Consumers in California have lease holder laws that offer protection beyond the federal laws. Whatever your reason for wanting to get out of a lease, if you do not have a “cooling off” clause in your contract, it is recommended to proceed with caution. The laws allow consumers in California to terminate a California automobile lease at any time, but early termination could result in substantial fines as well as affect your credit rating.
First check your lease contract to see if there is an early lease termination clause. Most contracts offer drivers a few days to settle their purchase, allowing a chance to get out of the deal before it is made final. If your contract has this and you are within the predetermined period, you can return your purchase to the dealer in accordance with the rules described in the lease.
If terminating the lease and returning it to the dealership results in expensive penalties, another option would be a lease transfer. There are many online services that match people who want to get out of a lease with someone willing to take it over. The fee for this service is often much lower than terminating a lease. Note however, that the company you have a lease with will need to approve the potential lessee’s credit if the transaction is allowed at all. Ask your leasing company what their policy is before making any agreements and get everything in writing. Some companies will often hold you responsible for the lease if the new lessee defaults.
As a last resort, you can terminate the lease and return the vehicle to the dealership. This is usually the most expensive alternative. Fees will vary according to the vehicle value, how far into your lease you are, and how many miles you have accumulated. After returning the vehicle, your leasing company must notify you in writing that they intend to sell your vehicle as used. This gives you approximately ten days get the vehicle appraised. It is recommended that you get an independent car appraiser to assigned a value to your vehicle. If the appraiser say the vehicle is worth more than the assigned residual value, the leasing company is required to lower your termination fees.
