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Car Leasing - Getting Out is Not as Easy as Getting In |
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Car Leasing - Getting Out is Not as Easy as Getting In
Most car leases are designed to completed according to the end-date specified in the lease agreement. Attempting to end a lease early can often be troublesome and expensive. Many leasing consumers mistakenly believe that, if they want to terminate early, they only have to return their vehicle to the lease finance company and walk away. Unfortunately, this would be a violation of their lease contract and result in collection proceedings against them for balances and fees owed. The consumer's credit rating would also be damaged by what is considered a repossession. Although most leases can be terminated early by contacting the lease company and arranging for either a buyout or early return, these options are usually very expensive due to the fact that the balance owed on the lease is typically much greater than the current market value of the vehicle -- and much greater than is usually expected. There is an option, however, that is frequently overlooked. Many lease companies, but not all, allow leases to be transfered to another party who is interested in taking the vehicle and assuming responsibility for the remainder of the lease. This option can only be exercised with the permission and participation of the lease company. To do otherwise is a contract violation. The advantage of this option to the consumer who wants out of his lease is that it is much less expensive than the above mentioned early buyout or return. The process is easy and there is no impact on credit history. There may be disadvantages however. First, as we mentioned earier, many lease companies simply don't allow transfers, which removes this as an option. Second, of those companies who do allow transfers, a large number of them insist on keeping the original lessee responsible for the lease if the new lessee defaults. This is not ideal and presents a risk that many people find objectionable. Of course, even if the lease company allows transfers and releases the original lessee from future responsibility, there's the problem of finding someone who is interested in taking over the lease. There are two ways in which this can be done. First, you can do it yourself. Find family, friends, or advertise in your local newspaper. When an interested party is found, you'll contact your lease company for further instructions. Find out first if your lease company allows transfers. Second, you can use the services of one of the relatively new online lease "swap" or "trade" companies who, for a fee, list your vehicle and help you find "buyers." They also handle most of the paperwork with the lease company when a transfer is done. Additional discussion of this topic can be found at LeaseGuide.com. If a lease transfer doesn't work out in a specific situation, other, more costly options will have to be considered. Unless an early termination is absolutely necessary, the least costly solution may be to simply continue the lease until its normal end. Al Hearn is owner and operator of LeaseGuide.com, a popular web site for automotive consumers interested in leasing. The site has served thousands of visitors since 1995.
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