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If your leasing company offers the option, ending your car lease early means you're released from making remaining payments on your current leased vehicle. But it also means that you have to turn in the car and pay the balance due, including any costs, fees and penalties associated with early termination.
With a lease you are financing the use of the vehicle compared to financing the purchase when you buy with a car loan. When you trade in your leased car, the dealer -- any dealer -- will pay off the lease and the cost of the payoff goes against the trade-in value of your leased vehicle.
It's impossible to trade in a leased car for money in the same way you might trade in a car you own. A few options can help you trade in that old leased vehicle for a new lease or a car you own.
You can upgrade your car lease, usually close to the end of your term. Even if you do not qualify for a program, you are sure to find a dealer who wants to earn your business. Don't be surprised if you can upgrade without paying any money towards your lease termination by using a different manufacturer dealership.
Returning a Leased Car Before the Lease Ends Since you don't own a leased vehicle you also don't accrue any equity. However, if your early payoff amount or the sum of remaining payments is not greater than the trade-in value of the vehicle then you might have some positive equity for a trade-in credit on a new car.
Whether you terminate early and simply pay the payments/buyout the vehicle, or you roll the payments into a new lease or purchase. There are specific times that the vehicle may be worth more than the buyout, but this is extremely rare. Yes, you can indeed pay your lease of early.
Options For Terminating A Car Lease Early. 1) Pay off all remaining lease monthly payments. This is the dumbest option you can choose because you presumably want to get out of your lease or no longer want the car. There's no advantage paying off the remaining monthly payments and returning the car to the dealer.
When you take out a car loan to buy a vehicle, a portion of your monthly payment goes toward paying off that vehicle (the principal) while another portion pays the finance charge. In a lease, your payment goes toward the use of the vehicle plus the finance charge. You never pay off any principal.
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