive as people normally think. can assist you in finding a buyer who is interested in assuming your car’s lease. Click here to get the details on how it’s done.