Many customers have asked us how we would evaluate the state of their leasing contract. Is it possible to find someone who would be willing to assume this lease? Will it cost a lot of money to buy this lease out? Is re-financing really a viable option? Once again every case is different, but let’s look at some factors that often contribute toward helping or hurting your lease situation:
Vehicle is Over Miles – So you’ve found yourself in a situation where your car is well over the allotted miles on your lease. What to do? One option is to pay the overage off directly to a seller upon transferring your lease. This is calculated based on the number of miles the vehicle is over at the point of transfer multiplied by the over mileage penalty imposed in the lease contract ($0.20 per mile, for example).
Another approach to consider is simply buying the vehicle out at the end of the lease. Most leases have a “buyout price” that states how much you should be able to purchase your car for at the end of the lease. If turning your vehicle into the leasing company will incur thousands of dollars in “fees”, you may consider buying the car at the buyout price and then reselling it yourself or perhaps refinancing it into a loan. This will help you avoid excess mileage fees. Beware: your vehicle may still be worth less than you are paying for it because of the additional miles.
Vehicle is at the Beginning of the Term - If you are 2 months into a 60-month lease term, you effectively have a relatively new lease. Anyone looking to assume your lease has nearly the same cost structure as if they were to lease the car brand new. You may want to promote the fact that you have already put money down on your vehicle or paid certain acquisition fees that the new buyer would not. But for the difference in cost, a seller may be more inclined to get a new vehicle with all the options they desire. Getting out of a lease from the very beginning is often the hardest thing to do. You are typically in the best shape to transfer or refinance your lease when you have less than 36 months remaining in your lease or have been in your lease at least a year.
Vehicle is Damaged – If your vehicle has damage that may impact the resale (or re-lease) of your vehicle, it is often more cost-effective to repair the vehicle at your own cost to make it more marketable than to try to pass off the damage in the sale of your lease. Sometimes, you may be able to get a lease buyer to negotiate the cost of the damages with you if the lease is a good deal or you are under miles.
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