At first you were so excited to be able to get a lease with bad credit. But those bad credit rates were just too tight for your poor budget and now you want out. What are your options?
Lease Contract Options, A or B
If you're unhappy with the terms of your auto lease contract, you would think that you could renegotiate those terms and refinance as you would with an auto loan. Unfortunately, this isn't the case.
Typically, leasing terms outlined in an existing contract (for any credit history) are set in stone and cannot be altered. In order to change your situation, you will need to end that contract and enter into a new arrangement, and this usually means doing one of two things.
Getting Out Entirely
If you wish to end a leasing agreement early in order to get into a different car altogether, you can terminate the contract, but you will be subject to substantial fees for doing so.
- The Early Termination Fee: This is the penalty fee that is charged for ending a leasing agreement early, and the amount of this fee varies from company to company.
- Depreciation Fee: This fee can cause lessees to owe thousands of dollars when they break their contracts. Basically, anyone one who leases a car is paying for the vehicle value that they use up while they are in possession of the car.
- A Lease Transfer: This involves arranging for another person to take over an existing lease agreement, and it is certainly the most cost effective way of getting out of a lease if it is, in fact, an option. Unfortunately, not all leasing companies allow lease transfers.
Buying the Car
If, on the other hand, you simply want different terms for the same vehicle, you may be able to end the lease and buy the car. If you want to do this before the contract is up, you will still owe an early termination fee, and it is better to buy out the lease towards the end of the agreement, as opposed to early on.
Just make sure that you do the math in order to determine whether or not this is the best option. Depending on where you’re at in the leasing contract and what the vehicle’s value is, you may be better off just sticking it out until the end of the agreement. You could then turn in the leased car and look towards purchasing an affordable vehicle with appealing loan terms.
Passing Your Lease To Someone Else
Depending on which lender is holding your lease, they may allow you to pass your lease on to someone else. Passing on your lease responsibilities however isn't an option many lenders will allow you to exercise. The only option they will allow is fraught with risk, and that's having someone you know and trust take over the payments in exchange for driving the car. While this may sound like you're passing on responsibility, its even worse than co-signing on the lease. You're still entirely on the hook if they miss payments or do any damage to the vehicle. Needless to say we don't recommend it.
Getting the Right Financing
If you are looking to purchase a new or used car, it's a good idea to get your loan taken care of first. And Auto Credit Express can help you make this happen. We can assist you in obtaining the freedom and convenience that comes with vehicle ownership, no matter what your credit looks like. Just fill out our fast and secure application to get started today.