How to get out of a car lease fast (and cheap)

At some point in time we’ve all faced the dilemma of buying a care new, or signing onto a fixed term lease. If you’ve taken the path to lease a car, you’ve then experienced that car lease contract can feel like signing a marriage contract.

Should something in your personal life come to of left field and you need to get out of a your lease, it will cost you dearly to terminate a car lease early. Leasing companies will have engrained in your lease agreement the various fees and penalties for existing a lease early. Should you have a chat with the dealership you leased the vehicle from, you’ll then be faced with the sales pitch to swap a lease for a new one.

Many consumers have faced this dilemma either as a results of situations that change and impact their financial or personal life. Whether it be a down turn in the economy, loss of job, death in the family, going back to school, looking to get a down payment on a home or simply you want to get out of a car lease as you decided to go-green (or other personal reasons).

So lets run this scenario; you’ve leased a car and now you’re stuck. To add to this, you’ve paid 1 to 2 years on the lease or put a down payment on the lease giving you equity in the vehicle. Thus exiting a car lease early doesn’t play to your financial advantage as the payments or down payment will be lost.

This gives you one option; find someone else to take over your car lease. Breaking an auto lease early, often known as a lease transfer or swap a lease, is a popular approach for someone to exit a lease early by finding someone who wants to take over the lease for the remainder of the lease term. There are advantages to someone taking over a lease; two of which are leasing a vehicle for a shorter term than leasing new, and gaining the financial advantage of possibly paying less on lease payments per month if the previous lessor paid a down payment or offered a cash incentive to take over the car lease.

Finding someone to take over a short term lease is a popular approach where lessors have the option to connect with ‘buyers’ who are in-market to take over a lease. The most popular way of finding someone for a lease transfer is through one of the few lease transfer marketplaces online, such as

The concept of these businesses is simple: “Sellers” (lease holders) list their cars and payment details online; “buyers” (people who want to assume a lease) search for listings that match their needs. The sites connect the two parties and facilitate the process of legally transferring the lease or simply connect the buyers and sellers together to facilitate the process as in most cases it can simply be a paperwork process. Among the top four leaders in the marketplace to swap a lease or a lease assumption are, Swapalease, LeaseBusters, and LeaseTrader.

Why Would Someone Take Over My Car Lease? 
‘Buyers’ who are familiar with leasing know the advantages of taking over a car lease, but there are many reasons why someone would want to take over your car lease:

  • Why commit to a 5 year lease when you can step into a 1, 2, or 3 year lease via a lease takeover? Less commitment has its advantages.
  • Benefit from a prior owners / lessors down payment. You may avoid the down payment the previous lessor may have put down on the vehicle.
  • Opportunity to get into a more luxury vehicle at a lessor price on the lease.
  • Variety: Car junkies may prefer stepping into a new ride every 1-2 years, thus a lease swap gives you the flexibility for variety.
  • Buying a car for less. A new leaseholder might want to buy the car at the end of the lease for a preset price and benefit from a lessor price from the prior lessors down payment.

A ‘buyer’ whose considering breaking a lease early often contemplates that if their monthly lease payments are higher than the average (perhaps due to no down payment), then it would be an unattractive lease to takeover. This is a false perception as you’ll find consumers in this position will often offer a cash incentive for 1, 2 or even 3 months with of lease payments. Its an upfront cost to the original lessor, but in the end could be a far more affordable option to offer such a cash incentive upfront than ride out the remaining 12 or 24 or 36 month of lease payments. Thus any cash incentive upfront to take over a car lease can be applied against the monthly lease payments, brining down the monthly payments till the end of the lease term for the consumer assuming the car lease.

How Much Does it Cost to Swap a Car Lease? 
Every lease transfer marketplace will likely share a different fee, and these fees based on different services. The whole lease transfer process is moreso a paperwork / administration process, which the consumer can just as easily do. However some lease transfer marketplaces will help facilitate the lease transfer process for a fee, while others will charge fees for premium or featured listings to their marketplace of Buyers.

For example, leaves the admin paper work process between the consumers and leasing company, as most leasing companies will guide the consumers on the steps anyways. Instead, Lease Lease Breakers will offer an optional fee to gain greater exposure with their marketplace of +10,000 lease buyers, with the intention to accelerate finding the right ‘buyer’ to take over a car lease.

The individual assuming the lease bears the bulk of the costs in lease transfer marketplaces where there is a fee for the lease transfer paperwork process. Whereas the Seller bears the upfront fees for any additional featured listings on Auto Lease Breakers lease transfer marketplace, helping reduce any friction or disincentive with the Buyers to connect with the Seller. In either case these costs are much less than early termination penalties.

Take for example Lisa Manning New York , NY. On, she found a BMW convertible with 25,000 miles and 17 months left on the lease for only $376 per month. It cost her a total of about $780 to assume ownership of the car, which was located just three hours away. She felt it was a great deal.

“Someone else paid a down payment of $3,000 -$4,000,” Manning said, “and my lease term was a lot less than it would have been if I’d gone through a dealer.”

Lisa Manning of New York, NY was only six months into a three-year lease on a Mercedes Benz C-Class when her financial situation changed and she needed to get out of her lease. She tried to trade in the vehicle.

“It was crazy what I would have had to pay almost $15,000 to pay off the lease,” she said. Manning discovered AutoLeaseBreakers and within days, found someone to take over her $570 monthly payments. The whole transaction cost her $99 to make her lease featured on, plus the leasing company transaction fees she shared with the buyer.

Can Anyone Swap Leases? 
According to management at the online lease transfer marketplaces, its is possibly to transfer est. 80% of the time with no issues. However after a person transfers the lease, around 2% of leasing companies require the original leaseholder to retain some “post-transfer liability” for the vehicle.

There are some car manufactures that require post-transfer liability, and others depending on the province or state in which you live. There is a small percentage of leasing companies that do not allow for a transfer of a car lease. These are usually financial institutions or credit unions. So before you take on a new lease, consider this as a key factor should the need arise to terminate a leas early. If the leasing company allows for a lease assumption (lease takeover), gives you far greater flexibility should you need to exist a lease early.

A few key questions to protect yourself if you want to transfer your lease:

  • Does your current lease company allow transfers?
  • What services does the lease transfer company offer?
  • Does the person taking over a lease have good credit?
  • Do you have some responsibility after the transfer is complete?

While automakers’ finance companies were initially resistant to the idea of their customers’ leases changing hands, they’ve now grown to the acceptance of lease takeovers.

Allowing people to transfer their leases makes particularly good sense for high-end carmakers such as Mercedes-Benz and BMW, which lease out a high percentage of their new cars.

Luxury car manufacturers as BMW understand that they can hold onto these customers by letting people get out of their lease. They take a few customer-centric view with their services allowing to gain a customer for life.

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