Mr.Meme Yo Girl

Hey all,

So just wanna start off by clarifying that I do not personally want to get rid of my S4, its a great car and I do like it alot, but unfortunately due to some unexpected and sudden changes in my life I may have to get rid of it ASAP due to possible financial reason I have to reevaluate where my money goes and frankly I really don't have a NEED for this car, it was more of a want (as I'm sure it was for most of us lol) plus I'm driving around a lot more now for work so I'm without a doubt going to go over my allotted lease mileage, which is another reason I want to get out of it and finance a car. Which leads me to my question to you all, does anyone have any experience or knowledge of, I guess, the "best way" to get out a lease early? I've had the car for about 7 months (got it Sept of 2017) and am just looking for the most cost efficient way of doing this. I was looking at those lease swap website and I'm a little wary of how good they work. So if anyone has any suggestions please do tell. Thank!

uberwgn

Never easy to get out of such a fresh lease. The lease swapping is really the only thing that comes to mind unless you can write a check for the balance of remaining pmts, etc.

superswiss

Who are you leasing through? AFS or another bank? If you are leasing through AFS, you can forget about lease swapping. AFS is one of the financial institutions which doesn't release the original lessee from liability. So you gonna be on the hook if the person who takes over your lease doesn't make the payments or returns the car with issues and doesn't pay up. If you are leasing through another bank, check if they release you from liability. Other than lease swapping your options are pretty much limited to buying the car and then selling it. In some states you have a window during which you can buy and sell the car w/o having to pay taxes. Here in CA it's a 10 day window and you have to handle the transaction properly to qualify. If your state doesn't have such a window or you miss it, you gonna be on the hook for sales taxes. You are also most likely gonna be under water on your lease this early, so you'll lose money in this transaction. The last option is trading the car for another car. In this case the dealership will get you out of the lease and into a new car. You won't have to pay taxes, but if you are upside down you'll lose money in this transaction, too.

mplsbrian

Well, since a lease is a legally binding contract, you unfortunately have few good options. First things first is to read your lease and see what it allows/forbids as some of these options might not be possible.

1. A lease swap is probably going to be the cheapest/easiest way out if your lease allows it and you can find a good match. Typically, you pay a fee to post an ad with your car and your lease terms. If you can find someone who is interested the website you’ve used helps you deal with the legal aspects of it. You will want to first check your lease to see if it allows someone to take over your car (I don't lease, I buy, so I don't know what is normal for Audi) or whether it require the original lease holder (you) to retain some liability and allow the bank to come after you if the new lease holder defaults. So there could be some risk, but if this strategy works you might be able to get out of your lease for little more than the website's fee.
2. You could buy out your lease early to release the title, and then turn around and sell the vehicle. Just 7 months into a lease though you're going to need a pretty hefty sum of cash to do this.
3. You could see if the dealer wants to buy it off you (or take it as a trade-in). On paper is handled similarly to option 2 except the dealer fronts the cash.
4. You could try to sell it privately and use the money to pay off the lease, but buyers almost always expect title-in-hand at time of sale which you can't turn over until all outstanding lease payments are made, so there is a bit of Mickey Mousing required which will turn away lots of buyers and is therefore usually almost impossible to do.
5. You could turn your lease in early. Be ready to pay through the nose in fees and penalties.
6. Last and worst option, you could contact your bank and explain that you intend to stop paying your lease, and arrange to do a voluntary repossession. This will annihilate your credit in the short term, and while it will recover some over time the repo will show up on your credit report for 7 years and you'll probably have a hard time getting a loan for anything at something even resembling a good interest rate for a while. Probably forget about buying a house, for example.

There may be other options but these are the main ones. Best of luck my friend!

Mr.Meme Yo Girl

Well my lease is thru Volkswagen Credit not AFS (not sure if they're the same) but yeah I figured this early into a lease it's going to be beeotch to get out of it. Knock on wood, its not a make or break situation for me but I'm a relatively reasonable and logical guy and I know it'll help getting into something thats hitting the wallet less but I mostly just wanted to get an idea of what possible ways I can, maybe down the line, get out of it early. I know 7 months in I'm upside down on it, thats usually the case anyway, but maybe the lease swapping may be the best way. From what I read on swapalease.com, Volkswagen Credit does allow swapping (ill double check with my lease contract) as long as its not within the last 12 months of the lease, as well they do hold the original lessee responsible for the car which I obviously dont want to be liable for after I swap out. But lets see what happens. I appreciate the help guys, ill keep your suggestions in mind. Truthfully I might just end up not doing it cause it just seems like too much of a headache lol

mplsbrian

Technically, you are always upside down on a lease, except in rare instances where the car happens to be worth more than what the actuaries who set the residuals predicted they would be at lease-end. For example if your 36mo residual is set at 61% of what you paid, then the only way you are ever not underwater is if your car is actually worth 62+% at the 36 month mark. And even then, it is an unrealized gain if you are not able to either buy the car and immediately resell it for more than 61%, or negotiate with the dealer to do something similar as a trade deal (which they usually won't entertain if you're not getting in another Audi as part of said deal).

Definitely one of the downsides to leasing. It sounds like financing would have been a much smarter move in your situation, but hey, life happens sometimes and you can't predict everything.

markcincinnati

Everything you said is true and accurate. The attraction of the lease, usually, is that you can lease a car without upfront money and for a relatively short period of time for a relatively low monthly payment.

These days, a 36-39 month lease payment translates to a 72-month purchase contract (if the monthly payment is the focus).

The "getting out" early is really no more or less an issue (especially at 7 months) in either case. The financial cost could be even worse if the car had been purchased in one lump sum.

This is likely an ugly situation no matter what unless you could find someone who would take over your lease and if your leasing company would allow your name to be removed. Swapalease may be the only thing that could be used -- and even that seems like it could be a huge financial loss.

njspeedfreak

I agree with Mark. The financial hit is going to be almost entirely tied to the depreciation in value of a car over the first 7 months which is substantial. Doesn't really matter what the financial instrument used is (cash, loan, lease), it's just the difference between buying price when new on the lot minus the selling price as a used car some time later.

Buying a 10 year old car and selling it 7 months later would end up costing almost nothing since most of the depreciation is long done. This might be more evident with a lease since in theory you are only paying for the part of the car that depreciates over that time period, but that payment is also structured so you are paying the AVERAGE depreciation over the entire term.

uniqueMR

VW Credit Inc (dba Audi Financial Services) and both are servicer for VW Credit Leasing Ltd and VCI Loan Services LLC.

So, Audi Financial Services/AFS is VW Credit.
And both AFS and VW Credit is owned by VW Credit Leasing and VCI Loan Services.

JohnEnglish

In Canada there's a company called LeaseBusters that does specifically this. It's how I got mu current car, I took over another person's lease.