Leasing a car is an alternative to buying that gives you the chance to have a new car every few years. However, leases prevent you from building equity in your vehicle as you do when you buy and finance a new vehicle. Leases also include terms that require you to keep the vehicle for a specified amount of time unless you can find a creative solution to terminating the agreement.
When You're Out of Options
You may choose to terminate your lease early when you feel as though you don't have any other options. For example, perhaps you're about to move to a city where you'll rely on public transportation or simply can't afford the monthly payment that your lease entails. In these cases, you can turn in your lease early and pay the early termination fee. However, you'll also see your credit score fall when the early termination shows up on your credit report as a voluntary surrender, which is the same as a repossession, according to Bankrate. Turning in your lease early without a special deal in place is possible, but should serve as a last resort.
During a Promotion
Car dealers will sometimes allow drivers to turn in their leases early as part of a promotion. This may involve forgiving mileage overages, eliminating remaining lease payments, not charging an early termination fee and steep discounts on new vehicles. Rarely will dealers offer promotions that don't involve the driver agreeing to purchase or lease a new vehicle. However, if you can wait for such a promotion and your lease is eligible, you may be able to terminate the lease sooner than expected.
Early With a Rollover
In some cases, a car dealer may allow you to turn in your lease early if you roll the lease over into a new lease. This gives you a chance to avoid mileage overages on your old lease and also get a new car, which may better suit your lifestyle. The new lease will include the cost of the remaining payments on your old lease, which will add to the monthly lease payment. This also means that the closer to the end of the lease that you ask for a rollover, the easier it will be to afford. Rollovers don't hurt your credit report the way other early terminations do.
At the Natural Expiration
Of course, you can wait until a lease reaches its natural end to terminate it. When you sign your lease agreement, it specifies when the lease will end, usually around three years after signing. As this date approaches, you'll hear from the dealer and need to make a decision as to whether you want to buy the vehicle outright for the predetermined price or surrender it, pay for any excess mileage and wear and tear and walk away without a vehicle or any remaining obligations.
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