Auto Loans

Ultimate Guide to Buying Out of a Lease Early

Most vehicle leases last between two and four years. At the end of the lease, the leasee can buy the car, trade it in, or return it. But what if you want to get out of your lease before the contract ends?

Can you get out of a car lease early? If so, is it worth it? Lease contracts do include the option to terminate the lease early. However, the leasing company will usually make sure it still earns a profit by charging you fees and/or penalties.

Here’s everything you need to know to determine whether buying out of a lease early is right for you.

How much does it cost to buy out of a lease early?

The costs to buy out of a lease early can vary from one company to the next. Different companies charge different fees.

Besides the transaction costs included on any lease buy-out (buyout and transfer fees), an early lease termination will likely incur other fees”

For example, Ford has a section in its lease agreement titled “Voluntary Early Termination.” It says that you must pay the following when ending your lease early and returning the car:

  • An early termination fee (if applicable), or the sum of the remaining unpaid payments
  • The difference between the current balance and the fair market wholesale value of the vehicle
  • All other amounts due under the lease, including penalties for excess wear-and-use, excess mileage charges, and any applicable disposition fee

Further, U.S. Bank states on its website that the penalty for ending a lease contract early and returning the car can run up to several thousands of dollars, including:

  • An early termination fee (if applicable)
  • An early termination administrative charge – the amount of this fee is determined by how many months remain in a lease term
  • Unpaid amounts that are due or past due
  • All taxes, fees, and other charges
  • Expenses related to selling the vehicle and preparing it for sale
  • The lease balance, plus the residual value, minus the realized value of the vehicle

Since the costs vary, you will need to check with your dealer or leasing company.

If you decide to end the lease early and buy the leased vehicle, the fees will be different than if you were to just buy out of the contract.

Costs to buy out of a lease early and keep the car

Besides the transaction costs included on any lease buy-out (buyout and transfer fees), an early lease termination will likely incur other fees,” says Rob Campbell, an analyst in retail automotive for Withum, Smith, and Brown, PC.

He explains, “You can call most major leasing institutions to find out the early termination vehicle value and how much you owe in remaining payments. You will be responsible for these charges in addition to the residual value in order to buy the vehicle before termination.

For example, say you have 10 months to go on your $350 per month lease, and you decide to buy the car. In many cases, you will need to pay the residual value, $3,500 for the remaining payments, and the early termination fee.”

In summary, the typical costs to buy out of a lease and keep the car include:

  • Buyout fees
  • Transfer fees
  • Early termination fee
  • The residual value of the car
  • Remaining payments on your lease
  • Taxes

The Federal Consumer Leasing Act does require the lessor to state the conditions under which a lease can be terminated early and the amount of any penalty or cost (or a description of the method of determining the amount) in the lease agreement.

Being so, you can figure out your costs by looking over your contract and/or by contacting the dealer from which you got the lease.

Find out how to negotiate down your lease buyout price like a pro.

Is buying out a lease worth it?

To find out if buying out of a lease is worth it in your situation, you’ll first need to figure out how much it will cost in total. Then, you can weigh the pros and cons to determine if the cost is worth the value.

It is often better to wait it out, since buying out of the lease early and keeping the car often requires you to pay your remaining lease payments plus the fees.

However, if you want to buy and sell the car and can at least break even, it may be worth it (note: this isn’t usually the case).

Some people trade in their leased cars with a dealer and roll any amounts they owe into their next loans. But doing so can leave you with negative equity, which is not encouraged.

Before deciding on buying a leased car before lease ends, be sure to run the numbers and carefully weigh all of your options – it may not be the most beneficial move, financially.

How can you break your lease without penalty?

Using a lease trading service like is another option that can save you the early termination fee. This site, and others like it, help you to find someone who will take over your lease payments for the remainder of your contract.

In the case that you find someone to take it over, you may be removed entirely from the lease or may remain as the loan guarantor. It depends on your leasing contract.

Either way, however, this can be an opportunity to break your lease without a penalty.

Learn about getting a lease buyout loan with bad credit

Can you get a loan to buy out of a lease early?

Yes, there are loans available that can be used to pay for a lease buyout.

If you have fair credit or better, an unsecured personal loan may be the easiest route as the lender will not be concerned with what you are buying.

The loan approval will be based on your credit score and income. You can easily apply for personal loans online and, if approved, can have the money transferred into your account in as little as one business day. This article shows the average rates for lease buyout loans.

Below are the rates and terms offered by leading auto loan lenders that finance lease buyouts:

Another option, if you are buying the car, is to go through an auto loan lender. This can be a bit trickier, though, as some lenders do not finance lease buyouts (i.e., Capital One).

SuperMoney’s auto loan engine, however, makes it easy to get quotes from lenders who do offer lease buyout loans.

Within minutes, you can receive several competing offers without hurting your credit score. You can then compare your options to find the best deal on your lease buyout.

Get personalized offers and find your best rate here!