Leasing has been a rapidly growing trend over the last decade. However, educating the consumer on leasing hasn’t. Here we will break down the turn in process of a lease. We will also cover the popular question “Can You Turn In A Lease Early.” In my 20 years of experience it is in a lessees best interest to to enter the lease with all the facts. Some dealerships will flat out lie about how a lease works to get the quick sale. The fact is you should always enter into a lease expecting to follow the terms exactly. This is not only limited to term, But also the mileage. So do not be led to believe that these two factors are not important. That isn’t to say, turning in your lease early is impossible.
You can turn in a lease early. Fact is, the ability to do so without penalty is determined by the market at that time. When it comes to getting out or your lease early. To simplify, it is similar to trading in a car you still have a loan on. To get out without it costing you the vehicle value has to be higher than the loan/lease balance. This is just an example. In fact, a lease balance is called the lease buyout. A lease buyout usually includes any remaining payments plus the residual value. Commonly, known as the leases guaranteed purchase price.
So what happens if you turn in a lease early? Most leasing companies give the option to turn the lease in early. This is an early termination. An early termination will usually involve some fees and penalties. You can usually get an idea of this amount by contacting the leasing company or the dealer. If you are contacting the leasing company be sure to have your current mileage on hand. So that, they can get you an accurate quote. Depending on the market the early turn in may or may not be your best route.
You will want to look at your options before making this decision. Fortunately, a lease generally gives you a few options to choose from. Most leasing companies have these options.
The walk away option is one option you have when you have went full term. This is where you basically turn in the car and walk away. Of course this option is not relevant if you are trying to get out early. This option is great if you have went full term and the market on the vehicle has went down more than expected. At this point what would be negative equity on a loan is the leasing companies problem. This is one of the reason a lease appeals people that plan on trading on a regular basis. It gives you a real accurate view of what you are going to spend to drive the vehicle for a set period.
The Lease Buyout/Dealer Buyout option is a great option on a lease. This option allows the lease to take advantage of possible equity in the vehicle. Additionally, gives the Lessee the purchase option. This option gives you a price set in stone at the beginning of the lease. This depending on the market value of your vehicle gives you the possibility of having equity in your lease. Keep in mind that the contracted guaranteed purchase price is after all payments are made. You can get an early buyout quote. Don’t be surprised when it is higher than your contracted guaranteed buyout.
Don’t be discouraged by this. Sure the amount is going to be higher. By the same token, the vehicle is going to have less age and most likely less miles than at the originally anticipated turn in time. This in turn, will make your vehicle worth more than it would be at the full term turn in date and mileage. Depending on the market you may be in good shape at this time.
You will want to get both the early termination quote and the buyout quote from your leasing company or dealership. With your buyout in hand you should do a little research and get an idea of what your wholesale value is. The wholesale value is going to be what the value of your vehicle is to a dealership. You can find an idea of this value at a number of different sites. Edmunds is a very reputable site with an easy to use appraisal tool. Check out there site here https://www.edmunds.com/appraisal/. Kelly Blue Book is also a well known resource. They also have an easy to navigate appraisal tool. Check out there site here https://www.kbb.com/whats-my-car-worth/.
Once you have the wholesale value of your vehicle you can compare it to your buyout. If this difference is better than the early term you have a trip to the dealer to make. Best route here would be to call the dealership and make an appointment to have your vehicle appraised for purchase. Let them know upfront you are in a lease and are looking to sell your vehicle to them to get out early if the number is right. If you are in an equity position there is no reason you should not walk away with a check. If you have more than one of that type of franchise dealer in your area you can shop around for the best offer.
Some Leasing companies give you additional options. These options may not apply to you and your contract. If the above options do not work for you then you may explore these other options for getting our of your obligation early. You may want to contact your leasing company and see if these options apply to you.
Transferring a lease may be the perfect option if you have someone wanting to take over the remainder of your obligation. If your leasing company permits this. You will simply have to find a credit worthy person that is interested in finishing you lease out. Weather it is a family member, friend, co-worker or a complete stranger. This may be the perfect fit for you and the other party. Sometimes finding the right person for this arrangement can be tough to find. There are a number of sites you can use for this as well. Sites such as www.leasetrader.com and www.swapalease.com are known to help with this. Although I personally have no experience with these sites they seem to be popular on the web.
With your buyout and an idea of what the market is you may decide to sell your vehicle. Weather it is a family member, close friend or a complete stranger you may have the option to sell your vehicle. Your leasing company may make this an option of not. It would be a good idea to contact them and make sure this is an option.
A dealership might be the easier route when selling your vehicle. They generally have great experience in dealing with the leasing companies. They can also make it a lot easier than selling to an individual. Because of, the fact they can generally EFT the funds to the leasing company and have your vehicle paid of in the same day. If you are interested in this. I would reach out to Gaddis Automotive Inc. This is a Chrysler, Dodge, Jeep and Ram dealer in Indiana. They purchase leased vehicles from all over the country. They can do all of this over e-mail and via Phone. The Sales Manger email is firstname.lastname@example.org. if he can help he will make the process super simple.
Some of the times this option can turn into extra money in your pocket. Sam at Gaddis Automotive appreciates the opportunity to purchase your vehicle and doesn’t mind righting an extra check to the owner if the equity is there.
Sometimes because of the market and personal situations Turning the lease in early is unavoidable. So we are going to walk you through How To Turn In A Lease Early. This process is not hard but knowing how to take the right steps at the right time can hopefully make turning in a lease early less of a pain.
You will want to call the dealership in which you want to turn the leased vehicle into. You will most likely want to speak with the Finance Manager or the Sales manager. You will want to explain the situation and set a time to return the lease. They will generally be glad you called in advance and this will save you time once you arrive. Depending on the state you may want to retrieve your plate and registration at this time.
Once you have turned in the leased vehicle you will want to contact the leasing company and let them know you have turned the vehicle in at the dealership. The leasing company will usually send someone to the dealer for an inspection and the vehicle will go to auction. The Leasing company will eventually send you a end of lease bill. This bill will most likely include some of your remaining payments and any excessive wear on the vehicle at the time of return.
How and will turning in a lease early affect my credit? This is a good concern. If left unchecked turning in a lease early can affect your credit negatively. Once you receive the final statement there will need to be some sort of arrangement for payment made. Usually the leasing company wants the amount paid in full. In some situations they will make payment arrangements. If this bill goes unpaid it will effect your credit similar to late payments or even a repossession. Keeping in contact with the leasing company is very important at this point. You need to know if they intend on negatively reporting to the credit bureau. You will need to head them off and try and prevent any negative reports if possible.
Sometimes Extending the warranty on your leased vehicle is a good idea. If you are in a lease that is longer than 36 months or over 36,000 total miles than there is a good chance you are going to run out of warranty before the end of the lease. This usually isn’t in the plan when going into the lease. Seeing how part of leasing is staying in a newer vehicle. There is a answer to this. You can look into extending the warranty on your leased vehicle. There are generally short term extensions available for situations like this.
Most manufactures have some sort of factory backed company to cover there vehicle. GM has General Motors Protection Plans for all there brands. FCA (Fiat Chrysler America) has a long list of Brands to cover in North America. Mopar Vehicle Protection covers all Chrysler, Dodge, Jeep, Ram, Fiat and Alfa Romeo brand vehicles in North America. Mopar also offers warranty on just about any brand vehicle. They are also recognized at just about any type of franchise dealership in the country. You may wonder how does an Alfa Romeo Extended Warranty fall under Mopar vehicle protection? The fact is Fiat Chrysler America owns Alfa Romeo. When Fiat acquired Chrysler in the making of FCA they decided to use Mopar’s 40 plus years of experience with Manufacturer Warranties to help take care of there other brands.
There Are Lots of different options when turning in your lease early. We hope we shined some light on the fact you do have options.