Question For AutoBrag: Can I Break My Lease Early?
Question From Michael: My lease has 1 year left on a 3 year lease on my Lincoln Navigator ‘06. What are the odds of a dealer allowing me to end my lease now if I offer to lease another vehicle?
CarFinanceGuru: Mike, the SUV market is so bad that some manufacturers are selling them below invoice to move out inventory. This does not bode well for any SUV owner. There are a couple of options here.
1) Take a look at www.swapalease.com and www.leasetrader.com and see if your monthly payment is higher than, lower than, or the same as other Navigators. If you put some money down at the time of your inital lease then chances are good you have a lower payment than the average. This also means there is a good chance someone will take the vehicle off your hands. If you payment is equal to or greater than you will most likely need to give a cash incentive to the person taking over your lease to make it more attractive.
2) What vehicle are you looking to swap the Lincoln for? Unless it’s another Lincoln model you are trading in the Navigator for the dealerships are going to will dock you heavily. They will look at your payoff price on the Lincoln Navigator and not offer you anything close.
That means you are going to take a hit that will be in the thousands of dollars. They may offer to roll this loss to your new vehicle which creates another problem potentially. You will not only be hosed on the Navigator but also on the new vehicle. The price you will probably pay on the new vehicle will be higher than if you did not have to trade in the Navigator. Dealerships know you want out and with some salesman like talk and a look at your “new” vehicle I can see the dollars flying out of your pocket.
3) Ride out the lease an return the vehicle which WILL NOT be worth what the residual value stated at the beginning of your lease. This might be the best move despite gas prices choking all of us to death. At lease you can know that your loss (or use of funds) will be 12 X lease payment and gas. Yes, gas is high but I am willing to bet that scenario 1) and 2) above costs substantially more.
This is a common problem right now facing many consumers. I’ve talked to a lot of dealerships recently and they have no choice but to pay very low prices on SUVs. Let me know what option you are going to take and we’ll try to help some more.
