Many people find leasing a car a cheaper option because of the affordable monthly lease payments.

However, due to unavoidable circumstances, you may need to swap out your leasing contract. It is expensive to terminate your leasing contract before the end of the term. This is because you still have to settle your remaining monthly payments. You will also have to pay some penalties for early termination. Here are some ways you can transfer your lease without having to pay additional penalties.

Swap lease with another buyer

Car Dealership

With this option, you need to find someone who is willing to lease your car and make the remaining payments. You will need to check with your dealer to see if this is possible before you place ads online. Some car manufacturers don’t allow transfers if they are made with the first 12 months of the lease.

You will need to check the small print of your lease term for the terms and conditions. There are many car leasing swap websites, you just need to find one that suits you. The transfer of the current lease to another buyer does not release you from the liability fees after the transfer. The other party is still forced to pay any exit fees due, such as excessive mileage fees.

Buy the car then sell it

The other option is to buy the car under the pre-purchase option of the leasing agreement. This option is profitable depending on the remaining lease payments and the resale value. In this case, you can avoid paying penalties for wear and tear. Next, check the current market value of the car. If the buyout price is lower, you have the opportunity to make a profit.

Selling to a dealer or private buyer

You can sell to the car dealership. They will check the value of the remaining lease repayments and the value of the car. They will then buy out the contract and issue you a cheque which you can forward to the leasing company. In this case, you will not pay sales tax.

Finally, you can find a private buyer for the car. The buyer buys out the contract, pays the remaining lease payments and buys the car. However, you may have to pay sales tax on this.

Trade in the current car for another

If you are not short of cash and have another, better car model in mind, you can exchange your current leasing contract for another one. The exit fees are included in your next leasing payments. Due to your current financial situation, it may be difficult for you to make monthly leasing payments for a large vehicle. A cheaper vehicle model can be more sensible in terms of lower monthly lease payments.

Car dealerships are only a lockout for potential long-term customers. If you exchange your existing car for another car model, you will not get rid of the monthly payments, but it will give you the satisfaction of getting a better or the latest car model. The dealer will transfer your remaining car lease payments to the new business.

Cost of prematurely terminating your lease

Car Leasing

In most cases, the lease terms contain a list of penalties that are due if you cancel the lease before it expires. The penalty, also known as the early termination fee, can either be a flat fee or calculated using the balance sheet reduction method. It is higher than your remaining monthly lease repayments. However, the biggest negative effect of early termination of the lease is that you will incur negative equity of the vehicle.

The equity of a car during a lease is the difference between the value of the lease at termination and the market value of the car. If the market value is higher you have positive equity, if it is lower than the residual value you have negative equity. Positive equity is good because it allows you to make a profit from reselling the car.

In addition, the lessor can include other costs such as storage charges, unpaid taxes for the lease and costs for transporting the car. If you combine all these costs with an excessive charge for dents, you will have all costs in mind. You should not choose this option until you have exhausted all other options.

The conclusion of a leasing contract results in enormous cost savings for many entrepreneurs, as the leasing interest is tax deductible. It also gives many people the opportunity to drive away with cars they could not afford if they were new. However, terminating a leasing contract is not easy. The consequences of negative equity and penalties make it extremely difficult for people to terminate their leasing contracts prematurely.


Car owners who are no longer able to use their car and wish to terminate the leasing contract are offered various options. In summary, the first option is to return the car and pay all penalties due before the end of the leasing contract. This is the most expensive option and we advise against it. The next option is for the car owner to use the buyout option. In this scenario you buy the car in the middle of the lease term and then sell it to another buyer.

For this to work, the market value of the car should be higher than the value of the equity. If this is not the case, it is better to wait for the lease to end and simply return the car. Before you decide on this option, check the terms of the leasing contract to see if they allow for a buyout. Buyouts do not release you from the obligation to repay the remaining payments of the leasing contract. Thirdly, you can carry out a leasing swap. There might be someone who is interested in the car you are using. Once you have identified this person, you can carry out a leasing swap with him/her and he/she will take over the rest of the leasing contract.

Before the Internet, it was difficult to find someone for a leasing swap, but today there are many websites that offer this service. You have to pay a fee to be listed on the website. The person with whom you swap the lease is obliged to continue to comply with the terms of the lease.