How to Terminate Your Car Lease EarlyHow to Terminate Your Car Lease Early
- November 29, 2019
- Car Leasing
- Posted by Ganish KVR
- Comments Off on How to Terminate Your Car Lease Early
Well, there are many people like you who want to dissolve their car lease as they want to buy another vehicle or unable to pay the monthly payment.
However, getting out of a car lease isn’t that easy. Any mistakes can hurt your credit and you might end up owing a big amount to the leasing company. Even worse, you might run into legal trouble if you are unable to pay what you owe on the lease.
A default on a car lease will make it challenging to get your next vehicle financed.
However, there are certain ways you can use to get out of your car lease. Some of them are given below.
Transfer Your Lease:
It might be the easiest way to get out of your lease as early as possible.
You can transfer it using a 3rd party lease trading services. Most leasing companies let you transfer the lease to another party, but be careful while doing this. This is because you will be still legally bound by the contract and liable if that person fails to make payment. Besides, you are asked to pay a transfer fee which can be anywhere between $50 and $500.
Depending on the amount of money you spent on the lease and mileage, you may have to offer an incentive that will reduce the monthly payment for the new lessee. This can be anywhere between $500 and $5,000.
Return the Car to the Dealer or Leasing Company:
Another simplest way to overcome your car lease!
But it comes with a trade-off—you are subject to the penalty provisions mentioned lease agreement. You will have to pay the early termination fee, as well as the remaining depreciation of the vehicle. The leasing company will sell the car through an auction to get the absolute minimum value of the vehicle. In this scenario, you have to pay the difference or the rest of the amount.
Approach Leasing Company for Help:
If you are running through the financial crisis, but you still feel that you can able to survive if provided a few months before you terminate your lease early it’s important to ask the leasing company for help. Ask them if they can provide you relief for a few months. They might agree to minimize your monthly payment or even put it on the hold for a while. However, you will have to make up the difference once you start making payments again. Take this risk if you think you can able to make payments without getting extra penalties.
Buy the Car. Then, Sell the Car:
Many car lease vendors let you buy the vehicle at any time during the lease. This is known as a buyout provision. However, the resale value of the vehicle should be equal or more than the buyout price. For example, a buyout price of a vehicle with a 5-year lease is $ 20,000. You can buy the car and then sell the car. However, the resale value of the car should be $20,000 or more. Prefer selling the car to a third party because you may not get a good resale value from a dealer who may provide you only the wholesale value.
So these are some ways to overcome your car lease. However, as you have read, all of them come with a certain trade-off. Therefore, choose your option wisely.