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TITLE AND SUBJECT OF ARTICLE
How to avoid extra
costs at the end of your lease
$250 to dispose of your vehicle, $1000 for
extra miles you put on the clock and $200 to replace the
light bulb and the worn tyres—lease agents constantly
nickel-and-dime consumers when their lease runs out.
Here’s a rundown of what can trigger those fees, and
some steps to take in self-defense.
Disposition fee:
leasing companies charge you if you choose not to buy
the vehicle at the end of your lease. This fee is set as
compensation for the expenses of selling, or otherwise
disposing of the vehicle. It typically includes
administrative charges; the dealer’s cost to prepare the
car for resale and any other penalties. Make sure this
fee is stated clearly in the contract and is agreeable
by you before signing on the dotted line. At lease-end,
you are left in no position to negotiate as the dealer
can apply your refundable security deposit towards this
fee.
Excess mileage charges: Almost all leasing
companies will charge a premium for each mile over the
agreed upon mileage stated in your contract. This
penalty can be as high as 25 cents per mile and can add
up quickly. To avoid the risk of running thousands of
dollars in excess mileage penalties at the end of your
lease, always check the “per mile” charges in your
contract and be realistic about your mileage before you
sign any contract. If you think the limit is unrealistic
given your commutation needs, then negotiate with the
dealer to get a higher mileage or contract for
additional miles.
Excess tear-and-wear charges:
Another potential cost at the end of the lease is any
incidental damage done to the car during the lease. This
is
How to get out of a
lease before your contract expires
When your lease is up,
you can simply turn in the keys and lease another car or
buy a new one. But how about getting out before the
lease ends?
Maybe you can’t afford the sky-high
payments on that silky Jaguar JX V6 model anymore or
you’ve just had a baby and you need a larger and more
spacious vehicle?
Unfortunately getting out of a
lease is not as easy as getting in! A leasing contract
is difficult and expensive to terminate early. Simply
turning in the keys and walking away from a lease can
result in stiff penalties. You credit could be ruined
and you could even get sued for breach of contract.
It’s not all doom and gloom though. Actually, there
is a number of options available to you.
You can sell
the car yourself and pay off the bank. This can be cost
effective if the market value of the car is close to the
buy-out number.
Do not hesitate to exercise this
option even at a loss if it happens to be lower than the
termination fee.
Your best option, though, is to
transfer your lease for someone who would “assume it”
and take it off your hands. There is a whole set of
potential buyers looking for short-term leases without
all the hassle and extra costs. Check with family and
friends or use the services of lease-assumption
websites, like swapalease.com, to list your car. Make
sure you check the credit worthiness of the new lessee
and provide the car in good condition.
How To Avoid Extra
Costs At The End Of Your Lease
$250 to dispose of your vehicle, $1000 for
extra miles you put on the clock and $200 to replace the
light bulb and the worn tyres—lease agents constantly
nickel-and-dime consumers when their lease runs out.
Here’s a rundown of what can trigger those fees, and
some steps to take in self-defense.
Disposition
fee: leasing companies charge you if you choose not to
buy the vehicle at the end of your lease. This fee is
set as compensation for the expenses of selling, or
otherwis...
car, auto, automotive, car rental,
auto lease
$250 to dispose of your vehicle, $1000
for extra miles you put on the clock and $200 to replace
the light bulb and the worn tyres—lease agents
constantly nickel-and-dime consumers when their lease
runs out. Here’s a rundown of what can trigger those
fees, and some steps to take in self-defense.
Disposition fee: leasing companies charge you if you
choose not to buy the vehicle at the end of your lease.
This fee is set as compensation for the expenses of
selling, or otherwise disposing of the vehicle. It
typically includes administrative charges; the dealer’s
cost to prepare the car for resale and any other
penalties. Make sure this fee is stated clearly in the
contract and is agreeable by you before signing on the
dotted line. At lease-end, you are left in no position
to negotiate as the dealer can apply your refundable
security deposit towards this fee.
Excess
mileage charges: Almost all leasing companies will
charge a premium for each mile over the agreed upon
mileage stated in your contract. This penalty can be as
high as 25 cents per mile and can add up quickly. To
avoid the risk of running thousands of dollars in excess
mileage penalties at the end of your lease, always check
the “per mile” charges in your contract and be realistic
about your mileage before you sign any contract. If you
think the limit is unrealistic given your commutation
needs, then negotiate with the dealer to get a higher
mileage or contract for additional miles.
Excess
tear-and-wear charges: Another potential cost at the end
of the lease is any incidental damage done to the car
during the lease. This is deemed any excessive damage
done to the normal tear and wear of the vehicle. Notice
the use of the terms “deemed”, “excessive” and “normal”.
There is no standard formula to define what’s
“excessive” and “normal” and it’s up to the leasing
company to assess – or deem – the damage and determine
what they are going to charge. This leaves you at the
mercy of unscrupulous leasing agents who set stringent
tear-and-wear standards. Make sure you read the
description of these standards, understand them and
agree to them. If your leased vehicle is damaged prior
to the end of the lease, you may find it cheaper to
repair the damage yourself than pay the excessive
charges of the leasing agent. In the event of a dispute
over the charges at the end of your lease, get an
independent third party to do a professional appraisal
detailing the amount required to repair any damaged
parts or the amount by which tear-and-wear reduces the
value of the vehicle.