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Living on a Budget
by Sid Kirchheimer, AARP Bulletin, - August 19, 2008
Want a different set of wheels but worried that breaking your existing car lease will drive you to the poorhouse? After all, if you terminate the contract early without buying the vehicle, you may be hit with thousands of dollars in fees, which can include having to pay off the balance, additional interest and other penalties.
There may be a less expensive route if you’re hankering for a new ride: For a bottom-line cost of about $300 or less, lease-swapping services match car lease sellers with buyers and allow those snarled in a multi-year car lease to steer clear of early termination costs.
For your money, the matchmaking websites allow you to post a photo and details of your car and some do credit history checks of shoppers. When an agreement is reached between buyer and seller, the site helps with the transfer paperwork. However, some leasing companies may charge their own leasing transfer fees. Using websites such as LeaseTrader, SwapALease or AutoLeaseBreakers, you need to check your current leasing contract.
“Some leasing companies prohibit the transfer the lease,” says Elaine Litwer of the National Vehicle Leasing Association, a trade group for car leasing companies (members include LeaseTrader and SwapALease). Also, if the new holder of the lease discontinues payments, you may be responsible for continuing the monthly payments. These clauses should be spelled out in your original lease agreement, she says.
Sid Kirchheimer is the author of Scam-Proof Your Life (AARP Books/Sterling).
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