If you are tired of making monthly payments or want to get another car, there are several options to get out of your lease early. With the right information and understanding of how it can be done, you can terminate your lease early without losing too much time or money. Visit eAutoLease.com to investigate alternatives that could put you in a better financial position.
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What is early termination of lease?
When you sign a lease contract, you agree to make monthly payments for several months. You also agree to keep up with routine maintenance and repairs of the vehicle you are leasing.
The lease contract clearly states the terms of the agreement, including how long you will be paying and how much you will pay each month. If you, for any reason, are unable to make payments or do not want the car anymore, you can try giving the leased vehicle back to the dealership.
However, ending a car lease may not be so easy. While you may have options to terminate a lease before time, you just cannot drop the car off at the dealership and stop making monthly payments.
Read more: What Is a Car Lease and How Does It Work?
How to Get Out of a Car Lease Early
Here are a few options available to end your car lease early. They include:
Early Lease Termination
If you have the option, ending your lease early means you no longer have to make remaining payments on your current leased vehicle. However, it also means turning the car in and paying the balance due, including any costs, fees, and penalties associated with early termination. It is best to let the leasing company know about your decision.
How It Works
If you decide to terminate a car lease before time, the leasing company may charge an early termination fee. It is the difference between the remaining balance owed on the lease and the credit you receive for the current value of the car, based on the calculations mentioned in your lease. You may also have to pay fees like vehicle disposal fees, transfer fees, and taxes.
Call your leasing company to check your total early termination amount and ask what you will have to pay to get out of the lease before time. Remember, it could easily be thousands of dollars, depending on your lease terms and how early you want out. Also, you will have to pay any late fees, past due payments, parking tickets, and any other pending charges on the car.
Early Termination of Lease and Credit
It is important to note that due to the way lease contracts are written and how cars depreciate more upfront, you may end up paying more in case of early lease termination. Sometimes the costs are so high that termination costs more than keeping the car for a full lease term.
Lease Transfer
Transferring your lease to a new lessee is an easy alternative to getting out of a lease if you no longer need the vehicle or cannot make payments. However, to do so, you must check if it is legal in your state, permitted under your lease, and if the party willing to take over the lease meets your lender’s credit requirements.
How Does It Work?
Many people search for short-term car leases or a chance to drive a new vehicle for a limited period. You will sign a contract and transfer the lease responsibility to the individual who will continue to make monthly payments.
You will have to pay a lease transfer fee to get out of your lease. It can be anywhere from $50 to $500, depending on the lease and the company you lease from. Check and see if a lease transfer is cheaper than early termination.
While most leasing companies let you transfer the lease to another person, chances are your name will remain on the contract. It is necessary to ensure that the person to whom you transfer the lease is reliable as you will be responsible for making monthly payments if he stops paying. If you cannot find the right person, you can use third-party services to connect with people looking to take over a lease.
Read more: Mistakes to Avoid When Leasing a Car
Lease Buyout
Buying out a lease early and purchasing the vehicle outright is often the best option. You will have to pay the fees, but you can check how paying the early buyout amount along with any other fee and then selling the car can improve your financial position, as compared to early termination or lease transfer.
Is Getting Out of a Car Lease Early a Good Idea?
A change in circumstances often makes getting out of a lease a good decision. If you are moving to a place with access to public transportation, you may no longer need a car, or if you cannot afford to keep up with monthly payments, terminating a lease is a smart decision. Just make sure the cost of terminating the lease is less than what you had to pay if you keep your lease.
When Getting Out of a Lease Is a Bad Idea?
Terminating your lease before time is not a good idea all the time. If you do not like the car but it still meets your needs and is affordable, it is better to continue with the current lease till it expires. It may not be what you like, but it may be right for your finances.
You should also avoid getting out of a lease early when the cost of terminating the lease early exceeds the costs of continuing to pay for the rest of the lease. In such a case, it is cheaper to just keep the car and return it at the lease end.
With a little homework and focus, you can come up with the best option to get out of your car lease early. It is up to you to consider the pros and cons of early termination and which one would work out better for you. eAutoLease.com provides detailed leasing information, helps you decide if getting out of your lease early is worth the cost and hassle, and how to move forward with minimal losses.
