How to End Your Car Lease Early (Explained by a Car Dealer)

Written by Ray Shefska

My career in the retail automotive business started in 1977. Buying a car doesn’t have to be anxiety inducing, stressful, or painful. Instead it can be confidence inspiring, fun, and convenient. Let me show you how.

April 20, 2020

One thing you learn as you get older is that there’s no such things as an “easy way out.” Although, when it comes to ending your car lease early you may have a few options. Depending on your circumstances, there are a few creative ways you can end your car lease early without hurting your bank account.

Car dealers, and their manufacturers are always looking for two things;

  1. Ways to make more money; and
  2. Ways to sell more cars.

If your lease isn’t due for another few months, but you really want to get into a new car, the odds are that a dealer is going to put their best foot forward to help you make that a reality. Why? Because they’ll make money selling the new lease, and they’ll sell another car. Both of those things benefit the dealer.

Although, this positive attitude needs to be taken with a grain of salt. Your current lease agreement is a legally binding document. It says you will make a certain amount of payments over a certain term, and that if you don’t, there will be specific consequences.

Buying a car (and getting a good deal) is all about leverage. If your lease isn’t due for 3 months, and you have a legally binding contract that says you’ll make the remaining payments, you don’t have too much leverage. Don’t fret though, because remember, the dealer and the manufacturer do want to help you get into a new car, but they also don’t want to give up the money they could be making if you completed the full term of your lease.

With all this being said, there are some creative ways you can approach this situation. Let’s get into the weeds of how you can end your car lease early.

Will they “forgive” my payments?

The short answer is “no.” The long answer is “probably.” Why do I say that? Because a lot of factors are in play.

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First, how many monthly payments do you have left on your current lease? One, two, twelve? If you have less than three, the odds are high that the dealer and the leasing company will work with you to forgive your remaining lease obligations in exchange for getting into a new car (although there are caveats to this that we’ll cover below). On the other end of the spectrum, if you have six, eight, or twelve payments left on your lease, there is less likelihood that the dealer or the leasing company will have any interest in helping you out. Why would they? You’ve got a whole year’s worth of payments to continue making, and with each check you write, they make money.

Take a look at your original lease agreement and locate the termination date of the lease (the date you would return the car if you completed the lease). You can typically also find this information in your online payment portal, if you have access to that. This date is the most important thing for you to keep in mind, and it’s the date that the dealership and the leasing company will be referring to when they consider how “friendly” they’ll be in forgiving your remaining lease payments.

When will they “forgive” payments? (Lease pull ahead programs)

To end your car lease early without penalty, you’ll want to research lease pull ahead programs. Car lease pull ahead programs are specific incentive programs that leasing companies create to entice prospective customers to lease a new vehicle.

Leasing companies generally do not provide this information in a publicly available way. Instead, each month the captive finance company (BMW Financial Services, for example) will send it’s dealerships (BMW dealerships) a list of new and ongoing incentive programs for customers.

These lists are humongous, complex, and not particularly easy to understand. Within these monthly guidelines dealers may find pull ahead programs (among other things) that are intended to incentivize customers to buy new cars. Keep in mind that incentive programs are different for each region within the United States. Two dealerships may have two very different incentive programs in any given month. This is partly why you don’t see lease pull ahead programs advertised nationwide.

You can try and find this information online, although your best bet is to call your local dealership, or the leasing company itself.

End of Lease Options Chrysler Capital
Here’s an example of lease end options from Chrysler Capital. At 90 days out from lease end they’ll start to help you if you want to lease a new car with them again.

If you want to research online for lease offers, my recommendation would be to search for a specific manufacturer, for example “Chrysler lease offers” and go directly to the manufacturer website (like the example above).

Or, another option that is worth your time is a website called LeaseHackr, where individuals share lease deals they are aware of. Be warned that the offers you see on this website may not be available in your specific area.

It’s important to understand that dealers and leasing companies typically have more incentives in place if you lease the same vehicle, or with the same manufacturer again. Generally speaking, there are fewer programs if you end your lease early with Audi and then get a BMW, other than a conquest program to encourage a current Audi owner to move to a BMW, for example. That isn’t to say that programs don’t exist (they do), it simply means that incentives and offers are greater when you stay with the same brand from one lease to the next, especially when you want to end your current car lease early.

When does it make sense to end your car lease early?

To this point we’ve talked about how you can end your lease early, but we haven’t spent any time discussing when it makes sense to actually do so. If you’re reading this near the time of its publication (April of 2020), then you know we are in the midst of the global coronavirus pandemic. It may be surprising to read this, but now (this month) is a good time to end your car lease early and get into a new car.

There are two reasons why.

  1. First and foremost is that leasing companies are offering very aggressive incentives to sell new cars right now. With that in mind, you should be able to negotiate a good deal.
  2. Residual values are most likely going to decrease starting next month (May). The residual value of all cars is most likely going to decline as there is an economic downturn and less demand for vehicles. With that in mind, if you leased a car this month (April) your lease payment will most likely be substantially less than if you lease the same car next month. (May).

At the end of the day, if you’re looking to end your car lease early you need to recognize that you have a legal obligation to fulfill the contract you signed. With that being said, you know that dealers and leasing companies want to lease you a new car, and you can use that to your advantage to ask for incentives and programs to help offset the remaining payments you have on your current lease.

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