Plans change, things happen, and unexpected events can throw us totally off-course from what we thought we needed in our daily lives. When it comes to the terms of your auto agreement, a lease might have seemed like an apt solution at one point; yet, due to circumstances out of your control, being in a car lease no longer makes sense for you.
Fear not, millions of people find themselves in a similar predicament throughout the year, which is why it’s not uncommon to want to learn how to get out of a car lease contract early.
It’s no secret that figuring out how to get out of a car lease agreement early can be a costly and lengthy process. But, you have options at your disposal that can make the entire experience more bearable, and we’re here to discuss them with you today. Whether you lost your job and can no longer afford the payments, or you need to outright own your vehicle for whatever reason, it’s time to investigate the alternatives that can put you into a better financial situation.
Based on our research, we are going to provide you with 3 potential options below.
How to Get Out of a Car Lease Early: 3 Routes
So, let’s say you go for this option. The company may charge an early termination fee, which is normally the balance between the remaining balance and the credit you will receive from the value of the car. You may also have to pay a disposal fee, transfer fee, and taxes. All of this is disclosed inside of the signed lease.
The fastest way to know what this total is going to be is to call up the leasing company and ask them point-blank what the total is going to be. You may also have to pay late fees, parking tickets, or anything else that has been accumulated as part of your leasing account.
Since a car’s value typically depreciates more upfront, the earlier you terminate the lease, the higher the cost is going to be on your end. In many cases, the termination cost may be so high, that it makes more sense for you to complete the lease as agreed upon.
If you don’t have the financial means to do this, you may need to finance the costs if it’s a life-or-death decision.
Don’t be fooled: this option will still come with hidden fees, like the lease transfer fee and other costs that will pop up. You should do your due diligence and ask for a final total from the leasing company before you opt for the early termination. If you are struggling to find a company that you can transfer your lease to, you can consider using a service that connects you to a new lender.
Do note: in order to pursue this solution, you need to have the funds available to pay the early buyout fees. If you don’t, you will need to factor in buyout financing as part of the deal.
If the market value of the car ends up being higher than the leasing company predicted it would be, a lease buyout may be the perfect solution for you and your wallet.
Bonus: if you are leasing or purchasing another car when you terminate the car lease early, you may be able to roll over the amount you owe on the car you are returning to the amount you are financing for a new car purchase. This will create a higher monthly payment, but it at least will be one singular payment that may be easier for you to manage and pay off.
Is it a Good Idea to Get Out of a Car Lease Prematurely?
In many cases, you may have no other choice. If you go through all scenarios above and receive quotes, you can compare them and see which one makes sense. If all three options still clock in higher than your monthly leasing payment, you may want to consider financing – or – sticking with your car lease until the contract is terminated.
Note: many people buy out their leases to avoid excess mileage fees, especially if you drive more than was agreed upon initially, or because used car values have increased recently, making your current vehicle worth more than the dealer thought it would be several years ago.
The worst thing you can do is agree to one of these options without hearing the final monetary amount, first. Don’t be afraid to demand that from your leasing company: it’s a service they owe you as your lessee.
Are you ready to get out of a car lease contract early? We hope this article helped.
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