What to Do If You Can’t Afford Your Car Lease Payments Anymore

Recognizing that you can’t afford your car lease payments is only the first step. You must determine:

• If you’re upside down on the lease (you owe more than the car is worth)
• What early termination stipulations exist within the lease 
• What sacrifices you’re willing to make concerning your credit report and any fees

Once you gather this information, you can make a more informed decision about how to move forward. Defaulting on a loan can stick with you for up to seven years, but a proactive approach can help minimize the damage. 

1. Tap into savings 

If you don’t have any savings to work with, skip to the next section. However, if you’ve got at least a few lease payments stashed away, you can use that money to give you more time. You can also potentially save your credit score. 

It’s much easier to come up with a solution if the pressure of a time crunch is off. If your savings can bump you to a point where you owe less on the car than it’s worth, you can also reassess your situation to find a more appropriate solution. 

2. Ask friends and family for help

Relying on your support system to help you in times of need is what family and friends are for. If you’re struggling with your monthly lease payments, consider reaching out. Your next-of-kin may be able to float you along with a temporary loan (with or without interest). 

Getting help to cover your payments can do a lot for your credit score. You can avoid defaulting on the loan or even voluntarily repossessing your car and taking the credit hit. It may also be easier to ask your family for assistance than discuss your situation with your lessor. 

3. Contact your leasing agent

Once you’ve exhausted your personal resources, it’s time to speak to your leasing agent. Telling them you can’t afford your car lease payments can feel embarrassing, but being up-front and honest is better. Explain your situation and ask your leasing agent what programs or opportunities are in place that may offer assistance. 

The key to speaking to your lessor is timeliness. As soon as you know you can’t afford your lease payments and have fruitlessly pursued other options to remediate the situation, make the call. Some programs may require an application or approval process, so calling on the day your payment is due is hardly wise. 

Having a few numbers written down before you is also a good idea. What monthly payment can you afford if the leasing agent temporarily agrees to a lower amount? When do you expect to make full payments again? Understanding your situation and what you can negotiate with the leasing agent can help ease tension within the conversation. 

Note that if you get a forbearance or temporary pause in payments, your mileage caps do not extend. You’re simply adding time to your lease by pushing payments out a month or two. 

4. Consider a lease assumption 

Similar to subletting a rental, lease assumptions allow an individual to take on the monthly payments of another. Websites like LeaseTrader and SwapALease can help connect you with someone to assume your lease. While lease assumptions are more common these days, the legalities of such an agreement can be tricky. 

For instance, some lease contracts outline the responsibilities of all individuals involved if someone else assumes the lease. Most often, the individual who accepts the lease has to qualify before any agreements are made, just like you did when you first obtained the lease. You cannot transfer the lease to that individual if they cannot meet those requirements. 

You may also be defined as a cosigner on the lease, even if you find someone to take it on. Cosigners can be held responsible for late payments should the person who assumed the lease default. Even the transfer fees associated with such an arrangement may make a lease assumption too expensive for your situation. 

5. Trade in or sell your car

While you can’t refinance your lease, you can trade in a leased vehicle. If your new car loan comes with a lower monthly payment than your lease payment, you’re in the clear. It might mean you have to settle for a car with fewer gadgets and gizmos, but at least your damaged credit report won’t prohibit you from getting another auto loan. 

You can also sell your leased vehicle to websites like Carvana and Vroom. These sites offer a dealer buyout price to pay off your lease and purchase the car from the dealer. While you’re left without a vehicle, you may be able to come out of it all with cash, depending on where your loan sits. 

Finally, you can sell your leased car through a private party. It’s critical to disclose that you’re selling a leased vehicle so buyers understand their ownership rights. Once you sell your car and pay off the lease with the proceeds, you can move into a car subscription service like FINN. 

When it comes to leasing, buying, and subscribing, FINN makes it easy to pick which vehicle you want, what color and features you need, and where you want your car delivered. The monthly payment you see reflected when in the checkout process includes the one monthly payment you’ll make — no hidden fees. This insurance, maintenance, registration, and roadside assistance. You're in the clear as long as you can pay for gas and your monthly subscription payment. 

6. Combine your payments with a new lease

Adding another lease to one you already can’t afford can seem foolish. However, you can potentially afford both leases with the right strategy. 

You can lease a car with bad credit, which could reflect your situation when you first obtained your existing lease. However, you may have improved your credit score, unlocking better lease terms. If you trade in your current lease for a lower-value car, your improved credit score could get you a lower monthly payment. 

You can also find potential savings in leasing a car with lower maintenance costs. If your newly leased vehicle costs less to insure, maintain, and fuel, those savings can help you afford your monthly payments, even if you’re paying off both leases. 

Undertaking this gamble can come with high stakes, some too high for certain lessees. However, if you want to keep your credit score intact and still have a car to drive around, working the numbers with a new lease could save you from defaulting.  

7. Obtain a personal loan 

Depending on your credit situation, qualifying for a personal loan may help you afford your monthly lease payments. But if you’re robbing Peter to pay Paul, a personal loan may put you further into debt. Weigh your options carefully, as debt can quickly snowball and become overwhelming if left unchecked. 

8. Voluntarily repossess your car

You can voluntarily repossess your car by contacting the leasing agent as a last resort. Discuss your situation with the lender (if you haven’t already to try to lower or defer your payments) and set up a time to pick up the car. Make sure you remove any personal belongings before relinquishing possession of your leased vehicle. 

When someone voluntarily repossesses their vehicle, the leasing agent often sells the car at auction. Any proceeds go toward the lease agreement. You are responsible for the deficiency, which is the remaining balance on the lease. Some lessors offer a payment plan to cover the deficiency, while others expect payment in full. 

If you can cover a portion of the lease when you repossess the car, the leasing agent may be more willing to work with you. However, even voluntary repossessions still affect your credit score. Though more favorable than defaulting, a voluntary repossession can still affect your ability to obtain a car loan in the future. 

Per the Federal Trade Commission (FTC), a lender can repossess your car once you default. While they cannot “breach the peace” to retrieve their asset, these lenders have certain rights to sue you for the deficiency and any other fees associated with repossessing the vehicle. 

You can lower your car lease payment by speaking with your leasing agent. You can also choose longer terms to pay less each month when you originate the lease. You’ll pay more for the lease than if you agreed to shorter terms, but your monthly payments may be more manageable.