Advice on Early Termination of a Car Lease
How much would ending my leased car agreement hurt my credit?
How much would endind my leased car agreement hurt my credit?
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 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.
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