Buying or leasing a car can be a long-term commitment.Â Signing on that dotted line, you know youâ€™ll be responsible for covering the payments on the vehicle for two or more years and over time your needs can change. When you commit to a vehicle today, thereâ€™s no way to predict your financial situation and lifestyle requirements years down the road. Before your lease is over you could change jobs, or need to trade in your Porsche for a practical minivan as your family expands. So what can you do if youâ€™ve taken on a car lease for a vehicle thatâ€™s just not working for you anymore?
Pay to Terminate the Agreement
It is possible to end the lease early, but you will pay a termination fee (based on how much time is left on your lease) and have to pay back all payments owed for the remainder of your lease period. If youâ€™re looking to end your lease because of lack of affordability, this option isnâ€™t realistic. Even if you can afford to, paying a huge lump sum on a vehicle you no longer want isnâ€™t ideal anyway. Consider this a last resort option, but know it is available to you.
Transfer your Lease
The better option is to find someone to take over your lease since you wonâ€™t end up with large fees to terminate your lease. Basically, this process involves â€œsellingâ€ your car to someone who will be legally taking over the lease for the remainder of the term. The process can be laborious if you try to do it on your own, but there are lease transfer companies like Swapalese or LeaseBusters that will advertise your vehicle and work with the financing lease company to transfer the lease agreement to the new owner . They do charge a fee for their services, but the process is far easier on you.
Sell the vehicle to the dealer
In many cases a dealer will sell your vehicle and pay off the lease company if you buy or lease a new vehicle. If you call the general manager or owner of a small dealer, they’re much more likely to help you find out. What they do is call the latest auctions to find out what your car is selling for. If the auction price is close to your lease payoff, you can often negotiate your lease as a ‘trade-in’ and if there is money owed, simply wrap that into the new lease or car loan.Â This is often the easiest way to get out of a loan. There may be early pay off fees, but again it can be wrapped into your new lease.Â Remember, when you sign a new car lease the payoff schedule is probably one of the most important pieces to negotative.
How to Avoid Breaking a Car Lease
Leasing a car is a long-term commitment, so while you canâ€™t predict what might occur in the future, you can attempt to anticipate and plan for it. Think youâ€™ll have a family before the 5 year lease term will be up? Buy a car that will accommodate one or more child. To ensure your leased vehicle always remains affordable to you over time; choose one with a monthly payment well below your maximum budget.
Edmunds.com has more tips on what you need to do to prepare for breaking or transferring your car leaseÂ .