What if you can't pay and the leased car gets taken back?

Yes. Even though the leasing company already owns the car, missing payments can let them take it back — and it usually only starts after you're a couple of months behind, not the day a payment is late. But it's a last resort for them too: taking a car back, storing it, and reselling it is expensive and slow, so they'd almost always rather work something out. That's why the single most important move is to call them the moment you know you'll be short, before it ever gets to that point.

Often, yes — and this is the part that surprises people. After they take the car back, the leasing company sells it, and if that sale plus your past-due payments doesn't cover what the lease was worth, they can bill you for the gap, plus towing and storage fees. So losing the car can still leave you with a balance. That's exactly why heading it off is worth so much: a hardship plan or handing the car back on your own terms almost always costs less.

It's one of the most damaging marks a credit report can carry, and it can stay there for about seven years, making the next car — or apartment, or loan — harder and more expensive to get. The missed payments leading up to it hurt too. Because the damage is so lasting, spending a stressful afternoon on the phone arranging a deferral or a lease transfer is almost always the better trade than letting it land on your record.

Act early and pick the cheapest exit. Call the leasing company before you miss a payment and ask about a hardship deferral or a lower plan. Look into transferring the lease to someone who takes over the payments. If you truly can't continue, handing the car back on your own terms is usually less damaging and less costly than waiting for them to come take it. Every one of these beats losing the car the hard way — and if you kept your cash instead of putting money down, that cushion is what buys you time to sort it out.