Breaking a Car Lease: Break a Lease without Big Bucks!

Having a new baby, moving overseas, financial problems... there are plenty of reasons why you might need to break a car lease. But the financial repercussions can be severe, depending on the fine print of the lease agreement and how you go about it.

Signers on a lease often think that leasing a car is a lot like renting a car. Nothing could be further from the truth. In renting a car, you merely must return the car by the time and date agreed upon and pay the one time rental fee. Renting is always for a very short term. Leasing is generally for 2 or 3 years. With leasing there is a legal contract to make the lease payments for the life of the lease. When it comes to breaking a car lease there are typically some stiff penalties in the fine print of the lease agreement. The leasing company generally will require you to either pay off the balance of all the lease payments or purchase the car. Neither of these options are very appealing.

One relatively inexpensive option for breaking a car lease is to transfer the lease to someone else. First, check if your lease agreement prohibits transfers. If it says nothing against transfers, this is a viable option for you.

To transfer the lease, you need to find someone who happens to be looking for a vehicle like the one you have and who wants to take over a lease. In the past that may have been a bit of a challenge. But, now there are companies that specialize in trading leases. The lease trading company will charge a nominal fee and there may be other fees involved from your bank or the leasing company. However, these fees add up to be far less than what you would end up paying when just breaking a car lease. Check out Swapalease.com for more information.

If you're interested in getting another car by the same maker, you might want to watch dealership promotions. Sometimes, when sales are slow, they'll run lease trade in or lease trade up programs. This allows you to turn in your old lease without paying the balance as long as you lease a new car.

The major drawback to this is that you must lease another car from that manufacturer. Also, make sure to check the terms of your new lease to make sure you're not getting hit with extra charges.

Negotiation can be both difficult and frightening for many people, but a skillful negotiation can drastically reduce your cost in breaking a lease or in buying a new car. However, there is a book by a former car salesman who reveals exactly how the car dealership works. It reveals how to maximize your negotiating to save you the most money possible. Interested? Check out The Car Dealer's Playbook for more information.