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Is It A Viable Option To Exit A Vehicle Lease Early?

by: Galway
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Car Leasing is a great way to run a vehicle. Whether you want to run one through a business or personally as a private individual it is worth considering. It's a simple no hassle way of doing things, you simply put a small deposit down and lease the vehicle over a period ranging from 12 - 60 months and when the lease comes to an end you just simply hand the vehicle back and start a fresh! That is providing the car is in a 'fair wear and tear' condition and you haven't exceeded the contract mileage.

We are often asked, what happens if my circumstances change? You may lose your job there may be new additions or a death in the family or you may just be stretched due to higher mortgage re payments which is a worry for a big part of the population right now!

Getting out of a lease is fairly difficult and depending on what stage you are at in the lease it can also be very expensive! As a rule of thumb Leasing companies will generally charge circa 50 percent of all outstanding monthly lease payments to terminate the vehicle early.

However, nowadays most lease companies will allow you to 'transfer' your lease over to another individual or company without financial penalty. Providing the criteria of the new 'Lessee' meets the criteria of the lease companies underwriting department. However some lease companies do not allow 'lease trading' if this is allowed the lease company will in most cases charge a fee to administer the paperwork for the lease change over.

Some lease companies may refuse to take the original customers name off the contract, circa 80% of lease companies allow transfers with a new name on the contract. About 10 percent allow but won't remove the original name and a further 10 percent won't transfer at all.

Be very wary transferring a lease if your name is retained on the contract as this may then leave you liable to all sorts of sticky situations. For instance you may become responsible for the excess mileage fees and vehicle reconditioning bills at the end of the contract. Potentially, and even worse, you may become liable if the 'new party' defaults on the monthly payments.

If you decide that transferring the lease is a viable way out of your contract then there are various ways you can find a new 'Lessee' to take on your lease. You can either pay an intermediary to do this for you which on average may cost you the equivalent to a monthly payment of your contract or there are web sites available where you can advertise your lease vehicle to a targeted audience from anywhere between 20 pounds and 50 pounds.

Finally the answer is yes you can get yourself out of a lease without the expensive early termination costs. But bear in mind you will need to find a new 'Lessee' and be very careful. Our advice would be only transfer if you are 100% sure your name will be removed from the contract.

About the Author

Shaun Parker has been at the forefront of the car hire and contract hire industry for several years. He has arranged finance for hundreds of satisfied customers.

Is It A Viable Option To Exit A Vehicle Lease Early?

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