Early Lease Termination

[Bumper]

I'm looking for some advice, I have a 2006 Range Rover HSE that I leased in January of 2006 and have 33 months left. Due to a job change I will be moving to New York City and can not keep the car as my garage will not accept SUVs. I called the dealer and he told me that I could pay off all of the remaining payments and turn in the vehicle (thanks pal!) or get someone to take over the lease. I have listed the vehicle on leasetrader.com but have not had much luck.

Does anyone have any good ideas or advice how to get out of a lease early with out getting financially crushed?

Any help or advice would be appreceiated!

[Steve Carlton]

Your best case scenario is to payoff the lease balance vs making the remaining payments. Call the lessor to make sure you can pay it off this early and get the amount. You should be able to get your next buyer or his lender to pay it on your behalf without any tax becoming due to you. If you sell it yourself vs to a dealer, you'll get a few thousand extra to minimize the damage.

[DonDavis]

Bumper,
Sorry to hear of your situation. There's only one way out, pay off the current balance. To do that you will need to find a buyer for it at the current market value and YOU pay the difference out of your pocket to free up the title.

Calling "kaisen"!! Where are you? Give the man some "fleece" advice, "kaisen".

Leases suck.

[Steve Carlton]

Funny how you guys blame leases for negative equity situations, when the reason is little/no principal has been paid in the first place. The car is worth the same regardless of how it's financed. Bumper would have been out all of the sales tax had he bought it in addition to the principal loss. With a lease, he only paid the tax on his initial downpayment (if any) plus the tax on his 6 payments.

[kaisen]

Sure Don, I'm here....

You might be thankful you leased. Steve is correct, the car is worth the same regardless of how you financed it.

Five-months-in there will be no real difference between a buy and a lease in terms of how much of your payments have gone to principle. I'm sure you've paid a little less in payments, but it's still immaterial.

The difference in most states is in how sales tax was calculated. On a PURCHASE, most states calculate tax based on your OWNERSHIP of an asset: ex. 6.5% sales tax on the purchase price, due on delivery. On a $70,000 RR that would be $4550. You owe $74550 when you leave. On a LEASE, most states calculate tax based on your USE of the car, based upon payment: ex. 6.5% of $900 payment is $58.50, due each month it is used. So you send in $958.50 including tax. You owe $70,000 when you leave.

So.... you might owe LESS on your leased vehicle 5 months in than you would on one you bought. In our example, you may owe $5000 less!

At this point, it works exactly the same as if you had a loan. Call the bank (lease company) and ask for today's payoff/ balance. Then figure out what it is truly worth, cash value, if you sell it yourself or if you sell it to the dealer. You need to cover the difference. It might hurt.

Honestly, you should get $61,000-$64000 or so from a dealer. You may be able to sell it on your own for $65,000. Most people in the market for a $65,000 car won't buy one they see parked in your lawn with a for sale sign.

I would get a few firm bids from dealers and sell it to the highest.

Leases are just financial instruments. They work very well for what they are intended for. In many cases they are 'better' than the alternatives.

'Buy' what appreciates, 'Rent' (or lease) what depreciates.

I'm sorry to hear that you are in a situation to find out just how hard that depreciation hits.

E

[kaisen]

Bumper-

Why don't you tell us about the vehicle, the lease terms, your payment (before tax), and what incentive you are offering if someone assumes your lease. There are several Pelicans that have been looking for good tow vehicles. Who knows?

E

[1973911s]

Why don't you post it on swapalease.com

Michael

[DonDavis]

Originally posted by kaisen
Sure Don, I'm here....

And just to be certain, I really meant this in a friendly way.
E, it's not my intention to attack you. I respect your opinion.

[91S2]

leave it parked with the keys inside and hope somebody steals it.

[DonDavis]

Originally posted by 91S2
leave it parked with the keys inside and hope somebody steals it.

Facilitating Insurance fraud.