AVP/SR. Mortgage Loan Originator
Alaska USA Mortgage Company
Phone: 360-679-5633 / 360-969-5550
License: NMLS#304060 / CL-157293
Dump that Car
Getting Rid of a Vehicle You No Longer Want
Getting rid of a vehicle isn't always as easy as it seems. Problems can include everything from being locked in to an ironclad car lease to the inability to sell it for a fair price. Throw in any of the reasons for wanting to dump the car in the first place and what you have is a recipe for a potentially long and frustrating process. Follow along as we explore a few of the options, including some you may not have realized.
Getting out of a car lease
While the list of positives doesn't stop there, car leases also carry a few negatives. One such negative is known as a "No Cooling Off" period. Once you sign the paperwork and drive the car off the lot, you have officially entered into a binding contract. There are some consumer laws that allow for a remorse period on major purchases, but automobiles are generally not included. Unless your dealership has broken the law or has leased you a lemon, chances are you are stuck with the terms of your car lease.
So, let's say that shortly after signing on the dotted line for that high-end luxury car, your financial situation changes for the worse and you can no longer afford it. Or, the opposite happens and you find yourself longing for an upgrade. One option is something known as an "early termination" of the lease. The problem with early termination, however, is that it can be costly, very costly. Aside from paying off the amount owed on the lease, there can also be penalty fees and other miscellaneous charges padded into the contract.
Another option is to sell your leased car privately. The problems with this option are that it requires a lot of hard work on your part and it only benefits consumers with cars that have an equal or greater value than their current "buy out" price.
There is one more option for getting out of your car lease and it happens to be the best one for most people. It is something known as a "lease transfer" and the process is just as it sounds. A leaseholder finds someone who is not only credit-worthy, but also willing to assume his or her car lease. Once the terms are negotiated and ratified the remainder of the lease is transferred into the new leaseholder's name.
If a lease transfer sounds like a complicated process, it's because it can be. The good news, however, is that thanks to websites like www.leasetrader.com and www.swapalease.com the lease transfer process has been fully explained and streamlined. These companies basically act as middlemen between the buyer and the seller, providing a forum for listings, as well as hands-on help with expediting the process.
It is important to know that the aforementioned websites as well as most car leasing companies will charge a fee for a car lease transfer. However, assumption of these fees can be negotiated between the buyer and the seller. They are also much less costly than the fees associated with terminating your lease early.
Whatever you do, avoid relinquishing the car to the dealer and abandoning the lease altogether. Doing so will most likely show up as a repossession on your credit report.
Selling a car that you have purchased
The first is to sell your car privately. This option is many times the one that yields the greatest financial return. You should note, however, that it also requires the utmost diligence on the part of the seller. Proper pricing and marketing of the car is completely up to you. The same also applies to the transferring of the title. If this is the route you decide to take, be sure to check the laws and procedures for selling a car in the state where you live.
Your next option in this situation is to trade the car in to a dealer as part of payment for a new vehicle, provided that your goal is to obtain another vehicle. While this will most likely be the easiest method for "selling" your car, there's a good chance it will not be very lucrative.
Trade-in values for any car are usually on the low side of its worth. At the same time, car dealers also like to mix the trade-in price into the negotiations for your new car. This procedure can make it difficult to figure out the actual amount of money you're getting for the vehicle. We recommend that you always negotiate the price of your trade-in separately from the negotiation for your purchase.
Another option for selling your car comes in the form a company known as CarMax. Operating in the manner of a car dealership, CarMax buys and sells used cars to the public. The main difference is that with both transactions there is no haggling over the price.
When you bring your car into a CarMax looking to sell it, the process starts with a complete vehicle inspection as well as a test drive performed by the company's buyers. At that point you are made an offer that is valid for seven days at any CarMax store, allowing you the opportunity to think it over while exploring other options. An added perk here is that CarMax guarantees to make an offer on your car even if you have no plans to purchase a car from them.
If you decide to sell your car to the company, bring your car along with the CarMax offer, any other paperwork concerning the vehicle, and all sets of keys into any CarMax dealer. They take care of the rest. If a payoff is involved, CarMax contacts the finance company and then issues a bank draft for the difference. If there is negative equity in the car you're selling, CarMax will accept a cashier's check or certified check from you and then pay off the lender.
Selling your car to CarMax may not bring you as big of a return as selling it privately, but when you consider the speed and ease of the transaction it quickly becomes a very good deal. By logging on to www.carmax.com you can find out more about the company and what they offer, as well as if they have a storefront near you.
Donating your car to charity
1. Make sure the charity accepts vehicle donations directly
2. Drive your car to the charity as opposed to having them pick it up
3. Make sure your charity has 501(c)(3) status
4. Understand how your deduction is valued
5. Sign over your car to the charity
6. Get a receipt after the car is sold
7. Consult your accountant first
We hope we've shed a little light on the options available to you. Think about which one suits you best and good luck dumping that car.
License AK# 157293 Washington Consumer Loan Company license# CL-157293 California Residential Mortgage Lending Act, License# 4131067
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650 NE Midway Blvd., Suite 101
Oak Harbor, WA 98277
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