Maybe you're tired of making monthly payments. Maybe you're excited about buying a new car. Maybe your financial situation has changed or you're driving 2-seat sports car and your wife just gave birth to twins. No matter what the reason is, we are here to help you walk through the options for early lease termination.
When you get to the end of your lease there are usually 3 options: Buy your current leased car, turn in your lease, or turn (trade) in your vehicle and lease or buy a new one. From a financial and logistical standpoint, completing your lease contract is usually preferred. When a new car lease is signed there is a contract between you and the dealership. You're agreeing to make all the payments required and that you are going to keep up all the required maintenance for the vehicle. If, after a little while, you decide that you want out of the car or that you don't want to or can't keep making payments on the vehicle, you can't just go to the dealership and try to give it back. Your options include:
• Early lease termination
• Lease transfer
• Lease buyout
• Trade in your lease
Early lease termination
With most leases, there is an early termination option. Some companies actually allow you to turn in your lease without a penalty. But, there is a good chance you'll be responsible for any payments still left. When looking at all your options this really should be your last resort because it is probably the most expensive.
Lease transfer
If those early termination fees prove to be too high, then you might want to try and transfer your lease. When it comes to a lease transfer, the law and requirements vary from state to state. There is also the chance that the leasing company will charge a lease transfer fee but this fee is usually much lower than the fees associated with early termination. You can transfer your lease to just about anyone - a family member, friend, coworker, or even a private buyer. Whoever decides to buy out your lease will be subject to a credit check just like you were, so good credit is important. Once the lease transfer is complete, the new lessee will start making the payments.
Lease buyout
If the value of your vehicle is high, you might want to consider this option. To do this you need to pay all remaining payments and an early termination fee in cash. Many people choose to buy out their leases at the end of their term. They then sell it to recoup any costs. To make this work, you'll need to figure out if the value of your vehicle makes it worthwhile. Then it's up to you to sell it. This option could potentially net you a bit of profit.
Trade in your lease
The dealership may let you trade in your lease for a new lease (or even a purchase). When this happens, they can roll your remaining monthly payments and transfer fees into the loan or lease on the new car. This might sound great, but it could mean that your monthly payments will be higher.
If you're well below your contractual mileage and your leased vehicle is in great shape, you might actually have a bit of equity in your lease. If this is the case, the dealership might be able to offer you money toward your next vehicle lease or purchase. It's definitely worth checking out!
Listen, when it comes to terminating your lease early it might cost you some money - but sometimes you could even make a profit. If you're ready to trade in and trade up, visit the Folsom Auto Mall to find out what your options are!