If you lease your car, you can’t sell it the way you’d sell a car you own outright. The leasing company holds the title, and it sets the payoff and buyout steps. So before you advertise the car, talk to a buyer or visit a dealership, call your leasing company.

This guide covers what the DMV publishes about leased vehicles, the questions worth asking, and how the rest of a California sale fits around the leasing company’s answers.

Can I sell my leased car?

Only with your leasing company involved, and on its terms. The DMV’s consumer pages about selling a car, transferring a title and smog checks don’t cover selling a leased car, and they don’t say whether a leasing company has to allow a sale to someone else. Your lease agreement and your leasing company are where those answers come from.

What the DMV does publish is in its registration procedures manual, which the DMV designed for dealers, registration services, financial institutions and others in the vehicle industry, rather than for consumers. It explains who owns a leased car and who has to sign when it changes hands.

Who owns a leased car in California?

The DMV’s procedures say the lessor, meaning the leasing company, is the registered owner. On the registration, the lessor’s name is followed by LSR, and yours, as the lessee, by LSE (DMV manual: leased vehicles). Your registration card shows exactly who is listed.

The same manual says the lessee’s signature alone won’t be accepted to release ownership. Every leased vehicle transfer requires the lessor’s release on Line 1 of the California Certificate of Title (DMV manual: leased vehicle transfers).

That’s why the leasing company decides the route. Ask which routes it allows: for example, whether you must buy the car out yourself first, or whether a private buyer or a dealership can pay the leasing company directly.

Questions to ask your leasing company

  • Do you allow a sale to a private buyer or to a dealership, or only a buyout by me?
  • What is the payoff or buyout amount, and how long is that quote good for?
  • Are there any fees on top of that amount?
  • Who sends the payment, and where does it go?
  • How and when will you release the title on Line 1?
  • What paperwork do you need from me?

Get the answers in writing if you can, and keep them with your lease paperwork. Anyone who might buy the car will need to understand them, because they decide how the sale closes.

Buying out the lease, then selling

If your leasing company’s route is a buyout first, the car passes from the leasing company to you, and then from you to your buyer. Two points from the DMV’s registration manual are worth knowing. The manual is a procedures guide, not tax advice, so confirm both with the DMV for your situation.

Transfer fees and the 10-day use tax point

The manual says that when a lessee sells the vehicle to a third party, two transfer fees are due in addition to any other fees. On use tax it says: if the lessee sells the vehicle within 10 days, use tax is due only from the third party; if the lessee sells it after 10 days, use tax is due from both the lessee and the third party (DMV manual: leased vehicle transfers).

Smog

The DMV’s procedures say a smog certification may not be required when a vehicle is transferred between the lessor and the lessee, or to a person who has been the lessee’s operator for at least one year, unless a biennial smog certification is due (DMV manual: leased vehicle transfers). BAR’s reference guide lists a similar exception for a transfer between lessor and lessee when there’s no change in the lessee or operator (BAR reference guide).

Those exceptions cover a transfer between you and the leasing company, or to a person who has been the lessee’s operator for at least one year. For a sale to anyone else, read smog certificates when you sell a car in California.

After the sale, or if you hand the car back

If you bought the car out and then sold it, you’re the seller, and the seller must notify the DMV within 5 calendar days of the sale by filing a Notice of Transfer and Release of Liability (DMV NRL page). Our California selling checklist covers that step and the rest of the paperwork, from the title to the bill of sale.

If you return the car at the end of the lease instead, the DMV’s NRL form, REG 138, has room for that too: it includes a field for the lessee’s name and a “lease return” date, so a lessee can use it at lease return (REG 138).

Is it a lease or a loan?

If you financed the car rather than leasing it, your lender is a lienholder, and the steps are different. See selling a car you still owe money on in California.

If a dealership is the buyer you have in mind, tell us about your car and pick Lease as the title status. A CarLinks agent gets in touch and shares the car with dealerships we work with. If one is interested, your agent handles the price conversation and arranges a visit, and the dealership decides whether to buy once it has inspected the car.

Your leasing company still sets how the lease is paid off, so have its answers to the questions above ready. Sharing your car’s details doesn’t commit you to selling, so start on the Sell my car page whenever it suits you.

Sources

Checked October 2026.