How to Get Rid of a Leased Vehicle

If you want a new car but can't afford a high payment, a lease might be the solution. Leasing a car is cheaper than buying one. You agree to keep the car for a specific time frame, and at the end of the lease, you return the vehicle to the dealership. Because leases are legal binding contracts, returning the vehicle early results in additional fees. However, some leasers can no longer afford their payments, and they need to get rid of the car. Fortunately, there are solutions to this common problem.

Difficulty: Moderate

Instructions

1. Sell the car. If you can no longer afford the monthly lease payments, sell the car and use the proceeds to pay off the balance. Contact the leasing company and explain your plans to sell the car. Ask for the pay-off balance. Place classified ads in your local newspaper, and make sure the sale price is enough to pay off the car.

2. Transfer the lease to a trusted friend or relative. He becomes responsible for the vehicle and the monthly payments. Contact your leasing company beforehand to see whether they allow transfers.

3. Return the car. If you have the extra income, you can return the vehicle to the dealership early and pay off the remaining balance. You'll have to pay an early termination fee, but you'll avoid a negative mark on your credit rating.

4. As a last resort, you can return the vehicle to the dealership and simply walk away without paying the remaining balance. The leasing company will report "breach of contract" to the credit bureaus, and you can expect your credit score to decrease.

Resources

• LeaseGuide.com
• Federal Reserve: Keys to Vehicle Leasing