| Car lease / lease assumption / transfer of equity |
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Carguy
First Time Poster
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| Car lease / lease assumption / transfer of equity |
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Hi everyone,
I'm new to this forum so please bear with me 
To make a long story short I find myself wanting to get rid of a leased car. It's a pretty typical situation: When I leased the car 2 years ago everything looked great. Circumstances changed and now I want to free up money in my monthly budget and it would be ideal if I can get rid of the car.
(BTW: I'm located in California)
It's always been my opinion that car leases are fine if you keep the car until the end of the lease and if the car is in good shape at that point. -I have leased many cars and it's usually worked out well.
So: I have done a bit of research and it seems that I am left with 3 options:
1: Do a voluntary early termination. The dealer will then sell the car at auction and I will be liable for the difference between the lease buyout and the money the sale of the car fetched at auction
2: Do a lease transfer / transfer of equity. My leasing company (Ford credit) does permit the transfer of the lease to someone else.
3: Keep the car for the remainder of the lease: 10 months.
Does anyone here have experience with anything like option 1 or 2?
Option 1 seems very easy and straight forward but also risky: There is no way I can predict what the dealer might be able to sell the car for at auction.
Option 2 seems great if I could find someone who would want the car. If I did a transfer of equity, would I still be liable if the new lessee didn't pay as they are supposed to?
Bottom line is, it looks like I *can* keep the car and be somewhat ok financially, but I'd much prefer to be rid of the strain on my budget.
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Thu May 31, 2012 10:41 pm |
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oldguy
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quote:
It's a pretty typical situation: When I leased the car 2 years ago everything looked great. Circumstances changed and now I want to free up money in my monthly budget and it would be ideal if I can get rid of the car.
Looks like keeping it another 10 months is best - otherwise the loss at auction will be a major financial setback - and an equity transfer will backfire and kill your credit (it's about the same as co-signing for someone)..
But you need to do some math and some long term planning - leasing is the most expensive way to pay for car ownership. In fact, if you have leased 'many cars', that is part of the reason for your financial problems.
Eg, when you buy a car and utilize it for 200,000 miles the ownership costs about $2000 per year. When you lease you only utilize the newest 50,000 miles and pass it to someone else - it costs about $4000 per year. That extra $2000/yr, when invested, is about $800,000 over 35 years of driving - and $1.6M if you have 2 cars in the family. That's why millionaires drive older cars. 
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Fri Jun 01, 2012 1:10 am |
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littleroc02us
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I was in your situation back in 2005ish, where I was stupid and leased a 2001 Dodge Ram and the payments were to high for my budget. To answer your questions if you voluntarily turn the vehicle it is true that they will sell it at an auction for much less then what is owed and then they will sue you for the difference so I would have cash ready for the approximate difference.
If you go with option #2 you'd have to be a pretty good salesman to find someone to take over your contract so unless you know of someone I'd rule this one out.
The third option you mentioned is to wait it out, which if you can make the payments and there isn't to much time left then wait it out.
You did forget another option, which is the buy out. This is what I did but still regret it because we did the buyout for like 24k which now that I look back on it was a stupid mistake. So I consider the whole experience what is called a stupid tax and will never lease again and I will always pay cash for my cars from now on.
Risk comes from not knowing what you're doing. (Warren Buffet)
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Mon Jun 04, 2012 8:36 pm |
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Allen0
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Today i want to ask something relating to your topic which is that My personal car lease finished last week although i still have the car. What should I do? Nobody from the leasing or finance company has called and they have my correct mobile number and address. The dealership that delivered the car is some 300 miles away. Any suggestions??????
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Wed Jan 09, 2013 9:41 am |
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littleroc02us
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Cash: $ 384.35
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quote:
Originally posted by Allen0
Today i want to ask something relating to your topic which is that My personal car lease finished last week although i still have the car. What should I do? Nobody from the leasing or finance company has called and they have my correct mobile number and address. The dealership that delivered the car is some 300 miles away. Any suggestions??????
You must have paper work from the sale, so it is your responsibility to call them and arrange for the proper termination of the lease.
Risk comes from not knowing what you're doing. (Warren Buffet)
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Wed Jan 09, 2013 8:14 pm |
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Paultayloor
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Looks like keeping it another 10 months is best - otherwise the loss at auction will be a major financial setback - and an equity transfer will backfire and kill your credit.
guildford to gatwick
Last edited by Paultayloor on Sat Apr 18, 2015 11:51 am; edited 2 times in total |
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Fri Apr 17, 2015 6:15 am |
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Offshore-Wealth.com
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Having owned a leasing and finance company years ago, the issues you describe are not new, and whenever you want to terminate a lease early, you will lose thousands. Never bail out of a lease at your dealer, you will be subject to a double hit, first, they use wholesale figures for your car, essentially try to steal it for as little as possible, which leaves you with a shortfall based on average lease end values, so you lose twice because a lease termination will involve remaining payments less residual, so not a pretty scenario.
What you can do is try and sell your car yourself at closer to retail, and if you have a vehicle which may have a higher value than the wholesale price dealer will give you, then you wills ave a couple thousand dollars on average which is better than losing an extra couple thousand, as example. The other option is to find someone who will assume you lease, but their credit has to be sparkling for you will still be on the hook if they default in most leases. You are the primary leasee, the person assuming lease is second on lease, so the person who assumes lease better be quallified.
There are companies you can list your lease assumption with, they take a fee, they advertise your lease, and whether you want money down or not, so you can calculate what you are willing to lose when posting your lease to others. This may work best given you have only 10 months left. The people I use to have assume leases were people on temporary job assignments as example, so a short term lease is attractive to them since no leases are available for short term, and rentals are much more expensive, so there is a market for assumption of short term leases, so check it out, but never let dealer terminate lease for you, bad, bad, bad move, and never try to roll lose into another new lease or you will be buried in reverse equity situation worse than the first lease. Leases only work out when they go full term, PERIOD.
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Fri Apr 17, 2015 9:35 pm |
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Benstoke
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It's always been my opinion that car leases are fine if you keep the car until the end of the lease and if the car is in good shape at that point. -I have leased many cars and it's usually worked out well. HP2-H89 Braindumps
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Mon Sep 02, 2019 8:06 am |
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elenajames
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A transfer of equity can be a complicated process. It's important to have an experienced solicitor on your side who knows all about these matters! I've seen first-hand how hard it is for people without legal representation and am here with good news: many firms offers affordable services so that no matter what stage you're at in the transaction or budget limitations, we'll find common ground between us as quickly possible before taking care any other tasks needed.
If you want to know more about how to calculate owner's equity, you can check out this formula:
Owner’s Equity = Assets - Liabilities
Where
Assets = 1,500,000 + $1,000,000 + $800,000 + $400,000 = $3,700,000
Liabilities = $500,000 + $700,000 + $700,000 = $1,900,000
Sara’s Equity = $3,700,000 - $1,900,000 = $1,800,000
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Tue Jan 18, 2022 8:49 am |
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