How to Opt Out of a Car Lease for a Cheaper Car to Cut Costs
The great 36-month lease deal you signed 12 months ago now seems a bit more than you can currently handle. Getting out of your lease early to get a new vehicle and ultimately bring your payments down can be done, but some sacrifices might have to be made along the way.
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Instructions
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Contact your financial institution and ask them to fax or email you the payoff for you vehicle. The payoff is the amount owed on the car if you were to buy it right then and there. Use the payoff to determine how much of an obligation you still have with your lease.
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Visit your local dealership and explain to them that you want to downsize your current monthly payment and get into something cheaper. Edmunds.com suggests selling your car or trading it to find something less expensive or more suitable for you. The dealer will most likely show you vehicles that have a lower MSRP than your current leased vehicle, or the same model but with less options.
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Determine what your car's current market value is. Use websites like http://www.kbb.com and http://www.autotrader.com to see what your car is selling for in your local market. If you plan to trade your vehicle into a dealership and purchase a new car, find out your vehicle's "Trade In" price. Compare this to what your payoff is and you'll know how "upside down", the amount you owe (your payoff) verses the amount you can sell your car for, you are on your trade.
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Take the negative equity from your current leased vehicle and add it onto the cost of your new car. If the lease specials currently running are more attractive than when you originally leased your vehicle, you might be able to hide all of the negative equity in your new car while still lowering your monthly payment.
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Ask your salesperson if there are any specials running to pay for your remaining lease payments if you purchase a new car from them. Some car manufacturers will pay for a certain number of lease payments, usually three to six months worth, to help you get out of your lease early and into a new car with them.
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Try getting rid of your car all together by having someone take over your lease for you. Both Edmunds.com and LeaseGuide.com recommend this approach, which will end all monthly financial obligations you have with your current lease and leave you free to get a new cheaper car. Try websites such as: http://www.swapalease.com and http://www.leasetrader.com, to find potential buyers for your new lease. Be advised, however that your car dealer must agree to this plan and must be involved in the paperwork.
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Tips & Warnings
Negotiate the price of your car that the dealer is willing to pay you. Remember you don't have to accept their trade in amount, you can always ask for more money to make your deal happen.
Always negotiate the price of the new car that you are interested in as well. This will help carry the burden of any negative equity that you may have in your current lease.
