Just got out of the car lease for our VW Rabbit 2007. It had 2 years left out of the 4-year term.
Moving from suburbs to the city, the second car turned from necessity to luxury. A waste of money under the circumstances. We decided to get out of the lease.
To get out of a car lease, one transfers it to someone else.
The other option – according to the contract I had – was to pay all remaining monthly payments and return the car. This obviously beats the purpose of saving by not paying the remaining months of the lease.
Thought you might be interested in some details.
My lease was for 48 months. Remaining were 25 months. The monthly payment was about 350 dollars.
Therefore I still had to pay 25×350 = $8,750 for lease only.
Add 25 months of parking at my building for this car (this was our second car, we had only one parking spot for free):
25×80 = $2,000 for parking
Add about 120 dollars monthly to fully insure this car: 25×120 = $3,000
Add another $1,000 for car maintenance over the next 2 years.
I won’t mention other expenses such as gas, so the total to save was $14,750, roughly $15,000
(this should also give you a rough idea of how much it costs to lease a small car over 2 years)
HOW DO WE GET OUT OF A CAR LEASE?
We couldn’t find a friend that did this before.
So we called the dealer, and he said “yes, we do transfer leases, and we do the paper work. You just let us know when you find someone to take over your lease.”
THE LEASE TRANSFER FEES
With all taxes included, the dealer charged $850.
The dealer told us about leasebusters.com, apparently the most efficient service for this kind of advertising in Canada.
Posting there is $400. Somewhere else was cheaper (as low as $60), but they all seem to conceal their fee deep in the jungle of the website.
We decided to try Craiglist and Kijiji first, because these are free services.
It worked! We got interested people from both services. Our buyer came from Craiglist
We offered to pay the first rent, so whoever takes over the lease is left with only 24 monthly payments more.
We also offered the security deposit that we made at the beginning of the lease. Its value was another rent.
SEALING THE DEAL
With this kind of incentive, and a car in mint condition, we were able to seal the deal in 2 days.
We had to wait a few more days until the buyer’s credit application went through, and one week later we signed the papers at the dealership.
Out of our pocket: 850 (lease transfer fees) + 350 (first rent, incentive) = $1,200
Total saved: 15,000 – 1,200 = $13,800
Photo credits: TMAB2003 on Flickr. Thank you!