Anybody familiar with Leasing?

[b58tt]

Long story short, I'm changing careers right now and the current vehicle I drive is completely the opposite of what I need. I still have roughly 3 years left on my lease, and I'd like to terminate it early.. I just have a few questions and need some advice. The dealership has offered to buyback the car, and I think I just need to pay the negative equity or whatever.

I'm fully aware that when I step into the leasing office they'll charge me an arm and a leg to break the lease. My first question is, if I pay off all the negative equity and whatever else they charge me to break the lease early, will this affect me negatively in anyway, i.e. credit in the future?

My second questions is, is there any good advice anybody can impart on me? This lease was made when I was a fair bit less .. mature, with my parents and I really don't want to have to sit the rest of it out any longer. I'm headed into the dealership tommorow to discuss this, any thing I should look out for? to make sure I'm not screwed somehow.

Any advice would be good.

 

[FLY2kGT]

One thing you might want to do is fix any damage yourself that may have happened during the lease. You are responsible for any damage above normal usage and it's usually a LOT cheaper if you fix it yourself before turning the lease in. How long of a lease did you sign? I've traded in a leased car on a new car purchase before...like you said, you eat a little negative equity but if you get a good deal on a new car you will probably end up paying list. Just a thought.

 

[explrsport]

Early Lease Terminations = Not Fun

In general you owe all the remaining payments once the interest portion is removed. This could vary depending on what company actually holds legal title and their policies.

Without knowing your lease contract details it's difficult to estimate what that interest portion amounts to...perhaps 15%-25% of a standard 3-5 yr lease deal's monthly payment.

Say you have 24 months remaining and your current payment is $400/month. If the interest is $100/month, you will owe $300 x 24 = $7200 to get out of that lease. Plus any additional charges spelled out in your lease contract.

The dealership will consider that old payment stream balance of $7200 as your negative capital moving into a new deal and add it to the cost of the new vehicle, whether its a purchase or a lease.

As the poster above mentioned, you will also be hit for the cost of bringing the old vehicle up to reasonable condition - for example, if you have "wear bars" showing on the tires or the tread is way down, you will be dinged for a new set. You might be able to get a safe set of tires installed - even a set with some miles on them - for $200-$300. The dealership might tell you, well, WE have to put factory-approved tires back on, the same brand that the vehicle came with - and the cost could be a lot higher.

Good luck with your new deal and let us know what happened!

Jeff

 

[RisingForce]

In general you owe all the remaining payments once the interest portion is removed. This could vary depending on what company actually holds legal title and their policies.

Without knowing your lease contract details it's difficult to estimate what that interest portion amounts to...perhaps 15%-25% of a standard 3-5 yr lease deal's monthly payment.

Say you have 24 months remaining and your current payment is $400/month. If the interest is $100/month, you will owe $300 x 24 = $7200 to get out of that lease. Plus any additional charges spelled out in your lease contract.

The dealership will consider that old payment stream balance of $7200 as your negative capital moving into a new deal and add it to the cost of the new vehicle, whether its a purchase or a lease.

As the poster above mentioned, you will also be hit for the cost of bringing the old vehicle up to reasonable condition - for example, if you have "wear bars" showing on the tires or the tread is way down, you will be dinged for a new set. You might be able to get a safe set of tires installed - even a set with some miles on them - for $200-$300. The dealership might tell you, well, WE have to put factory-approved tires back on, the same brand that the vehicle came with - and the cost could be a lot higher.

Good luck with your new deal and let us know what happened!

Jeff

True,,,

Best way to handle this is having the dealership BUY IT from you, not an early lease termination,,,, when they buy the lease from you, they give you a trade-in value,,, based on which you pay the difference between the trade-in value and the payoff,,, the dealership pays it off and keeps it and you end up with a loan anywhere between $3000-$7000 based on how much negative you are (try to squeeze every penny you can for your "trade" as in with any general deal).
Keep in mind that if the dealership buys it from you , you dont have to fix anything damaged, cause they usualy deduct that from your 'trade' anyways when they appraise it .... The only time youre responsible for any damages is if you RETURN the lease (weather its early termination or end of lease turn-in)

By the way.....how long of a lease is this?? you said you have 3 years left,,, and you were less mature when you did this,,,, so you have matured that much the past year or so ?? just curious ,,,

But as I said, dont terminate the lease early cause that will cost you !!!
TRADE it in and just take a hit on the difference....
Also this should not affect your credit in any negative way as long as its paid on time and paid off without hassle.

Hope I was helpful

peace

 

[b58tt]

Sorry guys, that was my lil' brother that posted. I don't have any credit problems hahaha. I've tried to give him some advice but he won't quite listen so... can't really do much.

He told me to ask, if he breaks the lease early, and they SAY it won't affect his credit, it shouldn't right? He 's just paranoid about them saying it won't affect his credit and then giving him a bad credit report later on for no reason.