Can I Sell My Leased Car?

by Tim O'Sullivan

Choosing to lease, rather than buy, can help get you into a nicer vehicle for a lower price. They represent an opportunity to save on sales tax, avoid contacting multiple lenders, and drive home in a car with a warranty. But what happens when that vehicle, or the lease agreement, isn’t right for you anymore? Maybe you need (or want) a different type of vehicle. You could be moving from a Ford or a Mazda or a Toyota to an Acura or a BMW or a Mercedes-Benz. Maybe your personal finance situation has changed, the monthly payments no longer make sense for you. Maybe it’s time to pass the car on to a family member.

If you're looking to move on from a vehicle before its lease term is up, you don't have to break the lease (and pay the subsequent fees) to do it. You can return the leased vehicle to a dealership, sell it privately, or transfer the lease to a third party.

Return It to the Dealership

Selling a leased car to a dealership is the best option for many people. It will help them get out of their old vehicle and into their next car with the least hassle.

You can sell your vehicle back to the dealership you leased it from, or you can sell it to another dealership. In order to get the best trade-in offer, find a dealership that sells the brand of vehicle you're trying to sell. For instance, go to a Honda dealership to sell a Honda.

First, make sure you know the vehicle's current market value. You can look this up using CarGurus Instant Market Value tool to ensure you get the most money for your trade-in. You should also look through your lease contract to find the vehicle's residual value or buyout amount. This is the leasing company's estimate of what the vehicle will be worth at the end of your lease, accounting for normal wear and tear (this is also the sale price you would pay to buy the car at the end of the lease).

The dealer will charge you a disposition fee for taking the car back. If that fee, plus the residual value of your vehicle, is more than the trade-in offer, you can roll the remaining payoff amount into a new lease. Many dealers will waive the disposition fee if you lease a new car from them.

While it's rare, you can actually make money on the deal if you have positive equity: if your vehicle is worth more than the buyout price, you can pocket that cash or use it as a down payment for your next vehicle. Make sure you total the residual value and disposition fee if you're considering this option.

Sell It Privately

Selling your leased car privately may be a better option, because you stand to make more from a private sale used car sale than a dealer trade-in—about $1,200 more, on average. But this approach comes with a caveat: You will need to first buy the car from the leasing company. This means you'll need to have enough cash on hand to cover the residual value and the remaining payments.

Interestingly, in times when car prices and trade-in values are high, buying out a lease with the intention to sell the vehicle can make financial sense. Lease agreements include an option to purchase at the end of the lease term, and the anticipated residual value of many vehicles pre-pandemic was less than the realized value of the cars in the post-pandemic automotive market.

Once you buy the car, the leasing company will send you the title, and then you'll be free to sell the car. Selling a car to a private party (this is called a third-party buyout) can be a headache, but selling it through CarGurus is easy. If you choose to do so, you can sell a vehicle 100% online. We’ll provide an instant cash offer sourced from our network of thousands of dealerships. Once you’ve accepted the offer, you can schedule a time to have the vehicle picked up, and then you’ll get paid.

You can also sell your car to a private party. Since you'll have to come up with the cash to buy the car from the leasing company, selling a leased car privately is best for those with a vehicle that's worth more than residual value plus any early termination fees that may be written into your lease contract. Be sure to check your lease contract for the buyout fees and residual value, and use CarGurus Instant Market Value calculator to help determine pricing. You need to know your car values to make sure the private-sale math works in your favor.

Transfer Your Lease to Another Party

You may have to pay a fee to do it, but transferring the lease to another person can be the easiest way to get out of a car lease before it is up. A new owner simply takes over the lease payments, and you hand over the keys.

This option is especially easy if you have a family member or friend who is in the market for a leased car. Even if you don't know anyone who wants to take over a lease, you can use services like or to find someone who is looking to pick up a leased vehicle.

Before you take this path, check your contract to make sure your automaker allows lease transfers. Hyundai and Kia, for example, won't accept them. You'll also want to check for any liability concerns. Some manufacturers, like Volkswagen and Audi, allow transfers but hold the original lessee responsible if the new lesee does not make payments or wrecks the vehicle.

The Bottom Line

A lease doesn't have to chain you to a vehicle—or its payments—for the life of the contract. You'll need to get some facts straight (the residual value, lease buyout fees, transfer options and Instant Market Value) before selling your leased car, but that may be the best option when a lease no longer makes sense for you.

Related Topics

How To Sell a Car You Haven't Paid Off Yet
The Truth About Trade-Ins
Everything You Need to Know About Leasing

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