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In This Article: We can't control everything in life. If you are driving a leased vehicle, you may have unexpected circumstances that prompt you to leave your lease early, and not finish the lease agreement. If you need to get out of a car lease, you do have a few options, but it is something you want to consider carefully. |
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Auto Leasing: How To Get Out Of A Car Lease
By: Amy|
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When you lease a vehicle, one of the benefits is the low monthly payments. Part of the trade-off is the agreement to keep the car for a specified period of time. Because of depreciation, it is not in the leasing company's best interest for you to return your early.
Don't expect to walk into the leasing company, drop off the keys, and be done with it. Usually, the leasing company will require you to pay all of the remaining lease payments that are due on your contract, plus an early termination fee.
You'll still be paying for the privilege of driving the car, even if you return the vehicle. Most of the fees and penalties for early termination are found in your lease agreement. Its a good idea to get clear on those terms before you even take out the lease, and if you are considering breaking your lease, you will want to review the terms of the contract first.
One thing you don't want to do is just return the car and refuse to pay. Your credit report will be negatively impacted, and the whole transaction will be listed as a repossession on your credit. In many cases, there are more attractive and viable options then returning the car and paying all of those extra fees, or taking a hit on your credit.
One option is to sell the vehicle yourself, and then use that money for the buy-off amount of the lease. You will want to do some research, and see what you could reasonably get for the if you sold it to a third party.
If its a similar amount to the buy-off amount, you could sell it, and then pay off the lease. This way, you will protect your credit, although you may still have to put in some of your own money, if there is a difference between what you sold the car for, and what you still owe.
Another option is to transfer your lease to a third party. This is called a lease assumption, and another individual takes over your lease, they handle the remaining payments, and return the vehicle at the end of the lease. This is a great option because you won't have any penalties and once the lease is transferred, no responsibility toward the leasing company.
However, there is a variety of paperwork involved, and everything needs to be handled correctly for the lease assumption to be valid.
Your leasing company will need to be involved, and needs to approve the transaction. The best way to find a third party, and have the transaction done properly, is to use one of the specialized companies that help lease buyers find lease sellers. These companies have websites where you can advertise your vehicle and lease terms to interested buyers, and they will process the paperwork and guide you through the transfer process. Of course, there will be a fee involved for the service, but it will be usually be less than what you would pay in lease termination penalties.
Terminating an lease can be more complicated and costly than starting one. Its important that you review the lease contract carefully, and take a look at your options before you make a decision on how to get out of your car lease. In many cases, a lease transfer option may be the best deal, but only if your leasing company allows a lease assumption.
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