How to Break a Car Lease
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Breaking a car lease is not always an easy or inexpensive endeavor, but it can be done. Even though leases are designed to be convenient for the lessee, they are anything but when it comes to getting out of one. However, there are a few techniques that can help you get out of your car lease.
Transfer Your Lease
About 75 to 80 percent of car leases will allow lease transfers. A lease transfer occurs when you are permitted to transfer your lease to another individual.
Perhaps you have changed professions and need a different type of vehicle, but you are stuck with six more months on your lease. A lease transfer company can hook you up with an individual who might have similar needs. For example, perhaps a man is doing contract work in your city for the next six months and only wants a lease for that time. You two would make a good match for a lease transfer.
There will be fees involved, but compared to formally breaking a lease, they will be minimal and you can negotiate with the new lessee on who pays for what.
Return a Leased Car
If you have the money and don’t want to deal with the hassle of transferring your lease, you can return a leased car. However, be prepared for hefty penalties. The leasing company will change you a termination fee, figure in depreciation, and only give you credit for the lowest amount the car could possibly sell for.
This could result in a huge gap between what you still owe on the lease and what you will have to pay to get out of it. It is best to find out the costs first before taking this route.
Trade in a Leased Car
While you can sell a leased car yourself, sometimes trading it in is the better option. The dealership from which you are buying your new car from will take care of the title transfers, payoffs, taxes, and other documentation and requirements.
Even though you will get the trade-in value instead of the retail value, unless the difference is quite considerable, it is often better to take advantage of the time saved. The main thing to consider when deciding to trade in a leased car is the payoff amount.
Make sure to get this information directly from the company you leased the car from and not the dealership. This is to ensure you get the credit you are entitled to.
Negotiate Terms with the Leasing Company
Don’t be afraid to negotiate with the leasing company. Maybe you are experiencing financial hardship right now. Perhaps you just need a little time to get things in order so you can resume your payments.
Leasing companies are often willing to work with you, especially if it means they get to keep you as a customer, you are in good standing, and you have good credit. Sometimes they can defer payments for a few months or lower your monthly lease payment.
So, while breaking a car lease is not the easiest thing to do, it can be done. Make sure to explore your options to find the right one for your needs and your specific situation. Reach out to an expert for advice if you need to, so you can take the right steps that work for you.