How To Get Out of a Car Lease Early (Without a Big Penalty)

Leasing a car can be a smart way to drive a new car without a long-term commitment. You usually get lower monthly payments and avoid some of the hassles that come with owning a vehicle. But things can change. Maybe your financial situation has shifted, your transportation needs are different, or you just can’t afford your auto lease anymore.

So, what can you do if you need to get out of a leased vehicle early?

It’s true that early lease termination can be expensive. But many people are able to walk away from their lease — or at least lower the costs — by exploring options like lease transfers, buying and selling the car, or trading it in for something more affordable. Some even qualify for temporary payment relief through their lender.

Let’s walk through how to get out of a car lease early and which options might help you avoid major penalties.

What Happens if You End a Lease Early?

Most car leases come with rules that make it tough to walk away early. This is because leasing companies factor in the depreciation (how quickly the value of the vehicle drops) when calculating your monthly payments. So if you leave the lease early, the company might not recover that cost.

Common early lease termination fees include:

• A hefty early termination fee

• Remaining payments on your contract

• A possible lease transfer fee

• Fees for preparing the car for resale

• Negative equity if the value of the car is lower than the lease balance

• Costs tied to your location, like sales tax or state-mandated charges

These penalties can vary depending on the terms of your contract and where you live. That’s why it’s important to read your lease agreement and talk to your lender before making any decisions. Not paying your lease balance or fees can hurt your credit score and may even lead to collections.

How To Get Out of a Car Lease Without Penalty (or With Minimal Cost)

If you're wondering how to get out of a car lease early without penalty, the good news is that many people find workarounds that cost far less than breaking the contract outright. Here are a few paths to explore:

• Transfer your lease to someone else

• Buy out the lease and sell the car

• Trade in the leased car

• Ask your lender about payment relief

Let’s take a closer look at each of these options.

Transfer Your Lease to Someone Else

A lease transfer (also called a lease assumption or lease swap) allows another person to take over your remaining lease payments. You're removed from the contract, and the new lessee drives the car. This is often the most affordable way to get out of an auto lease early.

To get started:

• Check your contract for lease transfer terms

• Call your lender or leasing company and ask what’s required

• Make sure the person taking over the lease qualifies

• Expect to pay a small lease transfer fee

Websites like Swapalease and LeaseTrader help connect people who want to get out of their lease with those looking for short-term leases. These platforms make it easier to find a qualified buyer and speed up the process.

Just know that some leasing companies restrict transfers or still hold you partially responsible if the new lessee defaults. So it’s important to ask questions and understand the full agreement.

Buy Out the Lease and Sell the Car

Another option is a lease buyout. That means you pay the payoff amount to purchase the car from the leasing company. You can then sell the vehicle to a private buyer, dealership, or family member.

Before you choose this option:

• Ask your lender for the payoff amount, which is often based on the residual value — the car’s estimated worth at the end of the lease

• Compare that to the value of the car on the current market

• Factor in sales tax, registration, and other fees

• Be sure you can sell the car quickly enough to avoid holding onto extra costs

If the car is worth more than your buyout price, you might even make a profit. This can happen when used car prices spike due to low inventory or high interest rates on new loans.

Keep in mind: If you make a profit, you could owe capital gains tax, especially if the car wasn’t used for personal driving. If you're not sure how this works, many people talk with a tax professional before moving forward.

Trade In the Leased Car

If you still need a car but want a better fit — maybe something with more accessibility features or lower monthly payments — you can consider trading in your current lease. Many dealerships will accept a leased vehicle as a trade-in, especially if you're buying or leasing a different car from them.

Here’s how it might work:

• The dealer evaluates your car’s condition and residual value

• They pay off your lease balance (or roll it into your next financing plan)

• You get a different car — sometimes with dealer incentives or special offers

If you’re financing the next vehicle with an auto loan or car loan, the down payment you make (or the trade-in value) can help lower your monthly costs. Just make sure you understand how any remaining lease fees will be handled in the new contract.

Ask Your Lender About Payment Relief

If your main issue is affordability, and you want to keep your car for now, contact your lender or leasing company directly. Some leasing companies offer:

• Temporary payment deferrals

• Reduced monthly payments

• Lease extensions or modified terms

These hardship options may be available for people who lost income or are facing temporary hardship. But it’s important to know this is not lease termination. You’ll still owe the money later, and interest may continue to add up depending on your lease terms.

Still, if you need some short-term breathing room while you figure out next steps, this could help.

Before You Decide, Read the Fine Print

No matter what option you’re leaning toward, take a careful look at your lease agreement first. Look for:

• Early lease termination clauses

• Transfer and buyout rules

• Any required notices or approvals

• Payoff amount and residual value

If the terms are confusing, don’t worry. A quick call to your lender or leasing company can help clarify things. If you’re still unsure, many people choose to set up a free consultation with a consumer attorney or talk to a financial counselor who can explain your rights

Let’s Recap: How Can You Get Out of a Car Lease Early?

Here are four ways many people get out of a car lease without paying huge penalties:

• Transfer the lease to someone else through your leasing company or a site like Swapalease or LeaseTrader

• Buy out the lease and sell the car, especially if its current market value is higher than the payoff amount

• Trade in the leased vehicle when buying a new car or more affordable option

• Talk to your lender about lowering or deferring payments during financial hardship

Whether you’re trying to break a lease or just looking for more accessibility, getting out of a car lease early is possible, and it doesn’t always have to break the bank. The key is knowing your options and comparing what makes the most sense for your situation.