You can terminate a car lease and break your contract. Terminating the contract may prove expensive, so you may want to explore other options before you decide to do so. Termination details are outlined in your lease contract. Expect to pay a termination fee and any payments remaining on the lease contract.
Determining Fees
To determine the cost of terminating your lease, review your contract or call your leasing bank. You can expect to pay a termination fee, which usually exceeds $1,000; the actual cost differs by bank. Expect to also pay any payments due for the remainder of your lease. Most leasing banks do not offer a payment plan to terminate the contract, which means you'll have to pay the termination costs before you turn in your vehicle.
Other Fees
Expect to pay any over-mileage or wear-and-tear fees that apply to your vehicle lease. If you went over your mileage allowance, you'll pay 10 to 20 cents per mile. Your contract lists your over-mileage charges. If your vehicle is damaged or has wear that exceeds your bank-specified allowance, expect to pay fees for repair or loss of value. Once you return your vehicle, the leasing bank inspects it to determine if additional fees apply. Terminating the contact does not wave these fees; expect to receive a bill shortly after your vehicle's return if owe additional money.
Returning the Vehicle
Once you arrange your vehicle's lease termination, you will bring it to a bank-specified location for drop off. Depending on your bank, this may include a dealership or auction. Upon return, expect to fill out paperwork that states your vehicle mileage, personal information and a list of items you returned with the vehicle, such as keys and owner's manual. Read all paperwork over before signing and obtain copies for your records. Your drop off location will not inspect the car. Any fees due are determined once the vehicle has been collected by the bank from the drop off location.
Other Options
A lease termination can prove expensive, especially if your contract is new. Explore your other options, such as a lease transfer. You can advertise your lease for assumption if your bank allows it. You may lose your original down payment amount, but your loss may prove cheaper than the cost of termination. Check with your leasing bank to determine if a lease transfer is possible. If you want to pursue another vehicle purchase, you can also sell your vehicle or trade it in for your lease purchase amount. You can contact your leasing bank at any time to obtain the car's purchase cost.
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