| Returning my auto Lease vs. Transferring my car lease |
Transfer your car lease Pros & Cons Your car loan or lease payment is busting your budget every single month and you just can't take it anymore. You want out. What should you do? Start by taking a deep breath. Yes, you've put yourself in a difficult financial situation, but there are ways out. You can undo a bad auto financing decision. But you'll need to tread carefully if you want to minimize the hits to your wallet and your credit rating. Because you don't own the car, you have far fewer options for cutting short a bad lease deal. A lease is really nothing more than long-term rent. You have no asset you can sell. And if you turn the car in early to the leasing company, you'll be on the hook for some serious cash. You may be required to make all the remaining lease payments, even though you're returning the car. Some leasing companies charge an early lease termination fee and disposal fee as well. Leasing companies come up with outrageous formulas to charge people many thousands of dollars. A final option is to transfer your lease to someone else, but this won't be cheap or risk-free either. Online sites such as Tradealease.com help leasing customers connect with drivers willing to take over their leases.
Trading your vehicle at the dealership may be quick and easy but it
may not always be painless. The upside of trading is that the dealer
does all the paperwork. After settling on an acceptable price, all you
have to do is sign the vehicle lease over and be done with it. The price
you pay for the convenience of being relieved of your car lease may
be less cash in your pocket than if you sold it yourself. Many people
expect the dealer to give them the retail value of their vehicle and
are often disappointed by the offer presented to them. Unless the vehicle
you are trading is in high demand or of special interest to the dealer,
its appraised value is likely to be closer to the Blue Book Trade-In
value.
To avoid any surprises, be sure to get the Blue Book Trade-In value
for your vehicle before you go the dealership. This number—based
on the condition of your vehicle—is a more accurate representation
of what you may expect to be offered. Keep in mind, the dealer must
assume the responsibility for preparing your trade in car for resale.
This process may include mechanical and smog inspections, repairs to
make the car ready for sale and warranting the vehicle for the new owner.
Of course, he may also sell the car to a wholesaler, in which case he
makes little or no profit on the car.
Trading can also help if you are upside down on your old vehicle's
loan. The dealer can roll the remaining balance of your current vehicle's
loan into the new loan, thus allowing you to trade in your vehicle without
having to shell-out additional cash. While this is not advisable-because
it inflates the loan beyond the new vehicle's actual value-it is an
option for those who must get out of their current vehicle. Selling — Pros & Cons
Selling your car on your own can be profitable, but requires patience
and good judgment. First, you will need to determine a fair asking price.
Be aware, you will have to absorb the cost of making the car presentable
and passing any required state inspections or emissions tests. You must
also figure what your time is worth, because you will need to be available
to answer questions and make appointments for people to see the vehicle
and take it for test drives.
Another downside to selling your car yourself is that you may be put
in contact with unsavory individuals, or people with whom you just don't
feel comfortable. You need to have a good feel for people and have strong
negotiation skills. If you do decide to sell your car yourself, be sure
to put everything in writing and request payment in the form of a cashier's
check. Personal checks can bounce and cash in large quantities is not
wise to carry on your person.
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