Getting out from a car lease contract may be very complicated. It is much like a divorce. However, some options can help you avoid huge termination fees and penalties.
Leasing a car is a great financial instrument that can turn into a nightmare if you want to end it early. Let’s see, what is your choice if that’s the case.
Options for Breaking a Car Lease
Return the vehicle. It is the most expensive option because most car lease contracts include termination fees and penalties. It is also possible that you will still be financially responsible for all remaining payments which make these option nearly unacceptable.
Roll the payments into a new lease from the same lessor. You will have to pay for an old car that is no longer at your service, as well as the new one, but this option can help you avoid losses in the form of termination fees and penalties.
Request a voluntary repossession. It looks like an easy way out; however, you will dreadfully damage your credit score, so don’t do it unless you’re ready to sink your credit ambitions to oblivion.
Find a person for a lease transfer. This option can make everyone happy: you will get out from a lease contract without huge losses, the ‘lease buyer’ will get a lease with shorter terms, and the lessor will get a new customer. Unfortunately, there may be some restrictions and pitfalls.
Why Would Someone Want Your Car Lease Instead of a New One?
There are plenty of reasons. First of all, someone might need a car for a shorter term that is offered by the original lessor. Secondly, it is helpful for those who want to avoid hefty down payments. Additionally, some people would like to buy a car for a preset price at the end of the lease and are willing to try the particular car beforehand. Everyone has its own motives.
Restrictions and Pitfalls of Lease Transfers
Some leasing companies don’t permit lease transfers at all, so it might be a good idea to check the availability of this option before signing any contracts. Another problem might be if your lessor requires the so-called post-transfer liability which means you will be responsible for payments in case your ‘lease buyer’ defaults. Fortunately, the leasing market is moving away from this unfair condition. Companies behind Acura and Mercedes-Benz brands, for instance, realized that the lease transfer can give them two satisfied customers instead of one that will never use their service again.
In order to use the lease transfer option, your buyer must have an appropriate credit score. There are online services like LeaseTrader, Swapalease, and others that can help you find a ‘lease buyer’ and make a deal for a small fee.