What Is The Best Way To Break A Car Lease?
You may already know that breaking a car lease is not as easy as getting into one. To actually break a car lease, means that you are no longer respecting a previously established contract, in which you were obliged to pay low monthly fees over a designated period of time (usually 2 to 4 years). Those low payments can only be sustained if the lease is completed as previously agreed upon.
Many people ask: what is the best way to break a car lease? Well there are many ways to do it, but not without risks. Since leasing is not exactly like renting a car, you cannot simply take it back after you use it and just walk away. It doesn’t work like that. The most direct approach would be the “early termination” way of breaking the car lease. This means that you have to take the car back but it also means that you will be paying quite the sum of money.
You need to understand that, the moment you take that car out of the dealership’s driveway, you just diminished its value by at least $500. This is commonly known as depreciation, and new car suffer considerable depreciation after the first two years of use. During the lease, that depreciation is divided in monthly payments for you. Now think about it: you’ve leased the car for three years, but after the first year (for several reasons) you want to get out of the car lease. Since only one year has passed, there is no way you have covered with the monthly payments, the amount of depreciation suffered by the car. Therefore, when you take the car back, you’ll have to pay a steep early termination fee that usually is even more than the amount of depreciation the car has suffered during that time (keep in mind that the dealership will always end up in profit). So it may seem forward, but this isn’t by a long shot, the best way to break a car lease.
Because of these simple misconceptions, people remain flabbergasted by the amount of money they have to pay in case of an early termination. And early termination can come with another serious outcome. The moment you bring the car back to the dealership before the lease ended, it can be considered as repossession (whether it is voluntary or not), the dealer won’t care. This can put a black spot on your credit history that will create major problem each time you’ll want to finance, make a loan or lease anything.
The best way to go would be through a lease transfer. This basically means that you can find someone willing to take over the lease (assume it) leaving you free and clear. There are some serious advantages to this technique. First of all, most dealerships accept the lease transfer without any forms of payments, fees, penalties and so on. You get out of the lease fast and easy, and probably, most importantly; you get to keep your credit score intact. The other party has much to gain as well. He will be getting a car with low mileage and no problems. Basically a car that has been looked after (all these bound by the lease contract). And finally, the other party is entering a lease that has a shorter period than any other lease acquired from a dealership, with the option of purchasing the car at its RETAIL value afterwards. So he ends up with a car in great condition that he can purchase later at its used market value.
Post tags: Tags: automotive articles, What Is The Best Way To Break A Car Lease