Many of today’s consumers choose the flexibility of a car lease, allowing them to drive new cars without being tied to it for too many years. For a lower payment than financing, the lease allows drivers to enjoy a car for a few years and then turn it in for something newer. There’s no commitment to keep the car when the lease term is up.
In most cases, you cannot return a leased car until the term is over. If you change your mind after signing the paperwork, you may be stuck in the lease agreement until the end.
The Lemon Pros can help you navigate leasing issues and concerns. With a dedicated practice area for lemon cars, the team knows how to get compensation if you have a defective car. Contact us for a free consultation about your leased vehicle.
In this guide, we look at your options when returning a leased car. We also examine the possible consequences of returning a car early and discuss whether you can file a Lemon law claim.
Car leasing allows you to drive a new vehicle without purchasing it. Instead of buying the car, you pay a “rental” fee to use it for a set time, typically two to four years. At the end of the lease, you have the option to buy it or turn it back in.
As with financing, you have monthly payments that you agree upon, but they are typically cheaper since you aren’t buying the car. Usually, leases have mileage limits of 10,000 to 15,000 miles per year. Exceeding this amount will result in added costs when you return the car.
Consumers have multiple reasons for needing to return a leased car. You may be facing one of the following situations:
Sadly, not all of these are justifiable reasons for returning a car. If the dealership does take the car back, you will likely have penalties to pay.
In most cases, you cannot return a leased car, even within the first 30 days. It’s a common misconception that there’s a “cooling off” period after leasing a car, giving you time to change your mind. Unless the dealership has a clause allowing you to return it, the only way to get out of the lease agreement is if the agreement falls through with the bank.
With that said, some dealerships offer a satisfaction guarantee or exchange program if you would rather have something else. If you do some research before leasing the car, you can choose a dealership that offers these benefits.
Some leases may have an early termination option, but it typically comes with hefty fees associated with it. You want to figure out the cost before you make your decision.
To get around the fees, you may be able to take advantage of state consumer protection laws that allow you to return a car because of unresolved defects. This process can take some time and will unlikely happen within the first 30 days.
If there is no agreed-upon return option in your lease contract, you may face the following consequences:
Early termination penalties: Leasing companies can charge fees for returning the car before the agreement expires.
Added costs: You may need to pay the difference for any depreciation or remaining lease payments.
Credit score impact: Any failure to meet your lease obligations can negatively affect your credit score, making it more difficult to qualify for a loan or lease in the future.
Let’s look at an example of what you might face if you attempt to end your lease early. Of course, rates vary and terms may be different:
Let’s say you lease your car for 36 months at $400 per month. After 24 months, you’ve decided you want to end the lease. You would still owe 12 months x $400 = $4,800. Additionally, you could pay early termination fees and depreciation costs. The lease may have a fee attached to terminate early. In this case, let’s say it’s $500. The car’s expected depreciation over 36 months was $15,000 ($416/month), so if you end the lease after 24 months, you’ve paid for $10,000 in depreciation. You may still owe the remaining $5,000 + $500 fee = $5,500.
In total, that would cost you a lot of money for a car that you are no longer driving.
Some dealerships will allow you to return the car or try it out for a few days, but the terms are generally very strict. Here are some conditions you may need to comply with.
Instead of returning the car, it’s best to take a long test drive. Use that time to determine if you want the vehicle or not.
In California, the Song Beverly Consumer Warranty Act protects consumers from defective vehicles. If you bought or leased a new vehicle that has unrepairable defects, you may be eligible to return the vehicle or get a replacement.
The Lemon law rules in California are among the best in the nation, but there are still some guidelines you need to follow, to ensure your car is covered. Lemon law is not only for new cars but there’s also some coverage for pre-owned models as well.
You can return a new vehicle if it is a lemon. However, you must first prove that the vehicle is a lemon, which can be a lengthy process.
Is your car a lemon? If it meets the following criteria, it would be time to consult with a Lemon law attorney.
You may qualify for a replacement vehicle or a refund. Consult a Lemon law attorney for more guidance.
Trying to figure out how to return a car to the dealership on your own can be overwhelming. It’s best to have professional direction showing you what to do, but here are some basics about the process.
Before the dealership is going to take the leased car back, you need to prove that it’s a lemon. As evidence, you are going to need documentation of every repair attempt and the problems the vehicle has had. Gather a record of every repair invoice, work order and communication with the dealership.
You can also keep a record of how many days the car has been out of service because of attempted repairs. If it’s been more than thirty days per defect, you may be able to bypass the required amount of attempts.
You are required by law to notify the manufacturer and dealership about the problem. Without a lawyer, there probably won’t be any response from them. However, some manufacturers are willing to negotiate and settle quickly if there’s a lawyer involved.
In your demand letter, make sure you clearly outline the issues and all of the repair attempts. You should also tell the automaker what you want from the case, whether it’s a Lemon law buyback or a replacement vehicle.
When it comes time to file a Lemon law claim, it’s best to have an attorney working for you. It’s important to know your rights and fully understand the state’s Lemon laws. You don’t want to file a claim if the vehicle isn’t eligible.
Present the evidence that you’ve gathered with your filing. Arbitration may be offered, which helps you avoid court. Otherwise, the case may need to be escalated further.
Every case is different and the manufacturers all tend to respond uniquely depending on the situation. Here are the most common outcomes for lemon law claims in California.
Lease termination: You may be allowed to return the vehicle and end your lease without penalties.
Vehicle replacement: A comparable car may be offered in exchange for the defective one. Your existing lease terms could be applied to the replacement vehicle.
Refund/reimbursement: You may be given compensation for the payments and fees you’ve already spent. You could then return your vehicle and lease something else.
Legal action: If the manufacturer doesn’t agree to the case, you may need to file with the local court.
If you had purchased the vehicle, there would also be the option for a cash-and-keep settlement. With this option, you would keep the vehicle and receive a payout for the defects. There are some downsides to this option, so it’s always best to speak with an attorney before signing anything.
While you can’t return a leased car for every reason, there are some exceptions to the rule. If the car is defective, you may be able to take legal action and get the lease refunded.
The Lemon Pros are ready to fight for your rights. We are regularly hailed as the best Lemon law attorney in the area, and we work on a contingency basis, so you pay nothing upfront. Contact us for your free case evaluation.
Phone: (855) 725-2446
Email: [email protected]
We have an excellent success record in representing consumers just like you! We are award winning attorneys, but that has not gotten to our heads. We are attorneys who care and give personalized attention to each and every client, our attorneys directly handle your claim.
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