Getting out of a car lease
What is the fallback option if you need to get out of your car lease?
Posted 9/14/2012
As more people begin to lease again (latest figures show 24% of car sales as leases, up from 18% a few years ago), it's important to know the full picture of auto leasing. Sure, it's a great way to get more car for your money. But look beyond the low monthly price and leasing may not be the right move for everyone. Mileage constraints, overage charges and increased insurance costs might catch you by surprise – but not until after you signed on the dotted line. What are your options if you're now stuck in your lease?
1: Return The Car. Some people go back to the dealer if they need out of their lease. The dealer will be happy to see you. After explaining that your relationship is now with the bank they will try to sell you another car.
2: Break The Lease. When you call the bank and ask them to break the lease contract they will add up the remaining payments you still owe on the contract and ask you to write a check for that amount. For some people this could be a $10,000 check.
3: Default. If you can't afford to make the payments and can't afford to break your lease contract you may opt to stop making payments. This will result in loan default and will be extremely negative for your credit rating.
4: Transfer Your Lease. In this option, you can't sell your lease but you can transfer ownership of the lease over to someone else. Few people realize this because it's a service not advertised by dealerships. Transfer services through companies like Swapalease.com and Craigslist allow people to find others looking for a short-term lease. The fee for such services starts at $59, and the bank removes your name from the contract after adding the next person's name.
