Break car leasing - a guide to get out of car lease

Today’s economy often means that we may have to face some unforeseen difficulties in our finances, difficulties that can create hard situations that we need to resolve. Trying to get out of car lease would be one such situation that is difficult. Although it can be done, it is difficult to break car leasing contracts with your credit intact. Understanding your contract as well as your options will help you to get out of car lease contracts nearly unscathed.

Leasing a vehicle comes with its own set of benefits and the biggest benefit is the low monthly payments. Part of the reason you can drive a great car such as a Lexus or BMW for a lower monthly payment is because you agree to keep the car for a set amount of time; the depreciation time.

As soon as a car is driven off the lot it begins to lose value and the leasing company does not make money if you return the car early. Essentially, leasing a car allows a company to make money off of the car twice; once when leasing and then again when they sell it.

A lease is intended to usually last about two years, sometimes longer, rarely less and then the car is sold for a good amount which makes the company the most amount of money and why it is difficult (but not impossible) to break car leasing contracts.

Generally if you return the car early you are still expected to pay off the amount owed on the contract as well as any penalty fees listed in your contract. What you do not want to do is return the car before the contract ends and then refuse to pay the penalties and fees.

This will affect your credit report drastically and be listed as repossessed. There are options that are available to help you get out of car lease without destroying your credit in the process.

The first option available to you is to sell the car yourself and then use the money from the sale toward the buy off amount of the leased car; you will likely have to add some of your own money as well. Naturally you will want to do research to see what you can expect to be able to get out of the car and this way have to pay less of your own money.

This option allows you to protect your credit score but depending on how long you have driven the car and how quickly it depreciates you may have to put a large amount of your own money to make up the selling difference.

If you are leasing a car such as a Mercedes or a BMW or Lexus you will notice the depreciation is slower than a Civic or a Status or Taurus.

The second option is to allow another person to assume your lease. With the proper paperwork this is a valid transaction that allows the third party to drive the car, pay the payments through the end of the contract and return the car at the end of the contract.

This is a good option in most metropolitan areas such as Portland where some leasing companies specialize in matching people looking for short term leases with people needing out of their lease.

Expect to pay certain fees in either transaction, it will; however, be less than if you just returned the car early and paid off the contract.