Sometimes leasing a car when you are in dire need is the best possible solution you come up with. Leasing a vehicle allows you to make payments in short intervals until you pay the whole amount that it is worth of. In a car lease, you only pay for the portion of the car’s value that you use. Well, it is possible for you to refinance an auto lease but it is different from refinancing a car loan. When you refinance an auto lease you will have to terminate the current lease you are on so that you can sign up on a new lease on the same car that you have. You can’t alter the finance terms set on the current lease contract without terminating it. If you plan on refinancing your auto lease you should know that ending the previous auto lease will bag up penalty for you to pay.
People often take up vehicles on bad credit and still agree to a lease payment but later they realize that the monthly payment is becoming harder for them to pay this is when auto lease refinancing comes in. You cannot negotiate all the terms and conditions with your broker for the same lease contract as people usually do it in with an auto loan. To change your situation you need to set a new auto leasing arrangement.
If you want to terminate the auto leasing contract and get out of paying for the vehicle entirely then you will have to pay:
- Early Termination Fee
- Depreciation Fee
- Lease Transfer
Here is a list of a few tips that can guide you through the process of auto lease refinancing:
- Before you end up the auto leasing contract make sure you know where you in the contract and what is the prevailing value of that vehicle. So that you know if sticking to the same agreement is better or refinancing that auto lease. Refinancing becomes difficult if you have used up your car for a long time and it is losing its worth. This brings a lot of negative value into the car and your payment to refinance increases substantially.
- Your lease cost will definitely lower down once you refinance but you have to balance it out with the penalty fee that will have to be paid for ending the auto finance contract. Question yourself whether the overall refinance process will cost you more than the original lease commitment you have made.
- You can contact a lease broker who can set you up with the right lease holder who can explain you about all the options open to auto lease refinancing. Lenders actually have a lot of money to refinance your loan but when it comes to refinancing an auto lease they might not be willing on it.
- A lease refinance is often hard to find, you can also refinance your lease with a car refinance loan. This can influence your payment differently; it will give you the benefit of owning your car and no longer having to worry about excess mileage or wear-and-tear charges.
- Sometimes people suffer from a financial setback and the only solution to pay up is to increase the loan term and this can be done by refinancing an auto lease.
- You can stretch out the depreciation value of your vehicle by extending the term of the new leasing contract you make.
- Try to contact the leasing company for refinancing your auto lease not the car manufacturers because your dealing is with the company which is operating independently which is why the car company won’t be of any help.
- To get your lease refinancing plan approved you will have to submit a loan application for the lease-payoff amount. All your previous payments should be up to date to approve your refinancing lease request from the leasing company.
- Credit scores matter when it comes to refinancing an auto lease and if you have a bad credit report you might not secure a refinancing deal because they will assume you might not be able to pay on time.
- As you have already made a down payment for your vehicle on the previous lease contract, when you refinance it make sure this payment is out of the way. You actually don’t have to pay it again. The changes are usually related to the monthly payments.
- When you lease a car you are actually using it on rent and its condition will matter a lot when it comes to refinancing so make sure you consider other issues besides the payment amounts such as mileage, warranties, and maintenance because they can add up to penalties.
- All the documents associated to the purchase and leasing of the vehicle are to be submitted to the dealer and important signatures are to be made. The check goes to the dealer in order to complete the sale. Documents include:
1. a bill of sale
2. a copy of the payoff amount including sales tax
3. an odometer statement
4. payoff mailing address
5. contact person and phone number
- You can also find someone who is willing to take up you lease payment. There are firms that can help you come into contact with people who can pay your refinance auto lease but then you can’t keep your vehicle in possession. This can be your last resort if you can’t pay up under the new lease terms.
- Make sure you have an idea about all the refinancing deals that are circulating so that this time when you draw a new contract you can afford the monthly payment without burdening yourself. Search for the best rates that are being offered.
- Refinancing an auto lease will restrict your chances to lease another vehicle from the same dealers as they know about your negotiated shorter financing terms set in the new contract. Taking up a loan to refinance your auto leasing contract is not a wise way to continue your agreement on the vehicle you have because you might end with a pile of debt that has to be paid to the lender and the dealer of your vehicle.
Financing decisions are always challenging and you need to work out the pros and cons that are attached to before you go ahead with making your choice. Salesmen tend to have the skill of talking you into leasing the car on their terms rather than yours and that moment it seems like a good deal for the customers. Later, they realize that the leasing contract needs changes. Although it becomes difficult but you always have the option to refinance the auto lease. Leasing a vehicle is beneficial when you don’t want to buy the car outright and make large cash payments. You can lease another vehicle when the payment for the old one is done. This way you get to drive cars that might be out of your price range.
People often want to stick to their leasing contracts this is why they refinance it to negotiate new terms and conditions for later. You can also look for alternatives such as considering giving up the leased car rather than refinancing it and getting a new one from a different company. You might even lose a lot of money when you trade it in so be careful. Some lease refinance companies also offer you to purchase the car which is less expensive in the long run when compared to the refinancing process.