So you leased a car, and three years seemed like such an easy commitment to make: it was exactly the car you wanted, and a monthly payment you could afford.
But life happens. Things change. Sometimes within the timeframe of a lease.
Maybe you leased your two-seater dream car, but now you have a baby on the way. Or you fell in love with a Great Dane at the shelter. Or your company is transferring you out of the country.
One question we get a lot here at TRED is “can I get out of a car lease?”
The answer is: yes, absolutely! And we can help.
When it comes to getting out of a lease, there are a few options:
Return the car early and pay penalties
This isn’t really an option, because it’s a very bad deal. You end up paying huge early termination fees, all the depreciation for the full term of your lease, plus the difference between your buyout price and the “realized value,” which is whatever the leasing company sells the car for. They’ll wholesale it, at auction, which means the “realized value” will be the lowest possible price, so the amount you’ll have to pay will be staggeringly high. Don’t do it.
Transfer the lease to someone else
This is a lot like subletting a housing lease. If you transfer the lease to someone, they take over the payments for the remainder of the lease term. But there’s a big problem with this: leasing companies will typically let you transfer the contract to another person, but not completely—in most cases you’re still ultimately liable for the lease. That means that if the person you transferred it to stops paying, or if they damage, destroy, or disappear with the car, you’re on the hook. Which is an awfully big risk to take.
Buy out the lease, and sell the car
A lot of people don’t know that you can actually buy out a lease at any time. Each month, you can request your buyout amount—the current purchase price to buy your leased car—from your leasing company.
This is the best option, because then you can sell the car and completely transfer the title and all liability to the new buyer. But this option can pose its own challenges:
Unless you have the cash on hand to buy out the lease before you sell the car, you won’t be able to provide the title to your buyer right away. You’ll need to collect payment from the buyer, then send it to the lienholder (the leasing company.) Then you have to wait for them to send you the title. Which usually takes 1-3 weeks, sometimes longer than that.
This makes selling really difficult, because a buyer who’s given you a large sum of money isn’t going to be very happy waiting weeks to get the title (and the car. Because you can’t properly transfer liability without the title, so handing over the keys early is not a good idea.)
This is where TRED can help!
We make it easy and safe for you to get out of your lease
We’ll confirm your buyout price with your leasing company, and we’ll net that out of your sale price when your car sells. If your buyout amount is less than your sale price, we’ll repay the leasing company and cut you a check for the difference. If your lease buyout is higher than the selling price for your car, then you’ll need to agree in advance to pay your leasing company the difference between the selling price and your lease buyout when your car sells.
When you sell your leased car with TRED, there’s no risk for your buyer at all. From their perspective, the experience is exactly the same as buying any other car, leased or not. Which is a great advantage over trying to sell it on your own.
A traditional dealer can also handle the lease buyout process if you sell or trade it in to them, but they’ll give you a far lower price, that will undoubtedly be significantly less than your lease buyout price.
The TRED advantage is that we can handle the lease buyout process just as easily as any dealer, but we also find you a trusted buyer—so you can sell your car as a private party (much higher than dealer trade-in) price.