Leasing a new car can give you the opportunity to get the car you want for a payment that you can afford. In some cases, after taking out a lease on a car, you may want to get out of the contract early. This can cost you money and it could hurt your credit.
Walking Away from the Lease
Some people in this situation simply walk away from the lease. They drive the car back to the dealership, hand over the keys and then stop making lease payments. While this will work, it also can damage your credit significantly. When this happens, it is reported on your credit report as a repossession. The auto lease is a financial contract, and when you do not continue making payments, you are breaking this contract with the auto dealer.
Paying the Difference
Another approach that can help salvage your credit is to take the car back and pay what you still owe on the contract. In this situation, the company will make you pay the difference between what the car is worth and what you still owe on the lease. Depending on what type of car you have and when you break the lease, this could be a sum of thousands of dollars. Most consumers who want out of their lease do not have enough money to pay this fee.
Transfer the Lease
Another approach that you could take when you want to get out of a lease is to transfer it to someone else. This is a much less expensive proposition for you as the original lessee. This process will also not damage your credit history. With this approach, you find someone who is willing to take over the lease payments and the car for you. You typically have to pay some fees and transfer charges, but it is a much more attractive option.
Selling the Car
When you have a lease that you no longer want, another option that you could pursue is selling the car. Every lease has a buyout amount that you can pay the dealer and then get out of the contract. If the resale value of the car is somewhat close to this buyout amount, you could sell the car and then pay the difference between the two. When you take this approach, you must have enough to pay the difference or the payments will continue even though you do not have the car.
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