Top Dealership Alternatives for Ending Lease

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1. Direct Lease Buyout

One of the most common alternatives to working with your dealership is to purchase the vehicle yourself. For this to work, you can buy your vehicle for the predetermined residual value as stated in your lease contract. This works well if you have higher market value in the car than you do the buyout price, or if you just want to avoid those wear and tear or excess mileage fees.

How It Works:

With this option, you have to contact the leasing company – this is not the dealer, to be clear, this is the financing bank. They will determine the buyout price you need to pay, including taxes and fees.

You then buy the vehicle outright, paying whatever amount they ask, and you are responsible for handling the title transfer and registration for the vehicle after that. This helps you avoid going through the dealer and paying extra dealer fees, but it also increases the amount of work you have to do.

Pros:

This avoids disposition, excess mileage, and wear-and-tear fees; you build equity
You get to keep the car you already have

Cons:

You are responsible for paying cash for the balance owed
You are also responsible for managing the paperwork too, including the title transfer and registration with the DMV

2: Buy the Car Outright with Lease End

With Lease End, you can buy your car outright without needing the cash, and instead taking on an auto loan. This is a great option if you want to keep your vehicle but you want to get out of the high payments on your lease, because you can connect with another bank that gives you more favorable terms, making it easier to own the car.

With this process, you would be connected to banks which give you the loan you need to buy the vehicle outright from the current dealership, effectively terminating your lease. From that point onward you would start paying down a monthly loan payment with more favorable conditions.

This process takes under 12 minutes from the time you start to the finalized paperwork. What’s more, they handle the DMV documents for you, so you don’t have to stand in line.

How It Works:

The process is very similar to a direct lease buyout, but the difference is that Lease End secures financing on your behalf so that your new auto loan payment is likely more favorable than the lease agreement. They handle all of the paperwork process on your behalf, including the title transfer and registration, so you don’t have to go to the DMV.

Pros:

You have the option of keeping your car outright
You can buy your car and choose to sell it later
You don’t have to go through the dealer to secure financing or transfer the title to your name
You work with a third party to facilitate it

Cons:

If you decide to sell the car after the transfer, those profits might be taxable

3: Sell to a Third-Party Buyer or Dealership

If you have a vehicle with a current market value higher than the amount remaining for your lease payoff, one of your options is to sell that vehicle to a third party buyer or another dealership.

Now, if the goal is to avoid a dealership, you are left with a third party buyer like CarMax or Carvana.

If you are able to sell it to this third-party company, you could potentially walk away with a little bit of profit as well, but remember that this only works if the current market value is higher than your total payoff, and that payoff includes the residual value and any remaining payments you have on the vehicle.

The issue here is that not all lease agreements allow you to do this. If you aren’t sure whether your agreement allows for it, you’ll have to read over the terms carefully or contact your dealership to see if it’s okay.

Even if it is ok, there is no guarantee that anyone will buy it, let alone purchase it for what you owe or higher. You might end up selling your vehicle for less and still have to pay the difference when the transfer is made.

How It Works:

With this process, you can get an appraisal from places like Carvana or Carmax. These are third-party sites where you can post your leased vehicle. Potential buyers will have a chance to look at it, and if they choose to, purchase your vehicle. In doing so, this can pay off your lease.

If there is any difference – let’s say the remainder on your lease is $16,000 and you sell your vehicle for $18,000 – you get to keep the difference.

Pros:

This is a potential to profit if you can sell your vehicle for more than the remaining balance due on your lease
It simplifies the process for you, because a third party handles the transfer and sale

Cons:

You might not be allowed to do it based on your contract, so you have to check your leasing terms
Even if it is allowed, there’s no guarantee of a sale, let alone a profitable sale

4: Lease Transfer/Swap

This is where you transfer responsibility to another person. The other person then takes over however much time remains on your lease contract. For some people, this can be the most cost-effective way to make an early exit as long as you can find someone who’s willing to take on your vehicle.

If you are struggling with restrictions on selling to a third party, a lease transfer or swap might be a good alternative. There are sites like Swapalease.com and LeaseTrader.com, both of which let you post your vehicle and then process the paperwork.

However, whoever takes over the lease has to be approved by your leasing company, and it’s going to cost you to process this transfer through a third party. If they take over, and they default, chances are you will still be held financially responsible for the remaining payments.

How It Works:

With this option, you hand the lease over figuratively to someone else. They know that there is a lease, and they agree to take it over for the remainder of the lease contract. If you want to make an early exit from your lease and you don’t want to keep the vehicle, this can be an alternative.

Pros:

You won’t have to make the rest of your monthly payments or lease obligations, although you might need to be a cosigner

Cons:

You have to find a willing buyer, and that’s not a guarantee
The leasing company has to allow such a transfer
The leasing company has to approve whoever is taking over your lease
If whoever takes over your lease defaults on the payments, you are likely still financially responsible

5: Extend the Lease

The final option is to ask the leasing company for an extension. This is still an alternative to working with the dealership to buy your vehicle outright, but it gives you time to decide whether a new purchase might be more favorable in the future, or buy you time if, for example, you know you’ll have a change in financial circumstances soon.

How It Works:

For this choice, you have to contact your leasing company and ask them for either a short-term extension or a month-to-month extension to buy you time.

Pros:

If your lease is about to expire, this can give you some flexibility

Cons:

You still have to make payments, and you might incur additional maintenance costs once the vehicle exceeds its warranty period

Summing Up

While there are a few options, the top dealership alternatives for ending a lease is using Lease End. In an ideal world, all of the other options might be available to you as well, but your lease agreement might prevent you from selling to a third party like Carvana or CarMax.

Even if your lease agreement allows you to do a lease transfer or swap, your leasing company still has to approve the new person, and you might be required to stay on as a cosigner, keeping you financially tied to your vehicle.

The best course of action for ending your lease early is to find funding immediately from a reputable bank, by filling out a quick questionnaire in under 12 minutes with Lease End, signing up for your new auto loan, and letting Lease End handle all the title and registration transfer on your behalf.