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Options for
Ending a Lease
With
finances being what they are these days
for a lot of people, some are searching
for answers on how to get out of some of
the debt that they have put themselves
into. Quite often if it comes between
paying our mortgage or our car loan or
lease it is the latter that will suffer.
However, there are options that you can
look into before you walk away.
Let’s say you leased a car that you could
afford before you lost your job or your
mortgage payment increased. Now you have
to find a way to pay for this car (as you
need it to get to work) or you have to
find a way to get a cheaper car. Simply
put, walking away will hurt your credit
records and score, so you want to find a
way out of it that won’t hurt you too
much.
The dealer does not want to take the car
back. Much like a mortgage company does
not want your house back, car loans and
lease repossessions are the last thing
they want because they lose money. The
first thing you want to do is talk to your
lender. If you have not communicated with
them they will take the car back within
180 days of not having paid.
If you have money saved you can terminate
the lease early, but this doesn’t usually
make a whole lot of sense as you usually
have to pay off the remainder of the term,
plus a termination fee, etc. so you might
as well keep the car. Sometimes they will
work with you, but let’s not forget that
they are in the business of selling cars
so don’t really count on it.
If your lease allows it, you can transfer
it to someone else. Some allow you to sell
your lease to someone else but you stay as
the guarantor. Which means if they default
on the lease you have to start paying
again, so choose carefully who you allow
to take it over. You can go online to
leasetrader.com and similar places to find
someone willing to take it over.
Best case scenario, renegotiate your
lease. The lender will usually extend the
term of the lease which will lower your
payments. You will pay more in interest
over the life of the lease, but you will
be out from under the larger payment and
will have saved your credit.
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November 2007 Archives
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