Does terminating a car lease early affect your credit?

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Well, I am actively looking to trade my lease in early. How does it affect your credit? I am not certain, but I do believe it, in the least, has some negative affect on your lease and will drop your Fico; however, I am not sure as to how significant the drop and hit to the credit would be.

Answer

when you lease a car you are agreeing to pay for the part of the car you use basicly the miles you put on it and the damage you do to it from new until the lease is up. You will never own the car until you buy it. terminating a lease by droping the car off at the dealer will most definatly be a bad thing for you because it is a loan and a contact you would be breaking. However if you trade it off on your next car it is no problem however you will take a beating on the trade if you are not careful. You can usually cal and get a 10 day payoff on your loan. that tells you how much you need to pay or get in trade for another vehicle. if your vehicle is a good model that retains its value you are set and should not have to much trouble getting out of it. But if you bought a not so desirable model you may not beable to get enough for the trade, then you will be paying more for your next vehicle than it is worth. This is very typical of a car deal and most people fall into this catagory if they have bought a new car without paying off the last one before getting into thier latest one. but to answer the original question if you trade the lease in for a new car(or used) you will have to payout the lease holder to make the new car deal. That is the term of your lease. Alot of times if the lease is close to the end and you want another vehicle from the same dealer they can put you together without having to pay any early termination fees. good luck

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I had a lease on a car that I had for a year and a half, the lease was for 5 years and the payments ended up killing me. I took it in on a whim to the dealership I got the lease from and started complaining they screwed me on the lease while I was browsing thier older used cars. I went in to talk to a salesman and they agreed to pay off my lease if I bought one of thier used cars. I got slightly screwed on the price, it was a honda civic 97 for 6500., but at least the car was in good condition with low mileage and I will own it after it's paid off.

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Oh and I forgot to add that my credit wasn't affected in any way because the dealership was actually paying off the leasing agency.

First answer by ID0000000000. Last edit by ID3483100030. Question popularity: 164 [recommend question]