How to escape a costly car lease

Golden dollar sign

Ditching an expensive car or truck lease is a great way to cut costs and save money.

Until recently, your only option was to return the car to your leasing company -- if it would let you -- and pay a big penalty.

But now it's possible to transfer your lease to another owner using a Web site such as LeaseTrader.com or Swapalease.com.

Just sign up, create an ad that includes photos of your car and the terms of your lease, and wait for consumers looking for a car like yours to respond.

Posting a car on one of these sites usually costs $50 to $150. If someone agrees to buy your lease, there may be an additional closing fee -- $95 for Swapalease and $250 for LeaseTrader, though LeaseTrader offers a $100 rebate.

Under the Swapalease system, the seller and buyer do most of the legwork in terms of getting the lease transferred. LeaseTrader facilitates the exchange of paperwork and other tasks, resulting in the higher fee.

The major finance companies initially were reluctant to allow lease trading. But most are now on board and taking advantage of the system by charging transfer fees that can range from a few hundred dollars to $700 or more.

Fortunately, it's the buyer, not the seller, who usually has to pay that.

If a lease transfer sounds like something that could help you, here's what to do.

Start by checking the list of leasing company fees and policies posted on these pages at Swapalease.com and LeaseTrader.com.

You'll need the answers to these three questions:

Danger! Danger!: Don't transfer your lease if it contains such a clause.

It means the lender will continue to hold you liable for the payments and the condition of the car if the new lessee defaults. You could even be on the hook for the purchase price if your buyer fails to turn the car in when the contract expires.

Most major leasing companies don't impose contingent liability on their customers; others have made it a standard part of any transfer. But policies change, so check with your leasing company before deciding against a lease transfer. You also can make a written request for that liability to be dropped, and sometimes the lender will agree to do so.

If it refuses, the only way to protect yourself is through an insurance policy such as Swapalease's "Lease Transfer Peace of Mind" plan. But there's a long list of potential charges those policies don't cover, they're very new, we don't know how well they work, and the premiums add to your cost.

So, in our opinion, contingent liability is a deal breaker. If you can't avoid it, don't do it.

If you're still good to go, the next step is checking out the leases being offered on comparable models.

If your payments are among the most expensive, you've used most of your miles or are especially eager to unload your lease, you may need to offer an incentive to attract a buyer.

You can give the buyer cash to offset a portion of the future payments or agree to pay the lender's fee or the cost of transporting the car to its new owner.

Now you're ready to total up all the costs and decide whether transferring your lease makes financial sense.

If it does, here's everything you'll need to post your car or truck on one of the lease trading sites: