Information about early lease termination, lease assumption and leasing

Auto Sales Lease

An auto sales lease is a contract that is typically entered into by a lessee (the individual who will be driving the given vehicle) and a lessor (the individual or company that actually owns the vehicle). The lessee is agreeing to pay for the use of the vehicle over the period of the lease. Payment are determined by depreciation, which is the value that the vehicle is expected to lose over the term of the lease. The lessee also assumes financial responsibility for any damage done to the vehicle over the period of the lease. At lease end, the lessee must return the vehicle to the lessor, unless the lessee decides to purchase the vehicle at lease end.

Important Details

Up-front costs: Lease contracts typically require up-front costs to be paid by the lessee. These costs might include a down payment, an acquisition fee, a refundable security deposit, one month’s payment, registration fees, and/or taxes.

Monthly payment: The monthly payment is the payment made by the lessee each month to the lessor in exchange for use of the vehicle. The payments are made up of the vehicle’s depreciation over the term of the lease, interest charged by the lessor, and any taxes that may apply. The payment is negotiated up front.

Early Lease Termination: A few methods of early lease termination exist.

1. Return the vehicle early to the lessor: In this type of situation, the lessor will require you to pay any remaining payments along with early lease termination fees, which can cost thousands of dollars.
2. Voluntary repossession: There are no up-front costs, but the lessee’s credit will be severely damaged, as this is considered a form of repossession.
3. Lease assumption: By finding someone to assume your lease payments, you can walk away from your lease without any significant up-front costs. Click here to find our more information.

Lease end date: It is important to find out a drop-off point for your vehicle that is close to you and approved by the lessor. At the time of drop off, you will be required to pay any lease-end costs before the transaction is complete. These costs may include excess mileage fees, excess wear and tear fees, disposition fee, and any other lease-end costs. It is recommended that you have the vehicle inspected and repaired, if necessary, prior to vehicle drop-off so that you can avoid pay premium prices at the dealer.

Mileage: Most leases limit the number of miles that can be put on an auto sales lease vehicle each year. This range is typically between 10,000 to 15,000 miles per year. Extra mileage allowance can be purchased at the beginning of the lease. Otherwise, each extra mile is billed to you at a premium price at lease end. Lease-end excess mileage fees typically range from $.10 to $.20 per mile.

Excessive Wear: Lease contracts typically limit wear and tear to the vehicle over the term of the lease. The lessee will be billed for any excess wear and tear at a premium price.

Fees

Up-front:

1. One month payment
2. Security deposit (typically refundable)
3. Acquisition fee
4. Down payment
5. Registration fee
6. Licensing and title fees
7. Taxes

On-going throughout the lease:

1. Monthly payment
2. Monthly tax payment
3. Monthly interest payment
4. Maintenance costs
5. Insurance fees
6. Up-keep costs
7. Fees associated with traffic violations and accidents

Lease-end:

1. Disposition Fee
2. Excess Mileage Fee
3. Excess Wear and Tear

See Also:
Auto Lease Sell
Auto Lease Trade
Auto Lease Transfer
Auto Leases
Auto Leasing
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Automobile Lease
Automobile Lease Swap
A Nissan Lease
Acura Car Lease Deals
Assume a Car Lease
Assume Lease
Assume Lease Autos
Assuming a Lease
Assuming Lease Vehicle
Auto Lease
Auto Lease Assumption
Auto Lease Assumptions
Auto Lease Buyout
Auto Lease Deals