The lower monthly payments and start-up costs of a car rental contract may have appealed to you at first, but your situation may have changed since you signed that contract. You may no longer be able to meet your payments, your car may have been damaged or stolen, or you may suddenly need a different type of car for business or personal reasons. If you have to end your rental agreement early, you may miss out on the savings opportunity you saw at the beginning. However, there are ways to end a rental agreement other than simply returning the car and paying a ton of money in early termination fees.
Method 1 of 3: Transfer the rental agreement
Step 1. Review the provisions of your contract regarding transfers
A transfer allows you to find someone who wants the car, is willing and able to make the monthly rental payments.
- If you manage to transfer your rental agreement, you can escape the monthly payments without having to pay early termination costs. Regardless, you will have to pay a few hundred dollars to transfer the contract.
- About 80% of rental contracts do not include post-transfer obligations, but the other 20% require you to take responsibility for the payment and maintenance of the car. Although the general trend favors open transfer policies, some rental agents and car companies such as BMW and Infiniti retain post-transfer obligations.
- If your contract includes post-transfer obligations, you will remain hooked on payments, even after the transfer. This means that if the person who took over your rental agreement doesn't make the payments, the company will charge you.
- Some car companies also limit the period of time within which you can transfer your rental agreement. For example, Nissan will not allow you to transfer your rental agreement if you are less than seven payments missing.
- The rental company with which you made the contract may require you to pay a fee for the transfer and processing of the application, although you can also pass these charges on to your buyer. For example, Ford Motor Credit Company charges a credit application fee of $ 75.
- Never transfer a rental agreement without company approval. Doing so will result in significant fines.
Step 2. Search online for rental transfer companies
Companies like CarLeaseDepot.com, Swapalease.com, and LeaseTrader.com specialize in lease transfers and handle the transfer process by working directly with the company you signed the lease with.
- Compare the rates and services of various rental contract transfer companies and read customer reviews. Make sure you have read and understood the details of all the fees and procedures before choosing one.
- While all companies do the same, the fees for various aspects of the process may be different, or you may prefer a particular method.
Step 3. Advertise your rental agreement transfer
Once you pay the advertising fees, the rental transfer company will post your ad on their online marketplace.
- Research the reasons why people agree to have car rental contracts transferred to them. Taking over a rental agreement has many benefits, including the ability to commit for a shorter period of time and avoid hefty down payments. If you find reasons that seem right for your car, you can target your advertising towards those people and thus get better responses.
- For example, some people like to change cars frequently and try new things, so if your rental car is a particularly trendy or sports car, you may want to tailor your ad to appeal to those types of buyers.
- Those interested will respond to you by email or through your account on the website of the rental contract transfer company.
Step 4. Respond to stakeholder inquiries and negotiate transfer terms
Provide information and documentation regarding the car's condition, maintenance, and accident history as soon as possible.
- Typically, the new renter will pay for necessary vehicle and transportation inspections, as well as transfer fees invoiced by the rental company.
- Depending on your situation, you may want to add an incentive for the person who will take over your rental agreement. A typical incentive is a stipend that reduces the buyer's monthly rent payments and can range from $ 500 to $ 5000.
- When transferring a rental agreement to someone who lives in another state, the rental transfer company can help organize inspections or transportation of the vehicle.
Step 5. Transfer your rental agreement
The rental transfer company or your original rental company will do a credit check to see if the interested party is eligible to take on the contract. You may have to pay a fee.
- Once the buyer has been approved, you will have to pay a processing fee to the rental transfer company and provide them with the contract information.
- The rental transfer process typically takes several weeks to complete. Once the transfer is in order, you will sign the original rental company and transfer company documents to deliver the car.
Method 2 of 3: Buy your rental car
Step 1. Find out if you can buy your rented vehicle
Most rental agreements include a "sale" or "full purchase" price. Paying this amount frees you from your rental contract and makes you the owner of the car.
The total purchase price is typically greater than the actual value of the car, and the difference can range from hundreds to thousands of dollars. Check the Kelley Blue Book to find out what your car is worth before choosing the purchase option
Step 2. Find a buyer for your rental car
If you can come to terms with a buyer who has the cash, you can reduce the total loss from the sale of the car immediately after purchasing the rental agreement.
- Post your car for sale online on sites like cars.com or autotrader.com. Another option is to sell your car in the classic way. Put a sign in the window and leave it parked in a place with a lot of traffic.
- Look for an individual buyer rather than a dealer. Car dealers will offer to pay the wholesale price, as they also need to make money from the sale of the car, which usually will not be enough for you to terminate your rental agreement. An individual buyer will want to drive the car himself and may be willing to pay more.
- Be honest with potential buyers. Tell them as soon as possible why you want to sell the car, especially if you need payment in advance.
- If you need to have the buyer's money before completing the rental purchase, the buyer may feel more comfortable paying your rental company directly rather than paying you first and letting you finish the transaction.
Step 3. Consider fees and taxes
Depending on the sales tax laws in your state, you may have to pay taxes when selling your car. There may be other charges to consider, such as title transfer fees or entry fees.
Method 3 of 3: Deliver the car
Step 1. Read the fine print
Familiarize yourself with the terms of the early termination clause in your rental agreement before contacting the rental company. Remember that these clauses are generally designed to protect the financing company and not to benefit you.
Step 2. Contact the rental company
Find out exactly how much early cancellation will cost you and what additional charges will be included. Many companies charge a hefty early termination fee that is roughly equal to the sum of all remaining rental payments. In addition, predetermined fines or other charges will be added for the "refill" or "processing" process.
Step 3. Work with your rental agent
If your only reason for having to cancel the rental agreement is financial, your rental company may have assistance programs for people with verifiable financial problems.
- If you've lost your job or experienced a loss in your family, you may be able to get a forbearance on your payments. You will have to make up the difference at a later date, but that can help you in the meantime.
- Some companies will let you "change the car" on your rental agreement. For example, if you rent an expensive car and want to save money, you could swap your luxury sedan for a cheaper car.
- These changes often come with an additional fee and are still considered an early termination of the rental agreement for credit reporting purposes.
Step 4. Pay the necessary fees and return the car to the dealer clean and in good condition
Some car rental companies will consider adding additional charges for body damage or general deterioration.