Turning in a Defective Car to End a Lease

Leasing a car involves a legal contract between you and the leasing company. Sometimes issues come up that can throw a wrench into your lease, however. If your car is defective, you may have options that will let you return the car and end your lease without the threat of negative repercussions.

Individual states have lemon laws that could apply to your auto lease. A lemon law may provide a legal rationale for returning the defective car and ending your lease, as long as your circumstances match the parameters of the law. Typically, lemon laws require servicing your car for the same problem a specific number of times within a designated time period. In addition, your car must be under the manufacturer's warranty and you must return the car within one year of starting your lease.

You will need to document the service your car has received in order to prove it is defective. For this reason, keep every receipt you receive for auto repairs. You will need them to prove that the car had the number of repairs required by your state’s lemon law. This can be especially important if any of the repairs occurred in out-of-town garages, away from your main mechanic. Also keep a record of every conversation and written communication you have with the lease company and service providers.

The exact procedure for making a lemon law claim varies a bit from state to state. To use your state’s lemon law, follow the process of reporting and allowing time for repairs. After the stated number of repairs occurs and the problem still exists, notify the lease company of the continued problem in writing. Explain the need for repair and your possible lemon law claim in your letter. Send this notification by certified mail with return receipt requested. The lease company typically has one more chance to fix the vehicle. If this repair fails, you can utilize the lemon law to return the car and get a refund.

After the final repair attempt, the lease company will either accept or deny your lemon law claim. If the lease company accepts it, you can return the car for a refund of your leasing costs, repair costs and any car rental charges you incurred relating to issues with the leased car. The lease company may choose to reject your claim. In this case, you may need to hire an attorney to sue the lease company for a refund.