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Can I Return a Leased Car if it Has Problems?
Published 10/13/25
Estimated Read Time: 4 minutes
TL;DR: If your leased car starts having problems early, you may have options. Depending on your state’s lemon laws and the terms of your lease, you could either get the issue fixed or even return the car. But the clock is ticking—reporting issues early is crucial.
Most lease contracts don’t allow you to simply return your car because it has problems. When you sign a lease, you agree to keep and maintain the vehicle for the full term.
Returning it early—or trying to hand it back because of issues—usually leads to hefty fees and remaining balance payments.
That said, your next step depends on the kind of problem your car is having. Can you return it, or are you stuck with the repair bills?
Let’s dive into your options.
Know Your Lease Terms: Reading the Fine Print
Before we get into the legal stuff, let’s remember: Your lease agreement is essentially your contract with the dealer. Most leases require that you return the car in good condition—that includes fixing major mechanical or body issues.
If your leased car has some serious problems, you could be on the hook for additional charges when it’s time to return it.
1. Warranty Problems (Covered by the Manufacturer)
If the problem with your leased car is due to a manufacturer defect, it’s most likely covered under the factory warranty.
Nearly all leased vehicles are still under warranty for the full term, which means repairs for covered issues should cost you nothing out of pocket.
Here’s what to do:
- Schedule service with an authorized dealership.
- Make sure the issue and repair are documented.
- Keep all service receipts in case you need proof later.
If the car is drivable and fixable under warranty, returning it isn’t necessary—or even possible.
2. Wear and Tear or Damage Problems
Not all problems are mechanical. Sometimes it’s body damage, worn tires, or interior wear that’s got you worried.
Unfortunately, returning a leased car because of wear and tear or damage doesn’t get you off the hook. When you end your lease, the dealer will inspect the car and charge you for any damage beyond “normal wear and tear.”
So if you’re thinking, “Can I return my leased car early because it has damage?”—you technically can, but you’ll still owe:
- Remaining lease payments
- Early termination fees
- Repair or depreciation costs
In other words, returning your leased car early just adds more expenses on top of your existing problems.
3. Serious or Repeated Problems (Lemon Law Situations)
If your leased car has a serious, recurring issue that multiple repair attempts haven’t fixed, it might qualify as a “lemon.”
State lemon laws protect consumers when vehicles can’t be repaired after a reasonable number of attempts. You’ll need to:
- Check your state’s lemon law requirements
- Document every repair visit
- Contact your leasing company or state consumer protection agency
If approved, you might be eligible for a replacement vehicle or refund. But be aware—lemon law cases can take time and vary by state.
Watch Out for These Common Issues
No matter how prepared you are, a lemon can find its way into your life unexpectedly. However, there are certain things you can watch out for.
Let's say you lease a sedan for your daily commute, only to discover unsettling noises emanating from the engine. Despite getting your oil changed, the issue persists, disrupting your routine and leaving you questioning the reliability of your leased vehicle.
If your leased car has mechanical issues, such as engine or transmission problems, it's essential to address them as soon as possible. Most states’ lemon laws allow 24 months or less to report problems.
Sure, you can leave it be. But sooner or later you’ll need to get the issue repaired. Leaving these issues unresolved can result in you covering the charges at the end of your lease term instead of your manufacturer.
Lemon Laws & Leasing
Fortunately, there’s a chance that your car’s problems are covered by federal or state-specific lemon laws. These laws protect consumers stuck with substantial defects or mechanical issues on a new vehicle, typically within the first 1-2 years of ownership.
Lemon Law for Leased Cars
Lemon laws are designed to protect consumers who have purchased defective vehicles. “Lemon” is a term used to describe a car with serious mechanical issues upon purchase.
Why a “lemon?” At least since 1909, this slang term referred to something that is substandard, even a “booby prize,” possibly because of the sour taste it leaves in your mouth, like the fruit.
Today, state lemon laws apply to defects impacting a car’s use, safety, and/or market value. When a new (leased) car is under warranty, these laws protect owners by requiring defects to be repaired by the car manufacturer. And if the manufacturer can't resolve the issue, they must replace the car or give you a refund.
Every state can have different specifications about what is protected for used cars. In some cases, state lemon laws may restrict which types of vehicles are covered, how old they can be, and the specific terms of a warranty.
Example: In Idaho, if your new and/or leased vehicle experiences issues in safety, ineffectiveness, or devaluation within 2 years or 24,000 miles, the dealer must repair the defect within “a reasonable number of attempts.” Otherwise, the driver is entitled to a replacement vehicle or a cash settlement. This covers cars, trucks, and vans.
The Magnuson-Moss Warranty Act
Also known as the "Mag-Moss" Act, this is a federal ruling.
Where state laws differ on the finer details of individual lemon laws, this act covers a wide variety of vehicles, including ATVs, motorhomes, and boats. Mag-Moss also covers used cars that came with a written warranty, whereas many state laws only apply to new car protections.
What to Do if You Get a Lemon
So, you’ve got a lemon on your hands. What now? Well, you’ve got two basic options:
- Contact the Dealer or Manufacturer: If your car’s showing issues, don’t wait around—contact them immediately. It’s best to have your warranty info on hand, and make sure you document every problem you’ve experienced since getting the car.
- Handle It Yourself (Cautiously): If you decide to take the repairs into your own hands, remember that you may get penalized when returning the car if the repairs aren’t up to par with the lease agreement’s standards.
Pro tip: If you’re feeling uncertain, it might be worth getting a consumer protection agency or legal expert involved. It’s better to be safe than sorry!
In short, returning a leased car with problems is possible. But addressing any issues as soon as you notice them is essential.
What If My Car is Past the Lemon Law Term?
If you waited too long and are worried you might be stuck returning a lemon (and possibly even held responsible for the issue), you may be able to avoid penalties and keep your car with a lease buyout.
What Happens If You Try to Return Your Leased Car Early?
You can technically return your leased car early, but it’s rarely worth it. Most lease agreements include early termination clauses that make it expensive to do so.
If you return your leased car because it has problems, you could owe:
- All remaining lease payments
- Early return penalties
- Any excess wear or repair fees
Essentially, you’d pay thousands just to end up without a car. Not ideal.
A Smarter Option: Buy Out Your Lease
If you’re frustrated with your leased car—but still like it overall—there’s another path that can save you money and headaches: buying out your lease.
A lease buyout means purchasing your leased vehicle for the payoff amount listed in your contract (called the residual value). Once you buy it, the car is yours—no mileage limits, no return inspections, and no more dealing with the leasing company.
Here’s why this can make sense even if your car has some problems:
- You already know your car. You’ve driven it, maintained it, and know its full history. That’s more than you can say for a random used car.
- You can fix issues on your own terms. Once it’s yours, you can choose your repair shop, use aftermarket parts, or fix problems gradually—without worrying about lease inspection penalties.
- You avoid surprise fees. Buying out your lease skips the end-of-lease inspection and any wear-and-tear charges.
If your car’s issues are minor or manageable, buying it out could be the most practical, cost-effective move you make.
When You Shouldn’t Buy Out a Leased Car
If your leased car has major mechanical problems or repair costs that outweigh the vehicle’s value, buying it out probably isn’t worth it. In that case, it’s smarter to return the car at the end of the lease term and explore other vehicles that will give you the reliable ride you need.
The Bottom Line
So—can you return a leased car if it has problems?
Usually, no. But you can take control of your situation.
Instead of paying fees to walk away from a car you know, you could buy it out and make it truly yours. With the right lease buyout loan, you might even end up with lower monthly payments and no more lease restrictions.
At Lease End, we help drivers like you navigate the buyout process with confidence. From handling the payoff paperwork to helping you secure a competitive loan, we make it simple to keep the car you already know and trust.
If you're ready to chat through your options with a dedicated financial advisor, give us a call at 888-307-5197 to get in touch with one of our lease-end experts. Or, enter your license plate number or VIN in the form below to start the process online.
Start your lease buyout today. Because sometimes, the best solution to car problems…is ownership.
About the author
Rebecca Graham
With over a decade of professional writing experience, Rebecca transforms complex concepts and data into clear, engaging content. When she's not honing Lease End's organic growth strategy, she's fanning the flames of her Wicked obsession, crafting custom candles, or walking Utah’s mountain trails. Connect with Rebecca on LinkedIn.
Lease End's mission is to empower auto lease owners with the technology to easily exit their lease. If you'd like to learn more about the lease-end options available to you, please don't hesitate to contact us. Our expert advisors are always prepared to answer your questions and are committed to finding the right plan for your individual needs.
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