Can I Return a Leased Car if it Has Problems?

Read time: 4 minutes

Returning a leased car at the end of a lease is enough of a hassle on its own.  

But what happens if your leased vehicle has problems early on? Can you return it, or are you stuck dealing with the repairs yourself?  

Let’s explore your options. 

First and foremost, it's crucial to understand the terms of your individual lease agreement. Most leases require you to return the vehicle in good condition, with major mechanical or body issues resolved.  

If your leased car has significant problems beyond normal wear and tear, you may face additional charges. If you notice any issues early on, it’s best to address them ASAP. 

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 regulations 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.  

Lemon laws are rooted in consumer protection against defective products. 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. 

Read More: Kelley Blue Book’s Lemon Laws by State  

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. 

Mechanical Problems to Watch Out For 

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. 

What to Do if You Get a Lemon

Coming home with a lemon can be a real bummer. But thankfully, it’s not the end of the world (though it may feel like it).  

You have two basic choices: contact the dealer or manufacturer ASAP about the issues that need to be fixed or repair the issues yourself at some point before the lease ends.  

Arm yourself with information as you reach out to communicate the issue:

1. Review your warranty for the specific protections for which you are eligible and document the issues — in detail — that you’ve had since obtaining the car.
2. If you decide to handle the issues yourself, keep in mind that you may be penalized and charged for these repairs when you return the vehicle if they weren’t compliant with your lease maintenance restrictions.
3. You may also want to preemptively reach out to a consumer protection agency or legal expert if you fear that your dealer won’t honor your case.  

In short, returning a leased car with problems is possible. But it's essential to address any issues as soon as you notice them. 

Read More: Can I Repair a Leased Vehicle by Myself?  

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. Lease End’s expert advisors specialize in lease buyouts and can help you navigate the transaction, even if your leased car has problems. 

Plus, you’ll avoid the hassle of dealing with the leasing company and the inconvenience of shopping for a new car — especially if you love the one you’ve got.  

Or, enter your license plate or VIN to start the process online.