Early Lease Termination: Risks and Costs

Educational explainer. U.S.-focused; costs and rules vary by state and by country.

Ending a lease early is usually expensive because you’re breaking a contract that assumed fixed payments over time. Before you act, understand what you owe and what alternatives exist.

Rule of thumb: Get an official payoff quote from the lessor before you decide—don’t guess.

Key points

Early termination can include remaining payments plus fees.
Lease transfers can reduce cost if allowed by your lessor.
Trading in the vehicle doesn’t erase what you owe; the numbers still reconcile.
If you’re near the end, it may be cheaper to finish the term.

FAQ

Is a lease transfer better than termination?

Often yes if your contract allows it and you can find a qualified transferee.

Can hardship waive fees?

Rarely, but it can be worth asking the lessor directly.