A car lease is all fun and games, until one has to opt out of their agreement. It is often a very costly experience in terms of penalties and termination fees. The lease company might try to soften the blow, but generally, lease agreements are designed such that the financial interest of the company are protected. Still, there are ways through which one can get out of their car lease early. Websites and service providers like Leasequit offer creative ideas. Still, there are things that everyone looking to get out of their lease must know about.
Understand the process
The first step is to have as much information about how the process works as possible. Leasing works much like rentals, only that it normally involves much longer contracts. Most people prefer leasing to direct purchase because it allows them the luxury if a car they want, at a much affordable rate. A lot of the details in the lease agreement are up to the individual taking the car, like duration, the years, miles and insurance. Most people also negotiate the lease agreement depending on how much they can pay every months for the car.
Getting out early
It is a long tem agreement that many people often see through. Still, those that are stuck in unhappy lease agreements can opt out of them, sometimes leaving even with pocket change. The first option for getting out of a lease is to have another person assume it. Finding an individual to take over the lease is contingent on understanding the reasons why one might need to do this. The most common ones are;
- The need for a short term lease without having to commit
- Avoiding the huge down payments
- Change in life situation which might require an extra or a larger vehicle
- The need to swap cars
Lease companies charge a fee for transfers, but most of the cost is normally assumed by the person assuming the lease. This might seem ominous, but at the end of the day, the total cost will be more than that which would have been paid for an early termination.
While it is possible to transfer leases, in most cases it is actually only about 80 percent of the contract that is transferred. Many companies will still require the original owner of the lease to maintain some liability after the transfer. The name of the original lease holder remains on the contract, and they can sometimes be held responsible for unpaid balances. Essentially, the person who signed the original lease is considered a co-signatory on a loan. If the first person defaults, then the bank will try to recover funds from the second person named in the contract. A small portion of lease companies do not allow transfers at all.
Before transferring the lease, it is important to have this checklist nailed down.
- Does the company involved allow transfers?
- Has the lease company checked the credit of the person to assume the lease and confirmed it good?
- Is it possible to retain some responsibility for the lease?
If all these answers are a yes, then set the process rolling.