Lease swaps are win-win deals for car shoppers and leased car drivers!Like what you hear? Help us out by writing a review at iTunes. Questions go to money@qdnow.com. Thank you!
Money Girl
132 MG Save Money by Trading a Car Lease
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What happens if you lease a car but need to end the lease before it expires? John from Aventura, Florida wrote in with a helpful resource for this predicament. About a third of all consumers choose to lease a car instead of buying one. Leasing usually allows you to drive a newer or more high-end vehicle for a lower monthly payment we compare to the cost of using a loan to buy it for the same price and down payment. Even if you purchase a car using a low interest loan, leasing is usually less expensive in the short term. But the monthly payment is just one factor to consider when evaluating whether to lease a car. I did two shows in the fall of 2008 about leasing versus buying a car. If you miss them, listen to episodes number 89 and 90 for more information. I discuss the fundamental differences between buying and leasing a car and how to know which option is best for you. One of the disadvantages of leasing a car is that breaking a lease can be expensive. That could wipe out all the money you hope to save by choosing a lease in the first place. Once you sign a lease, it's a binding legal contract that typically lasts anywhere from three to five years. Early termination requires you to pay off the full balance of the lease in addition to paying hefty penalties to the car dealer or leasing company. A broken lease can also leave a bruise on your credit report. However, there's another way to get out of a car lease that's affordable and doesn't affect your credit score. It's called lease trading. John recommends using lease trader dot com because it matches up people who want to get out of their lease with people who want a lease. Another company that provides this service is swap a lease dot com. Both websites put car shoppers in touch with drivers of leased cars who prefer to transfer their lease instead of having to fork over big bucks for early termination. You simply register online and post information about your lease and vehicle. When an eligible buyer wants to take over your lease, you transfer ownership to them. They assume your lease and make all future payments and you walk away from the contract without any financial penalty. These services do cost money, but paying these fees can be much more cost effective than breaking your lease. Check the websites for their standard fees. Another reason to consider lease trading is that buyers get some nice benefits too. For example, you can take over a car lease with no money down since you don't go through a dealer. You can also find a shorter term lease if you don't want to commit to a typical three to five-year agreement. To use these websites, you first browse through the listings to find a vehicle and a lease that interests you. Once the company that holds the lease approves you to assume it, you sign the paperwork and work with the seller to transfer the vehicle. You can even trade a car lease with someone who lives in a different state. Long distance transfers are not uncommon. You can arrange to have the vehicle inspected by a dealer or a mechanic close to the seller and have it delivered to you by a shipping service. Most online trading sites offer resources for the different services you might need to get the deal done. If you want to trade your lease, always do it with the leasing company's knowledge and approval. It's best to contact them first to make sure that they allow lease transfers, otherwise you could end up being responsible for the payments anyway. You can find the basic transfer policies, restrictions and fees for many leasing companies at leasttrader.com. Listing a lease vehicle online offers no guarantee that you'll find someone to take it, but there usually are many people in the market for short-term affordable car leases. Even with the transaction fees and advertising costs associated with doing a transfer, you should be able to save a bundle compared to the cost of buying out your lease and paying an early termination penalty. Yes, there's a new network podcast that I know you're going to love. It's The House Called Doctor, hosted by Dr. Rob Lambert's. The doc is dishing out quick and dirty tips for taking charge of your health. Be sure to subscribe in iTunes so you get each new show as soon as it's released. I'm glad you're listening. Cha-ching. That's all for now. Courtesy of Money Girl, your guide to a richer life. H5N1 bird flu is spreading in some animals. If you work with poultry, dairy cows, wild animals, or withdraw unpasteurized milk, wear protective gear, and take precautions. CDC.gov/birdflu. A message from CDC. Earning your degree online doesn't mean you have to go about it alone. At Capella University, we're here to support you when you're ready. 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