Do you think that it is very easy to walk away from a car lease agreement before the completion of its actual term? Think again because car lease is a long-term agreement, where you have to pay the balance you had committed during the agreement until the deal reaches the remaining value.
However, it is not that there is no way to get rid from the burden of a car lease agreement. There are many ways to terminate from car lease agreement before the stated expiration date. In this article, we will talk about some convenient ways through which you can walk away from a car lease agreement.
Lease Exchange with Third Party
Transferring the lease to a third party can be away to walk away fromthe agreement. Your chosen individual will take over the responsibility to make your due payment to the car leasing company.
If you have decided to end the car leasing agreement, then transferring the agreement to a reliable third party will be a cost effective procedure, because to complete the transaction, you just have to pay the administrative fees. The original lease agreement will then be handed over to the new party and that will definitely be a possible financial hit for you.
Changing Car Lease Agreement
You can ask the leasing company to change your existing car with a new one through which you could terminate your present agreement with them. However, this option will not be executed without evaluating the situation of your existing car, as you have to pay the amount of your first lease, the capital value of remaining balance and the taxes.
If the market value of your existing vehicle is less than the remaining balance of the lease agreement, then the extra amount will be transferred to the new lease and the new agreement will end up with the payment of depreciation on two vehicles.
Early Lease Buyout
You will always find the option of buying out the lease early in car lease agreement. However, you can buy the vehicle from the dealership or the financial institution, but the price of the vehicle will add up your outstanding balance such as residual value and applicable taxes.
However, the price of the vehicle can exceed to its actual market price, because several additional charges will be included in it. In such cases, selling out the vehicle in the market can provide you benefit from which you can pay your residual balance and purchase cost of the vehicle.
Repossession
The option can cost you less than others, but it has heaviest consequences. You can simply stop making payment to the car leasing company and consequently the company will recuperate the vehicle from you. Then the dealer or the financial institution will take necessary steps to collect the remaining balance from you.
However, the approach will definitely damage you credit record and it will be very difficult for you to make any further agreement with any car leasing company.
Returning the Vehicle
You will always have the chance to bring back the vehicle to financial institution or the dealership so that you can maintain your obligations and avoid the credit record defamation. In this process, you will have to pay your monthly payment regularly until the end of the agreement.If you do not return the vehicle and pay fees for excess mileage and damages, the leasing company may force you to pay for those services that you do not take advantage of.
