Getting Out of an Auto Loan or Lease

Getting that new vehicle seemed like such a great idea at the time, but now your dream machine has turned into a nightmarish budget buster. You want to get out of your loan or lease. But can you? It is possible to undo a bad auto-financing decision, but be careful not to dent your wallet or hurt your credit rating in the process. For a loan, consider whether you need to drop the loan entirely, or if you could get by with a payment that is $50 to $100 lower each month. If so, refinancing may be the most economical answer. Before getting a new loan, however, check your current loan for pre-payment penalties (fees range from $25 to $200) for paying off the debt early. [Note here that Russell Country FCU does not charge a pre-payment penalty.] Try to negotiate a new payment plan with your lender. Give the lender proof that you can make the payments under the proposed plan. It's best to negotiate a new payment plan before you get behind on your loan. Another strategy is to sell the vehicle. Contact the creditor to say you are interested in selling and ask about the transfer process and paperwork. Remember, you're still responsible for whatever amount you owe on the original auto loan. Consider turning your car over to your creditor only as an absolute last resort. The costs of ending a lease early are so steep that you should do everything possible to make your scheduled payments through the end of your leasing term. If you are struggling, contact the leasing company and ask for a lower monthly payment. Be sure to get any changes to your original lease contract in writing.