Five Ways To End Your Car Lease Early

At the time, leasing a car sounded like a great deal: You got to drive home in a brand-new car for far less than you would have paid if you bought it outright. And in two or three years, you get to return it the dealership, buy it, lease a newer model, or just walk away. Great!

Fast-forward a year or so, and your situation has changed. The same, shiny new vehicle you loved at lease signing might not be the right fit anymore. Maybe the small car you leased can’t accommodate your growing family. Maybe your financial situation has changed, and you can no longer afford the monthly payment. Or maybe you have changed jobs, and your new commute threatens to blow your yearly mileage limit.

Whatever the reason, if you need to get out of your lease early, there are options. Unfortunately, none of them are going to let you walk away without penalty. Dealerships and banks make money from leases by predicting what your car will be worth when you turn it in and charging you the difference. Essentially, you are paying for the vehicle’s depreciation in value plus a little extra for as long as you drive it.

If you decide to terminate your lease before the end of the agreed-upon term, your titleholder stands to lose money. They are likely to make an early exit difficult and expensive to discourage lessees from trying to do exactly what you want: get out of the lease early.

That being said, it happens all the time. Here’s how.

1. TRADE IT IN.

This is both the simplest and quite likely the most expensive of your options. Many dealers will allow you to get out of your lease early if you are looking to get into one of their newer or pricier models. But you are likely going to have to pony up all the fees and penalties that were spelled out in your lease contract. According to DMV.org, those penalties can include:

  • Remaining payments on your lease
  • An early termination fee
  • Costs related to preparing the vehicle for sale
  • Storage and/or transportation of the vehicle
  • Taxes associated with leasing, if any
  • Negative equity between your lease amount and the current value of your car

You may be able to roll penalties into your new monthly lease payment. If not, it’s a hefty premium to pay to switch vehicles.

2. SWAP YOUR LEASE.

Lease-swapping involves finding someone else to take possession of your leased vehicle and fulfill the remaining terms of the contract, including monthly payments and any penalties or fees assessed at turn-in. You can find a new lessee on your own or use a lease-swapping website, which may charge you a fee in the $250 to $500 range if you are successful. If you are desperate to get out of your lease, swapping it could cost you a good deal less than termination.

Here’s the catch: Some lessors simply don’t allow it. You will have to take a close look at your original contract to see if it is even an option.

Many lease companies require the original leaseholder to remain on the paperwork in the event of a swap. If that is the case, you essentially become a cosigner for the new lessee. If they default or incur penalties they can’t or won’t pay, the titleholder can still come after you for the funds.

3. BUY IT OUTRIGHT.

Every lease agreement includes a clause that allows you to purchase the vehicle outright at any point during the term. Look for the “buyout amount” listed on your most recent statement. It’s a close approximation of the total of your remaining payments plus the predetermined residual value of the vehicle.

To decide whether this strategy might work for you, the first thing you will want to do is determine how much your vehicle is actually worth and compare it to the buyout amount. You may be able to resell it and recoup or even exceed the purchase price.

Even if there is a small difference, a buyout may still be worth it — at least you will avoid all those penalties. But if the buyout amount is substantially higher than current market value, then this path will likely cost too much.

4. TALK TO YOUR TITLEHOLDER.

If you don’t actually want to get out of your lease entirely, but you do need a break from your monthly obligation, your leasing company might be willing to work with you to find a solution. They may suggest temporarily reducing (or even suspending) your payment amount and making it up on the back end. It’s not ideal, but if it gets you out of a jam and prevents an early termination, it could be the best option for both parties.

5. JUST LET IT GO.

Faced with the need to exit a lease, some lessees simply take their vehicles back to the dealership, hand in the keys, and leave. In auto finance lingo, this is known as a “voluntary repossession.” This option should be your last resort. It will have a profound impact on your credit score, just like any other repossession.

You may also be tempted to simply stop making your payments and allow the titleholder to attempt to repossess the vehicle. This is no more advisable than a voluntary repossession. The combination of missed payments and the repo will stain your credit report for at least the next seven years. These derogatory entries will severely hinder your ability to open new credit cards, get approved for a mortgage or, in some cases, land a new job or apartment.

For more advice on getting out of your lease the right way, talk to the experts at Innovative Funding Services (IFS). We specialize in car lease buyouts, and we may be able to help you buy out your lease early. If you are ready to buy out your car lease, apply now. We offer up to 100% financing for those with credit scores of 525 to 850.

Share or Bookmark this post…
  • Facebook
  • Google
  • LinkedIn
  • TwitThis

Hot Weather Remote Start FAQs

Summer 2017 is shaping up to be one of the hottest North American summers in history, and there’s nothing worse on a summer than a burning-hot vehicle to drive in. Compustar remote starters are the perfect solution for cooling down your vehicle before you hit the road so that you and your passengers can ride in comfort and safety.

The Compustar Marketing Team (CM) sat down with one of Compustar’s technical support agents, Josh W. (JW, MECP), who answered some common questions regarding remote starters in hotter climates.

CM: How do Compustar remote starters work in hot weather?
JW: Just like you would remote start your vehicle’s engine to turn on the heater during winter, you can also remote start your vehicle to turn on the A/C system to cool down your vehicle. To do this, turn on your A/C and set your temperature on your vehicle’s dashboard before leaving your vehicle. When you remote start, your A/C will automatically activate at the preset temperature.

CM: Can a vehicle’s A/C cool down the vehicle, even when it is not moving?
JW: Yes! A vehicle’s air conditioning unit can cool down the vehicle, even when idling. The vehicle does not need to be moving or at high RPMs for the condenser to charge the air conditioning. Once the engine operating temperature is reached, the cooling fan(s) attached to the radiator will start up to keep the engine from overheating provided the vehicle’s cooling system is within proper operating parameters.

Note: older vehicles may take a little longer to cool down when idling. But remote starting the vehicle also circulates the air and alleviates some of the pressure that causes the intense heat inside of a vehicle. So regardless of your vehicle’s age, your car will be much more comfortable to drive in if you start it at least 5 minutes before hitting the road.

CM: Is it safe to remote start a vehicle in hot weather?
JW: It is generally safe to remote start your vehicle in hot weather. We recommend remote starting the vehicle while it is in open air, in a well-ventilated area and not in a garage or enclosed space. In extreme heat, you will want to make sure that your vehicle’s cooling system is functioning properly before using the remote start feature to avoid overheating the engine.

Most automotive manufacturers recommend that you have your engine coolant flushed and refilled every 30,000 miles or 5 years. Mechanics will usually test other parts of your cooling system at the same time, including the thermostat and hoses; to make sure they are within operating parameters.

CM: Can I customize my Compustar remote starter too, for example, lower my windows or open my sunroof?
JW: If your vehicle is equipped with power windows and/or sunroof, your installer can connect those features to your Compustar remote start system so that you can activate them using your Compustar remote or the DroneMobile app. Your installer can also add a temperature sensor to your vehicle so that remote start functionality is automated. Make sure to ask your installer/dealer about climate control and customization options ahead of time and they can go over your options with you before beginning the installation of our system.

We hope that Josh’s answers provided some additional insight for you as you consider a Compustar remote starter for your vehicle. Contact your local authorized Compustar retailer today to request pricing, options, and more info for adding a remote start to your vehicle.

Important Note: Compustar remote starters do NOT make it safe to leave a child or pet unattended inside of a hot vehicle! Please use your Compustar remote start system to cool down your vehicle before you and your passengers re-enter your vehicle.

Share or Bookmark this post…
  • Facebook
  • Google
  • LinkedIn
  • TwitThis

OESA President Cites Warranty Collaboration as Industry Imperative

Neil De Koker, president of the Original Equipment Suppliers Association, OESA, recently called for automotive industry executives to work together to focus on reducing industry warranty costs. In a brief address to attendees of the Management Briefing Seminars, De Koker said that OESA has created a Warranty Management Council, responsible for developing recommendations to reduce warranty costs.

According to Warranty Week, the industry spent $11.5 billion on warranty claims in 2004. OESA proposes that it is the responsibility of both suppliers and car companies to seriously look at warranty and other non-value added costs.

"We heard from speakers today who tell us that the next two years will require significant and extreme action to maintain profitability," De Koker stated. "It is imperative that members of the industry collaborate to reduce warranty costs to keep companies competitive.

"OESA proposes that suppliers work with the car companies and each other, to provide insight into best practices that can reduce warranty costs," De Koker added. "The objective of this OESA group is to share best practices that reduce warranty costs for the benefit of the entire industry."

OESA anticipates releasing a publication that outlines a process the automotive value chain should consider to systematically reduce warranty potential during product development. Through this activity, suppliers exchange experiences working with various OEM warranty systems and collectively increase individual company knowledge.

Formed in August 1998, OESA provides a forum for automotive suppliers by addressing issues of common concern through peer group council; serving as a reliable source of information and analysis; and providing an industry voice, when appropriate, on issues of interest. With nearly 400 members having global automotive sales exceeding $300 billion, OESA represents more than 60 percent of North American automotive supplier sales.

Share or Bookmark this post…
  • Facebook
  • Google
  • LinkedIn
  • TwitThis