Maybe you have been leasing a car for a long time or just a short while. But now, for whatever reason, you want to break a car lease early. Before you do so, consider the disadvantages of this option. It may be worth simply finishing out the lease instead of dealing with the hassle of early termination.
Leasing a car is a great option that works out very well for many consumers. The monthly cost is considerably lower than purchasing. This means you get more car for the money – and a new one to drive every two to four years. Also, there is no down payment required, and taxes are lower when leasing.
But there are two sides to everything. In leasing a car, the major downside is that you do not own the vehicle you are leasing. In the end, you must surrender the car completely. Also, you are charged extra if you exceed the number of predetermined miles you are permitted to use as well as if you incur one too many scratches and dings.
Several drivers consider breaking a car lease early due to falling behind on their payments. This is not uncommon. Late payments are a fact of life many have struggled with on various occasions. Ending a lease may seem like the responsible thing to do but it can actually be worse than waiting it out.
There are several good reasons that you should wait out your lease instead of opting to terminate a car lease early. The early termination fee can cost up to several thousand dollars. In addition to this fee, you will also be compelled to pay the balance of what you would have paid to drive the car for the duration of your lease.
Additionally, if you choose to break a car lease early and are unable to pay your balance, the choice will appear on your record as “repossession.” On paper this looks a lot worse than what actually happened. The record will damage your credit and negatively affect your financial freedom in the future.
Before you make any hasty decisions, call the leasing company and explain your situation. They may work with you to work out a new payment option that enables you to ride out the rest of your lease. If you must break a car lease early, the best option is to transfer your lease to someone who can afford to take over.
Besides a small transfer fee, this choice incurs no penalties and will not affect your credit. In order to ensure that all goes smoothly, check with your leasing company and follow the proper channels. When a new lessee is approved to sign the papers, you can successfully end a car lease early.