How to Break an Auto Lease Agreement

Written by michael ryan
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How to Break an Auto Lease Agreement
Breaking an auto lease agreement can be a costly proposition. (contract 20309 image by pablo from

Although an auto lease agreement allows you to get a car that is more expensive than you could afford with a traditional finance contract, it can be difficult to break an auto lease agreement without sacrificing your credit score. For some lessees, a voluntary repossession and the following damage to your credit report seems to be the only choice to get rid of a lease you can no longer afford, or a lease on a vehicle that no longer meets the needs of your family. However, other options are viable depending on the mileage restrictions and terms of your auto lease agreement.

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    Pay the Early Termination Amount

  1. 1

    Contact your finance company to get the payoff amount on your lease. You may be able to access your lender's online account centre to get an "early termination" amount for your lease. The early termination amount is equal to all remaining payments on your lease, plus any other end of lease fees like the disposition fee. If you are over the allowed mileage on your lease, an over-mileage fee is also due.

  2. 2

    Determine if your leased vehicle costs you more than it is worth to drive on a daily basis. For example, if you are over the allowed mileage on your lease but have many months left to go on your lease, it could be advantageous to pay the early termination amount to end the lease. Otherwise, driving the vehicle will cost you the scheduled monthly lease payment, plus a per-mile fee for additional miles driven for the remainder of the lease term.

  3. 3

    Turn the vehicle in and pay the early termination amount. Depending on your finance company, you may need to remit payment for the early termination amount directly to the finance company. In other cases, you can make the payment to the dealership, who then applies the payment to your account and remits the funds to the finance company on your behalf. Choose the option that works best for you.

    Transfer Your Lease

  1. 1

    Determine if your lease may be transferred. Contact your finance company to confirm that your lease can be transferred to another lessee. A lease transfer fee may be due to the finance company, but it is significantly lower than most early termination fees. A prospective lessee will only be interested in the lease if you are under the maximum mileage allowed by your contract, so make sure you are below the mileage listed on your contract. Swapping a lease lets you break your lease agreement early and transfers all responsibility for the lease to the new driver.

  2. 2

    Find interested parties. Websites like, and charge a modest fee for current lessees to offer their leases to other drivers. Advertising your vehicle in a local newspaper or classifieds website could also produce results, but these ads reach smaller audiences.

  3. 3

    Complete lease swap paperwork. In most cases, the consumer assuming the lease must qualify for credit approval from the finance company to take possession of the vehicle. Depending on the leasing company through which your lease is financed, an application fee may also be due.

  4. 4

    Transfer the vehicle. Once approved, you will receive the final lease transfer paperwork that must be signed by you and the consumer taking over the lease. Upon completing the paperwork, the new driver can take over your lease agreement and drive the car away.

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