Purge

A friend of mine and I were recently having a conversation concerning leasing...

A couple of topics were not able to be agreed apon, so I thought I might post the questions here and see what you guys thought the answers might be...

What is the typical penitaly you might expect to pay if you want to get out of your lease early? I know they vary from company to company, but is there a general rule?

What happens if you are currently leasing a car and want to trade it in on a different make and model?

Thanks for any and all input you might have concerning this topic!

mjcohen

my lease has a $150 early termination fee, so I guess just $150. I don't know if there are additional damages if they can't sell or release the car. I guess I'm just not sure. Definitely is a case by case (depends solely on the lease agreement) basis.

Jay2000

There are four ways to break a lease early. One, trade it. Two make the remaining pmts. Three, let the repo man get it. lol. Four, sell it. The problem with trading it is, if you are to early in the lease you a traditionally buried in the vehicle. If you are near the end of your lease see what the buyout is. and what the acv(actual cash value) of your car is. Subtract the two. Than add your remaining payments. Whichever is less, do.
The first step is the call the bank and get a buyout on your car.
Ex: buyout 14500
remaining pmts 6 @325.5 = 1953
acv 12200 diff.= 2300.
have the dealership make your last pmts rather than trading it. but read your contract , because some banks have early termination fees, or disposition fees.


good luck

jefff

It can be done. I was able to get out of my '00 Integra Type-R 14 months early, and I actually made money! I got lucky and happened to visit a Honda dealer who realized how rare and in demand the Type-R is in my area. He offered me $20k for it. My buy-out was $18.3k, so I made $1700 and put it down on an '02 s2k. The dealer took care of everything. They paid off my lease, and I just assumed the payments on the new car. I just picked it up about six weeks ago. Formula Red, and I love it! The deal was 1500 down, 459/mo. Not to bad... I still gotta go take some pictures.

VR WHAT

I was sweating my lease agreement terms too wondering the same thing. Thanx for answering fellas. I have what is called a "balloon" lease. Is there a difference from a regular lease? The guy told me I was basically financing the car? Please explain!

Thanx,
Chris

Jay2000

A balloon pmt is a lease, just named different. The primary difference is you have the option to purchase the vehicle in your contract to purchase at the same pmt. If you do not want to keep the car make sure you turn it in at the end of your pmt term... ie 36mo 48mo. or you own it. Just like a balloon on a house.

VR WHAT

Oooooooh OK. So I have to make sure to tell them when my lease is up. Ill probably sell it by then anyways.

Thanx alot,
Chris

Audball

As a related question, does anybody here have experience personally selling a leased vehicle (rather than trading it in at the dealer)? The balloon amount is due on my wife's Accord, and we could get close to $2k over what the dealer would give by selling it ourselves. Anybody know of any 'gotchas'? I'm assuming (aside from any early termination fee, which we could probably avoid since the lease is basically up anyway), that the process would go like this:

1) Sell to buyer
2) Send in proceeds to finance company to pay off the balloon
3) Recieve the title, give to new owner (how does one legally transfer it, anyway?)
4) Use net positive value for downpayment

Correct?

We were currently planning on simply trading it in (buying a new CR-V from the same dealership we got the Accord from), and using the (smaller) net value and tax credit towards the down payment... Since the balloon amount is due in less than a month, the convenience factor of just trading it in might be worth it anyway...

Opinions appreciated,

Dave