paying off a lease

[cjnix29]

Can you pay off a leased car early? We have about a year left, and DH hates this car. I was thinking of adding some to our monthly payment, so we could get rid of it sooner. But wasn't sure if that was possible.

 

[bdcp]

Can you pay off a leased car early? We have about a year left, and DH hates this car. I was thinking of adding some to our monthly payment, so we could get rid of it sooner. But wasn't sure if that was possible.

Read your lease, but I think most of them (if not all) are about the length, not the total amount.

 

[powellrj]

Do a search, there are some great threads about getting out go a lease early.

 

[MichelleVW]

Totally possible...we lease cars all the time and never keep them til the lease is up. Don't ask me how lol...that's DH's hobby...but it can be done.

We don't add to our payments though...he just calls his car salesman and next thing I know...we have a different car.

 

[davedmaine]

Read your lease, but I think most of them (if not all) are about the length, not the total amount.

That's what she said

 

[bumbershoot]

Definitely RE-read your lease (b/c I'm sure it was read before you guys signed it, you just need a refresher) to see the policies.

I leased 3 cars, and paying it off early was no cheaper (b/c the total interest was already factored in when it was split up into payments, so I got no financial bonus from paying it off early) and it made NO difference in when I could turn it in. And turning it in early meant fees. Which I was told were waived when I leased a new car...but they weren't...they were folded right into my next car's lease payments. Hiding...I read through everything and still didn't catch it until the end of my third lease...but they were there.

 

[I loveStitchnippyjon]

DSis just got a new lease 8 months before her last car lease was up. She negotiated with the dealer so he paid off the penalties for early termination, and her new payments are just the same as before!

 

[tvguy]

I have no first hand knowledge. But I have a friend who always leases Hyundai's from the same dealer for a 3 year term. About half way through his lease they always call him and offer him a new car, and a new lease for the same payment amount, new 3 year term, no penalties because they want his current car to sell as a used car.

 

[cjnix29]

Ok, thanks for the help. I can't find our lease. We have moved recently, and it's buried somewhere, but I will keep looking.

 

[MomToOne]

You can turn the car in early, but it will be considered an early lease termination. You will be responsible for the difference in the residual value as calculated under the lease agreement vs. the price they can get for it at auction.

Generally, it is much, much better to hold out until the end of your lease. At that point, the leasing company has to eat any difference between what they calculated as the likely residual value at the end of the lease, and what they can get at auction in the current market. They took on that risk as part of the lease, but ONLY if you run the lease to it's end.

However, if you are really determined to get rid of the vehicle, call your leasing company to figure out what it will cost you. The calculations are complicated. But if the car has held value better than was expected when you first got it (as some used cars have done), then you might be able to get out of it at no cost. The financing company will generally sell the car at auction, so the value they get for it will be much lower than what you see similar cars selling for on car lots. (While you may turn the car back into the dealer you got it from, they aren't the owners and don't resell it - they just hold it until the leasing company comes to pick it up. Sometimes the dealer may chose to buy it from the leasing company - again, at auction prices - if they think they can make a higher profit flipping it vs. other used cars they may be offered, but that's not a given, and you don't get any increased value from it.)

And for those guys where the dealership convinces them to come and get a new car early, well, the dealers are just writing the costs involved with the early termination into the new lease agreement, or covering it by not giving you as low a price on the car as you would get otherwise. Dealers don't give stuff away for free. (For those that don't know, you can negotiate the price of a car if you are leasing it just like you are buying it - the lower the price, the lower your monthly lease payment).

 

[MichelleVW]

I have no first hand knowledge. But I have a friend who always leases Hyundai's from the same dealer for a 3 year term. About half way through his lease they always call him and offer him a new car, and a new lease for the same payment amount, new 3 year term, no penalties because they want his current car to sell as a used car.

Pretty much the same here except Toyota!

 

[HM]

I'd just deal with the car until the lease was up, but be a lot more careful with choosing the next car. Start looking before the lease is up, so he knows exactly what he wants when it's done and will be ready to negotiate a good deal.

Sorry he hates the car. I had one I didn't much like for several years (owned) and was so glad to replace it when we were able to.

 

[O RLY]

I'm in the market for a new car- What kind did he get and why didn't he like it? Thanks

 

[MichelleVW]

Honestly if he wants a new car all he has to do is go to the dealers and trade the leased car in for another one. Doesn't even have to be the same dealer and they don't need your lease contract. I think I only had my last Camry 6 months before my husband traded it in for the Buick Enclave I have now.