Have you ever wanted to cancel your leased car agreement early, or are you planning to take the plunge? You would like to do it because of your financial constraints, or maybe you have an urgent need to buy a new car.
Some of these reasons would prompt you to terminate the car lease. We are sure there are many real reasons why you should. But when you go to the business to cancel your lease, they wait to bill you for bumps, knocks, and maintenance on the car.
Much later, they would hit you again with other charges on behalf of unpaid taxes, such as the lease balance, transportation, and storage of vehicle costs, etc. Rest assured, this is not a cheap option.
All of these conditions can already give you a headache. But don’t worry, it’s not impossible, and there are solutions and options you can always choose (with some hassle and tension). It will take effort, money, and time. Let’s dive right in and see what the effective methods are.
Return The Car
You must beware. It is not only the most expensive and least recommended option but also a super-fast way to get out of the lease.
The car leasing company will fully accept the return of the vehicle. But you may have to pay the penalties described on the agreement. This includes huge termination fees and the rest of the depreciation charges, which will cost you a huge bomb. The company would sell the car at a wholesale auction and decrease your payment by the realized value.
If you have money and need to return the vehicle for several reasons, this is the best option for you.
If you are returning the vehicle due to financial constraints, then let’s be very frank here, this is not the best option, because the penalty will cost a fortune.
Transfer Your Lease
If you have never heard of this effective way, then here it is. Transfer your lease to a third party using several third party services such as Lease Trader. Given the positive reviews and our experiences of partnering with a leasing company in the past, this deserves a few brownie points.
Many people would be deeply interested in taking over the remaining term of the lease. There are equally many companies that will help you transfer your lease to a third person.
There are also situations where people have had a hard time leasing a used car. So make sure the third person is ready to pay the remaining term of the lease. You can mention this in the agreement between you and the third party.
All you need to do at the start is to make sure that transferring your lease to a third party is not contrary to the terms and conditions mentioned in your agreement with the leasing company.
If you find it extremely difficult to spot people who are looking for such a transfer, the leasing trader will also help you.
This service does not exempt you from paying transfer fees to the current leasing company (there are many hidden fees).
Most leasing companies will help you transfer your lease. So you don’t have to worry about it. But another drawback is that you cannot withdraw your name from the contract. Technically, if the third person does not meet the monthly deadlines, you will be responsible. This is referred to as post-transfer responsibility.
Buy The Car, Then Sell It
Not many people know, but you can buy the car from the leasing company. This is called an early surrender and is the best way to detach oneself from a lease. You can buy the vehicle at any time from the leasing company while the lease is in progress for a fixed price.
This is amongst the cheapest ways to get out of the lease. So how do you do this?
The resale value of your car must be greater than or equal to the purchase price. For example, you have two years in a 5-year lease, and the purchase price of your vehicle is $ 20,000, here you can certainly buy the car and then sell it.
But make sure the resale value of the car is $ 20,000 or more. Otherwise, don’t keep your hopes high. You can check the resale value of your car using several other online sites such as edmunds.com or kbb.com etc.
You can also try to take your car to a dealership and see if they will buy it from you. They will pay you a wholesale value, which may be less than what you could get by selling it privately, but you may find it difficult to sell it privately because you cannot surrender the title until the lease is paid. If the dealership agrees to buy the car from you, you can take that money and apply it to the early termination fees on your lease.
You can also exchange the car with the dealer from whom you bought it and buy or rent a new car. If you get a new lease, the dealer can allow you to carry over the outstanding balance in your new lease. This allows you to get the new car you want with no early cancellation fees, but it doesn’t free you from reimbursing what you owe.
Advice, please do not use a mediator. Using a mediator has always created more hassle for many people. Chat directly with the leasing company.
If you buy the car from the leasing company and sell it to a third party, you must pay tax. Of course, the rules are different by state, so contact your local DMV office for more details.
At the end of the day, you should know that if you sell the car to an individual, you have the option of selling it to a dealer. The only major drawback is that it is a loss when you compare it to the sale of the vehicle outside.
However, the major silver lining of this agreement is that the dealership will take care of all the paperwork and problems associated with purchasing with the company. You don’t even have to worry about the tax.
Ask The Lease Company For Viable Options (Solutions)
Some local leasing companies are very understanding, and it is very easy to deal with them. If you think you need more time to pay off your monthly payments, express them.
If they find you very sincere and feel that you will be able to recover from your financial situation soon, they will give you more time before terminating your lease. You will certainly have to ask for such an agreement. There are a few good companies out there that are willing to offer payment relief for a few months.
This is the best option if you don’t have to pay penalties, as these reputable companies can even reduce your monthly payment or temporarily suspend it.
They will only accept this if your alternative is to default on the lease because if you do, the leasing company will incur additional charges.
Default On The Lease
It is not a method that we recommend. But some people stop making payments. They do not care about court cases or even if credit is accumulated. This is not a solution, but the only alternative if you have no options on hand.
You could end up paying thousands of dollars to the leasing company. In many cases, you will not even be able to leave the country until you have paid your payments.
For the same reason, you may not be allowed to buy another vehicle in the country. A thorough background check takes place, and it makes your life difficult when you need financing for your next vehicle.
We would not recommend this at any cost. Indeed, the consequences of not making monthly payments are frightening and will have a much greater impact in the future.
But, yes, if you have your financial constraints and you have no other option, you may have to opt for this option. But always give priority to the other alternatives that we mentioned in this article. We are sure it will help you solve your problems.
A chapter 7 on “outright bankruptcy” may be your way out of this cycle.
The “discharge” is the legal write-off of a bankrupt debt. In a case of Chapter 7, your debts are generally paid within about four months of filing your file.
The vehicle leasing obligations that you wish to evade can always be discharged under Chapter 7. The discharge of other types of debts could be challenged by the creditor, such as debts contracted by fraud. So, except in the unlikely event that you obtained the lease through a false statement or serious fraud, you can get out of a certified vehicle lease by declaring bankruptcy.
Once you successfully get out of a car lease, feel free to call NYC’s Premier Auto Leasing for a new car that suits your needs.