Are you looking forward to turning in your leased car without losing a small fortune? Luckily the auto leasing process is not so rigid now, and with online information and resources, you can find the right way to end your lease early by selling, swapping, or buying your car. Visit eAutoLease.com to learn about the options you have and how you can get out of your lease before time. With the correct information and careful, strategic planning, you can enjoy the perfect solution for your unique situation.
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Changes and events in life can have a significant impact on your financial situation. Returning a leased vehicle before the lease expires is an option but not a good one. You will still have to make the remaining payments, as well as substantial fees and penalties for early termination. If you want to break your lease agreement due to any reason, it is essential to understand how it can be done without paying too much penalty or going through unnecessary stress.
Before deciding on which option to use, review your lease contract and check out the following:
- Your monthly payment
- Number of months remaining in the lease
- Amount of additional lease-end fees
- Residual value of the car
Knowing about the lease-end fees and remaining monthly payments is a good estimate of what you would be paying to terminate your lease early and leave your leased car. You can also check with your leasing company how much you will have to pay in case of early lease termination and the price of buying out the lease altogether.
Read more: What Happens at the End of a Car Lease?
Swap the lease
Many lease contracts allow you to transfer the remainder of the lease period to another person who will take over the car and pay for the rest of the contract. You can find potential candidates by advertising the car yourself or posting on a lease-trading website.
You can also transfer the lease to a family member or friend who you can trust to take over the monthly payments. Make sure auto insurance still covers the vehicle, and it is clear who will pay for any excess wear and tear at the end of the lease. It is necessary to check your car manufacturer’s policy before moving forward with a lease swap.
Check the leasing contract
Swapping your lease also depends on your car manufacturer, and you must check your contract for this. Every automaker has its own financing company with slightly different leasing rules. Some don’t allow transfers, while others have rules about when you can transfer, such as not within the first year.
Some manufacturers hold the original leaseholder responsible if the new lessee stops making payments or damages the car.
Read more: Leasing vs. Buying a New Car
How to transfer a lease
For a little fee, you can post the terms of your vehicle’s lease on the leasing websites. The experts from these sites check out your paperwork and help in the smooth transfer of the lease. In some cases, you may have to put up some money to make the leasing offer more attractive to the buyer.
Despite everything, lease swapping can be the most cost-effective and simplest way to end your car lease early.
Buy your car and sell it
Most lease contracts allow you to buy the car at any time during the lease period for a predetermined amount, also known as the early buyout price, depending on your contract. The leasing company will evaluate the car’s price based on its residual value and your remaining payments.
You can purchase the car with ready cash or even take out a loan to cover that expense. Many auto financing lenders offer lease buyout loans. Some lend amounts greater than the book value of the car. Check with your leasing company for the car’s current buyout price to determine if that is above or below its market value. It is the fastest and easiest way to step out of a lease agreement.
Once you have bought out the lease contract, you have two options:
Sell the car to a dealership
You can take your car to a dealership and sell it there. If they like the car, they will make you an offer. The dealership can buy out your contract with the leasing company and send the cheque for whatever money is left over. There is no sales tax on this transaction. The dealership will only pay you the wholesale or trade-in price that will be less than if you sell to a private buyer.
Sell the car to a private party
You can sell your car to a private buyer. It can be a friend or a family member, or someone you find at an online auto marketplace. Remember, selling a leased vehicle to a private party means you may have to pay sales tax. Check with your local department of motor vehicles about rules in your state before moving forward.
Buy your car and keep it
If you like your leased car and want to enjoy driving it in the future as well, you can buy the car and keep it. It would help to end the lease contract early, and you would become the car owner. You can also use a lease buyout loan for this purpose. The only downside is that you will have to extend your financial commitment to lower your payments.
If your leasing company does not offer a lease buyout, many auto refinancing lenders do. Some will offer a loan that is more than the car is worth if your buyout price is higher.
Trade in your vehicle for another vehicle
There is a possibility that you may be able to roll your current lease into another one at the dealership. You may still be required to pay an early exit fee, but it will be included in the monthly payments of your new car contract. This option works best if you do not have a major cash crisis but want to drive a different vehicle now.
However, to trade in your vehicle for another vehicle, you must proceed with caution and check all the numbers in the contract so you know what you are signing. Knowing the figures and terms of the contract ensures you don’t end up making mistakes that would cost you dearly.
Some other options include:
- Lease pull-ahead – Some dealerships offer incentive programs that allow you to skip your last three payments if you lease another vehicle immediately. These deals are not available all the time or from all the manufacturers, but if you find one by chance, it is a great way to pull out of a lease early. It is also a good way to avoid paying a penalty for going over the mileage if you are reaching your limit early.
- A dealership buyout – Some dealerships also offer a buyout if you purchase another car from them, usually in the last year of your lease. Go through the contract carefully to ensure you are not being charged for a lease transfer. You must buy the lease or another car from the same manufacturer, but the final payments are forgiven, and you can get a more affordable vehicle if you want.
Breaking your lease before time can be complex. If you are not careful, you may end up losing money in the situation, but there are ways to go about it and do it right. Swapping your lease, buying the car, or rolling it into a new lease may seem to be a hassle, but it is all worth it if you save on payments and get what you want. eAutoLease.com offers comprehensive information on how to terminate a lease if you are moving away, or want to switch to a vehicle that suits your lifestyle and finances better.
