How Can I Terminate My Car Lease Early?

How Can I Terminate My Car Lease Early?

When you lease a car, you are required to make timely payments, perform maintenance and keep the car for an agreed period. However, you may feel like terminating the car lease early due to some reason. Some of the reasons for ending a car lease early can be relocating, lifestyle changes or financial conditions. There is a misunderstanding that a car lease cannot be terminated early. The truth is, like other leases, you can terminate a car lease before it expires. The question is are you ready to bear the costs involved? Here are some ways to terminate your car lease early. But first, let’s see the costs involved.

What Are the Costs Involved in Terminating the Lease Early?

If you choose to terminate the car lease early, you need to pay all remaining installments for the agreed period. You also have to pay an early termination fee along with taxes that are applicable to the car lease agreement.

Different Ways to Terminate Early

Find Someone to Take Over the Lease

It is one of the best options to exit out of the car lease early with minimal loss. In this arrangement, you need to find a person who is looking for a car lease for a shorter period and doesn’t want to go through the hassle of approaching car dealerships for the same. When you find such person, you need to reach an agreement over the payments and the conditions of the lease transfer. The lease transfer process can take three weeks or longer depending on both parties and the leasing company.

If the leasing company allows a car lease transfer, it will initiate a credit check of the new lessee to ensure the potential customer has good financial standing and records. If everything is good, you need to prepare the documents for lease transfer. If you find this whole process difficult, you can approach lease transfer companies who are specialist in such tasks. There are several lease transfer companies in the U.S. and you can visit their website and request a quote. The lease transfer company works with the leasing company and prepares all paperwork on your behalf. There are no termination charges or other penalties involved in a car lease transfer. You are only required to pay a small transfer fee. With a lease Transfer Company by your side, the whole process of a car lease transfer becomes easy for you.

Return the Car to the Dealer

If the car lease agreement does not allow transfer of the lease, one of the options is to return the car to the dealer. In this case, you will be required to make the remaining payments for the agreed period and also pay a small termination fee. Although this option does not sound economically viable, it is the best way to save your credit score from negative markings. Remember, if you default on payments it gets reported to the credit bureau and it will lower your credit score. With a low credit score, it will be difficult for you to get a new car lease in the near future.