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Refinancing a Leased Car vs a Purchased Car

If you’re looking to refinance your purchased vehicle, you are in luck. There are several situations you can take advantage of to decrease your monthly auto bill. For owners of leased cars, unfortunately, you’re out of luck as the leasing terms are set in stone

But there are still workarounds to help alleviate the financial burden of having a bad loan on a leased car. Check out our refinancing recommendations to help reduce your auto loans:

Refinancing Loans for a Leased Car

Once again, you cannot refinance a loan on a leased car. Your only option to even begin refinancing a loan on said car is to end the leasing agreement. This comes at a cost, including:

Early Termination Fee:

Upon terminating your loan prematurely, you will incur a penalty fee. This cost will differ depending on the lender, but it’s likely to hurt nonetheless. This is the first step to refinancing your loan, however, so the benefits may outweigh the inconvenience in the long run.

Depreciation Fee:

Depreciation of a car is the difference of the purchase price and the residual value of the vehicle once the lease ends divided by the number of months you’re leasing the car. For example, if you purchase a car for $20,000 and the residual value once the lease ends is $12,000, then the difference ($8,000) would be divided by the number of months of your lease.

If you end a lease early, the depreciation fee will kick in, resulting in potentially hundreds of dollars owed by the lessee. So before taking any measures to reduce your auto loan, calculate the cost to end your lease early and estimate if it’s worth it.

Tranferring a Lease:

If your leasing company allows it, the best option to rid yourself of a lease is to transfer it to another person you trust to care and pay for the car. This will free you up to research other vehicle options you will be more comfortable paying yourself. However, you’ll still be fully responsible for the lease, including the monthly payments the new owner may miss.

As you can see, refinancing loans for a leased car can only be achieved by ridding yourself of the lease altogether. What might give you less of a headache is simply buying the car and refinancing the loan. That brings me to:

Refinancing Loans for a Purchased Car

Early Termination Fee:

If you purchase the car you’re already leasing, you’ll still owe the aforementioned early termination fee. It’s recommended you stick with the lease payments as long as possible to avoid a bigger fee for ending your lease early.

Loans Depend on Credit:

The higher your credit score, the better deal you’ll get on refinancing your vehicle. Take advantage of free credit check tools to know your score before you take the leap into refinancing. If your score is too low, an auto loan assistant can refer you to fix your credit with certain financial steps, including: keeping your credit card balance low, paying off debt faster, and reviewing your credit history to catch any errors that may improve your score.


For a vehicle you already purchased, refinancing you loan should be a cakewalk. The process to refinance is free. All you need is the right auto loan assistant to point you in the direction you need to reduce your loan.


>>Click here to find our your refinancing options!<<

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