Help! I Want Out Of My Lease
Sometimes you change your mind. It happens in life and in car leasing too. Before now, early termination of a lease agreement required the lessee – that’s you – to pay remaining monthly fees and an expensive penalty. Although your contract may seem pretty strict about leasing terms, time frames and costly fees, there are some ways around being stuck in the deal. The BuyingAdvice Team will help you out with the best advice on how to get out of a car lease.
If you want to terminate your lease because you can’t afford it anymore, aren’t satisfied with the car, or simply found a better deal, all you have to do is take advantage of new online services that bring together people wanting out of a lease and buyers looking for an affordable, short-term lease that doesn’t require a down payment.
For a small fee, you can post the lease you’re trying to get out of on LeaseTrader.com or Swapalease.com. For about $50 to $150 dollars, you can post an advertisement with the details of your car, including lease payments, and mileage. Prospective lease seekers, who have been cleared by rigorous credit checks, can then see your car, communicate with you about it, and agree to take over the lease. The price paid on the lease depends on monthly payments, the amount of time remaining on the lease, the vehicle’s condition, and how much of the mileage allowance has been used.
The lease trading service also takes care of verifying the potential lessee’s creditworthiness, but the original lender or leasing company ultimately determines if the transfer is allowed. Once your lease is transferred, each party pays anywhere from $95 to $150 to complete the transaction.
But there can be a big catch. There are two ways to transfer the lease, and many leasing companies only allow the type of transfer that includes the original lease holder as a guarantor — so if the new lease holder doesn’t make the lease payments, then you are responsible for them. The reason? All too simple. Auto leasing companies want to sell new leases, not recycle old ones. This type of lease transfer is called an equity transfer, and the type of lease transfer where you won’t be liable if the new lease holder fails to make payments is called a lease assumption. You should make sure to find out from the leasing company which is available before getting out of your car lease.
If your leasing company allows a lease assumption, rather than an equity transfer, then all the benefits, as well as lease requirements, are transferred along with the car, which means the new lessee is responsible for damage, wear and tear, and maintenance records. If your leasing company only allows an equity transfer, and you’ll still be on the hook for payments if the new lessee fails to make them, well, it might make sense to stick with what you’ve got.
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