Can you get out of a car lease?
Updated: Dec 13, 2019
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Oh my goodness… let me tell you something about getting out of a car lease… IT’S A PAIN!
It may cost a bit of money, no matter how much you wish it didn’t, but it can still be done.
We will use our recent experience getting out of a 2018 VW Tiguan 3-year lease as a case study for this blog post.
Honestly, it's a pain. Writing this post and thinking about all the issues gave me stressful flashbacks!
If you, the person reading this article, don’t know, my wife Megan and I decided to quit our jobs and travel around Europe for an entire year! But first we had to square a few things away at home (the full list is much lengthier...this one is being used for brevity).
We needed to sell Megan’s car (she owned it outright, and kept it in great shape, so it wasn’t too hard).
We needed to get out of Eddie’s 3-year lease that we were only 1.5 years into.
Luckily, #1 and #2 occurred pretty easily. We sold Megan’s car for asking price and rented out our house to a great couple with a few rugrats. #3 was not so simple.
Turn the car in early
Buy out the lease and then try to sell the car
Keep the car
Transfer the lease to another person
Option 1: Turn in the car, ending the lease early.
Honestly, this one should be your last resort. We were 1.5 years into a lease on a 2018 Volkswagen Tiguan. It was a very nice vehicle and had been well-maintained during the time we drove it. My initial thought was to call Volkswagen and ask them if we could just turn in the keys. They would be getting a high value vehicle back early and be able to sell it (again)...why on earth would that be a bad thing? Well, car dealerships are greedy thugs (which Eddie hadn't learned by this point in his life)…
Per the contract, we would need to pay off the remaining 1.5 years worth of payments and then we could have the “privilege” of returning the vehicle to them so they could sell it again and make more money.
We would have to pay the remaining lease payments AND pay an early turn-in fee. Woof….
Total cost: ~$8,000 USD (that would be a big NOPE)
Option 2: Buy out the lease and then try to sell it
This one is a little better than just turning in the keys, but not by much. It also takes quite a bit more time and energy. Most cars lose value as soon as you drive them off the lot so you probably won’t be able to turn a profit, or be close to even.
My buyout quote from VW for my vehicle was ~$24,000 which isn’t horrible for an upgraded 2018 model VW SUV. Unfortunately, after calling a few dealerships and using a few online services, the best I could get for the car was ~$19,000. If you have more time and can put in more effort, the KBB private resale value was closer to ~$22,000 which wouldn't have been too bad of a deal.
Total cost: ~$5,000 (better than turning in the keys, but still salty in terms of cost)
Option 3: Keep the car
If you absolutely need out of the vehicle and have zero use for it, skip this section.
Honestly, this one didn’t occur to us until we saw the prices we were facing. In our situation, we were only planning to be gone for 1 year so there would still be ~6 months of the lease left when we get home. We could keep the car, insure it, and park it at a friend’s house and lose LESS money than the first two options.
This was still a little too expensive for us and we didn't want to have to deal with a lease and vehicle turn in once we got back. Asking a friend to let this car sit at their house and waste space for an entire year was a bit more than we wanted to ask. We nixed this option along with the first two as well.
Total cost: ~$4,500 (we keep chipping away at this number but we're not where we want to be yet)
Option 4: Transfer/swap the lease to someone else (winner winner)
There are services that will help you transfer your lease (www.swapalease.com) but they usually charge a fee.
Most charge you twice: 1) to list your vehicle and 2) to process the swap.
If you need someone else to handle the paperwork and help you find someone that wants to take over your lease, this process will cost you ~$1,000 based on how much the manufacturer charges to change the name on the lease.
Alternatively, if you already have someone who wants your car and you’re organized and willing to put in the time, you can do it yourself. This is what we did.
I called Volkswagen to discuss the process and it was fairly simple. VW only allows you to ADD someone to your lease. You can’t fully transfer it. We were not interested in having a random person just added to our lease since we would still be liable if the rando skipped town.
Luckily, a family friend was interested in the car so off we went...
We ended up paying one additional month on the lease (since their prior lease wasn’t up for another month), paying VW for the transfer, and paying for a credit check of the new lessee.
Total cost: ~$750 (Around $300 of processing fees for VW to add the person to the lease and $325 for one additional payment for August and $100 for credit check. Wayyyyy cheaper than the other options).
What we learned:
Only lease a car if you know that you’re going to go through with the entire lease. After months of searching and trying different techniques, we were not able to find a way out of the lease without losing a decent chunk of money. However, if you do need out of a lease, transferring it is *probably* going to be your best bet.
We also learned that leasing a car may sound nice up front with the low monthly payment. It may not be the best, long term solution though if you have a fluid lifestyle that may pull you to lengthy adventures at a moments notice.
Eddie + Megan
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