Can I Break a Car Lease?

You can break your car lease; details and costs are outlined in your bank contract. Expect to pay a bank-determined termination fee, which usually costs more than $1,000. You must also pay all payments due for the term of your contract. If you went over your mileage allowance or exceeded wear-and-tear fees, expect to pay additional fees, as well.

Call the Leasing Bank

Call your leasing bank to find out the total amount of fees you can expect to pay for lease termination. Ask if you can set up a payment arrangement or if the fees are due at once so you can plan ahead and budget. Expect the fees to prove more costly if you have recently initiated your lease; termination costs may prove too expensive to end the lease. If you are nearing the end of your contract, your bank may offer an opportunity to get out of the lease without penalty in the event that you lease or finance another vehicle from the same bank.

Arrange an Inspection

Some leasing banks require lessees to complete a vehicle inspection before returning a lease even if the termination is early. If not, arrange an inspection with the leasing bank to better plan ahead for lease-end costs. A lease representative will inspect the car to determine if you have exceeded wear-and-tear fees or if you need to complete repairs or maintenance items before returning the car. Completing the inspection before the lease's return can help you to plan ahead; you'll have an opportunity to fix your vehicle and avoid an extra bill.

Returning the Lease

Your lender may request that you pay your termination fees upfront or after return. Regardless, pay the fees as soon as possible to protect your credit rating. If you do not pay the fees, the leasing bank reports the nonpayment to the credit bureaus. Return your vehicle to the bank's designated drop-off point, which is usually a same-make dealer. Make copies of all paperwork that the dealer completes with you. If you did not arrange an inspection before return, a representative (not the dealer) will inspect the vehicle once the bank collects the car from the dealer and bill you if necessary.

Other Options

Explore other options before you decide to terminate your lease and pay the fees. If you're still under your mileage allowance, you can transfer your lease to someone else if your bank allows it. LeaseTrader.com and the SwapaLease website bring lessees and buyers together for lease transfers. You can also avoid over-mileage and termination fees by purchasing the vehicle. Call the leasing bank to determine the car's purchase price and sell or trade the car instead.