What happens if you terminate a car lease early

Pcp arrangements are easier to escape as you may be able to sell the car to help meet the settlement figure. Your Postcode: A big part of our site is helping you find the best deals available in your area. Vehicle Type Cars Vans. Vehicle Payment Terms Initial Payment 3 months 6 months. Adv Search. Trim Any Trim. The downside is that you would be extending your financial commitment to lower your payments. Your leasing company may offer lease buyout financing, but if not, many auto refinancing lenders do as well.

Some will loan you more than the car is worth, if your buyout price is higher. Your monthly payment. Option 1: Sell your car to a dealer. Option 2: Swap your lease. Your Car-Buying Cheat Sheet. Get Nerdy quick tips on how to streamline the car-buying process even before you hit the dealership.

Download for Free. Option 3: Buy your car, sell it yourself. Option 4: Buy your car and keep it. On a similar note Dive even deeper in Auto Loans. This can make your monthly repayment quite a bit more expensive, of course. If you're truly desperate for a shiny new state-of-the-art car, paying extra for 8 months might be worth it for you. This is the nuclear option.

When you absolutely, categorically can't make your payments, you're going to need to default on your loan. In this scenario, you need to contact your lease company and tell them you want a voluntary repossession of the car. This comes with fewer penalties than a forced repossession, where you refuse to give the car back and don't make the lease payments At this point, your finance company will let you know your options.

In most cases, the company will want to work with you and can offer arrangements to let you keep the car and perhaps pay them off over a longer-term sometimes with interest. If this isn't an option, you will need to hand the car back. Of course, you're then liable for the remaining lease payments and will have to pay back the debt at some point.

This is obviously a very stressful situation to be in. Defaulting on your car lease will punch a huge dent in your credit score and may reduce your chances of getting a mortgage, or a personal loan if you need one. If you're stuck in this situation, it's important that you seek debt advice. To recap, if you decide that you absolutely want out of your lease, whether you can't pay or just want a new vehicle, you should take the following steps:. Of course, the best option is to not need to end a car lease early at all!

Make sure you take out a lease that is affordable for your budget, and that you're not struggling to pay. If you put a private plate on your financed car , you'll make arrangements with the leasing company or new lessee to make sure you get your plate back.

Check out Lease Fetcher to compare lease deals. You'll find the cheapest personal car leasing and business car leasing deals available right now through us. But there are other less-costly options that may be available to you, too. But it also means that you have to turn in the car and pay the balance due, including any costs, fees and penalties associated with early termination.

The federal Consumer Leasing Act requires that details for terminating your lease early be disclosed in your lease. So what happens if you terminate a car lease early?

First, the lease company may charge an early termination fee, which is normally the difference between the remaining balance owed on the lease and the credit you receive for the current value of the car, based on the calculations detailed in your lease.

You may also have to pay fees like vehicle disposal fees, transfer fees and taxes. If you end up defaulting on your car lease, the car might be repossessed, which could negatively impact your credit. Due to the way lease contracts are written and the fact that cars normally depreciate more upfront, the earlier you terminate your lease, the higher the cost will usually be. In fact, the costs can be so high that early termination may cost you more than keeping the car for the full lease term.

Terminating your car lease early may not be the cheapest way to get out of a lease. And make sure you transfer the lease to someone you know is responsible, because you can still be on the hook for the lease.