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Advice on Early Termination of a Car Lease - The Bills.com Blog
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Advice on Early Termination of a Car Lease
Monday, Apr 14, 2008
Question: How much would endind my leased car agreement hurt my credit?
Answer: Car lease contracts are purposely written to discourage, even prevent, early termination. To do so usually means you'll pay termination charges and all remaining payments. Therefore, if you lease, you should have a stable lifestyle and a good job situation to minimize the possibility of needing to terminate early. Wanting or needing to end a lease early is the most common problem people have with leasing. Consider the following scenarios:If you decide to turn in the car before the lease is over, in a creditor's eyes, you just did the same thing as defaulting on a loan. Creditors see that on a report and form the same opinion as if you decided
to stop paying your mortgage. Unless you make a deal prior to the termination, it's a voluntary surrender, which equals repossession.
Defaulting on a lease is a breach of contract, and it has adverse effects on your credit report. It's like deciding to pay 75 percent of your debt instead
Defaulting on a lease is a breach of contract, and it has adverse effects on your credit report. It's like deciding to pay 75 percent of your debt instead
of 100 percent. Adding to the financial problems, you're often faced with a stiff early termination fee. You're not only out of a car, but you have less money in your pocket and a damaged credit report.
I hope this information has helped you Find. Learn Save.
Best,
Bill
www.bills.com/blog
I hope this information has helped you Find. Learn Save.
Best,
Bill
www.bills.com/blog
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1. Posted by Misael Ulanday on Thursday 28th January 2010 11:13
I have recently filed Chapter 13. I have a car I am leasing which I can no longer afford to pay for and I would like to turn it in voluntarily. Being that I have filed chapter 13, what can happen if I decide not to pay the remaining of the lease, the penalties, and the over-mileage I have accumulated on the car. Please advice.
2. Posted by Bill on Thursday 28th January 2010 16:50
Contact your bankruptcy attorney and direct your questions to him or her. Specifically, ask if the car lease can be amended to the filing, and what the ramifications are for doing so.