A car lease is a binding contract, so putting your signature on the dotted line typically means you’ve got a deal. If you get cold feet after signing a car lease, you’ll need to weigh your options carefully to see whether you have a way to back out of the contract.
Your lease contract should have a section or clause covering the details of cancellation. While not guaranteed, you might find a clause in the small print of your lease that gives you a cancellation grace period at the beginning of the lease. This short period -- maybe 24 or 48 hours -- could be the only time you could back out of the lease and return the car without penalty. If your lease doesn't mention a grace period, you don't have this option.
Sometimes, a lease might be subject to contingencies on the part of the dealer. Contingencies generally have a specific period, and if the party doesn’t satisfy the contingency, the contract isn’t binding. Check your lease to see if any contingencies exist during the first four days of the contract. If you find a contingency, and the dealer doesn’t meet it, the dealer needs to notify you of the voided contract. This means that you return the car, and the dealer returns any money you paid. If you don't find contract contingencies, they aren't part of the contract.
If a defect occurs with the car, explore the lemon laws of your state. A lemon law would protect you and give you recourse with your lease to help you back out of it. If you successfully sue the lessor of your car under a lemon law, you would get the lease voided, and you would get a refund of all money paid for a down payment and any monthly payments you’ve made.
If you really want to back out of the lease, it’s probably possible, as long as you’re willing to pay any fees associated with canceling the lease. Check your contract to find out what the lessor requires of you to cancel. You might have penalty fees and you may also need to pay a specific number of monthly payments before you can end the lease. If you don’t follow through with the requirements of the lease contract, your account could move to collections, and you'll get a negative hit to your credit score.
- Washington State Office of the Attorney General: Buying a Car
- CarsDirect: Car Lease Termination: How to Avoid Penalties
- Consumer Financial Protection Bureau. "What Should I Know About the Differences Between Leasing and Buying a Vehicle?" Accessed April 12, 2020.
- Merriam-Webster. "Lease." Accessed April 12, 2020.
- AARP. "To Buy or Not To Buy." Accessed April 12, 2020.
- Consumer Financial Protection Bureau. "What is a Manufacturer Suggested Retail Price (MSRP)?" Accessed April 12, 2020.
- LeaseGuide.com. "Capitalized Cost – Cap Cost." Accessed April 12, 2020.
- Autotrader. "Leasing a Car: Can You Negotiate the Price?" Accessed April 12, 2020.
- Edmunds. "The 'Residual Value' of Leasing." Accessed April 12, 2020.
- Federal Reserve. "Keys to Vehicle Leasing: Future Value." Accessed April 12, 2020.
- LeaseGuide.com. "Money Factor—Explained." Accessed April 12, 2020.
- Federal Trade Commission. "Financing or Leasing a Car." April 12, 2020.
- Federal Reserve. "Keys to Vehicle Leasing: End-of-Lease Costs: Closed-End Leases." Accessed April 12, 2020.
Kathryn Hatter is a veteran home-school educator, as well as an accomplished gardener, quilter, crocheter, cook, decorator and digital graphics creator. As a regular contributor to Natural News, many of Hatter's Internet publications focus on natural health and parenting. Hatter has also had publication on home improvement websites such as Redbeacon.