Terminating a New Car Lease Early

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November 9, 2016

There may be situations in which you need to terminate a new car lease. Your financial situation could have changed, or you could have simply decided you don't want the car anymore. Terminating the lease isn't impossible, and with the right information it may not be difficult either. Here's what you need to know.

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Lease Transfer

A lease transfer option is the best way to get out of a car lease. With this option you won't have to pay the lease or any penalties. There will be a transfer fee involved, but it's always worth the money to do this if you need to get out of the lease. Thanks to modern technology it isn't hard to find someone to take over the lease. There are many websites devoted to helping you find someone to take over your current lease. Your need to get out of a lease can be someone else's way of getting a dream car.

Lease Payoff

This option isn't always feasible depending on your situation. If you are in a position to just pay off the remainder of the lease, you can simply return the car to the dealer and pay the balance as well as a penalty fee (also called an early termination fee) and the new car lease can be broken without affecting your credit score.

Other Options

If you're in a bad position and you can't afford to wait to find someone to take over the lease, and can't afford to pay off the lease and termination costs, you can just return the car to the dealership. This will prevent an involuntary repossession and the headache that can cause.

It will still negatively affect your credit, and you will still be responsible for the termination fees and the remainder of the lease. The lease company will end up getting a collection agency to try to recover. If you're in a dire situation, this will at least stave off the collection process and buy you a little bit of time.

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