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Posts: 252
Registered: ‎07-08-2013
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Paying off lease faster?

I currently have 2 leased cars at 311/month and 428/month. Would there be any advantage for me if I paidd more each month to pay them off faster? Would I pay less interest? I'm not really that knowledgable about car loans (these are my wife and I's first cars!). Next time I will probably purchase our cars since I've heard that is better. Thanks for any advice, really appreciate it!

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Registered: ‎01-28-2010
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Re: Paying off lease faster?


b1gr3dmachin3 wrote:

I currently have 2 leased cars at 311/month and 428/month. Would there be any advantage for me if I paidd more each month to pay them off faster? Would I pay less interest? I'm not really that knowledgable about car loans (these are my wife and I's first cars!). Next time I will probably purchase our cars since I've heard that is better. Thanks for any advice, really appreciate it!


I don't think you'll save any interest by paying your lease early, but you'll need to check the lease agreement to know how they'll apply extra payments....

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
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Re: Paying off lease faster?


pizzadude wrote:

b1gr3dmachin3 wrote:

I currently have 2 leased cars at 311/month and 428/month. Would there be any advantage for me if I paidd more each month to pay them off faster? Would I pay less interest? I'm not really that knowledgable about car loans (these are my wife and I's first cars!). Next time I will probably purchase our cars since I've heard that is better. Thanks for any advice, really appreciate it!


I don't think you'll save any interest by paying your lease early, but you'll need to check the lease agreement to know how they'll apply extra payments....


Okay thanks...I'll review it and see what it says. I just wanted to see if I had any options to save money!

BoA 123 $2.5k (11/12) // Discover It $3.9k (7/13) // Citi Forward Student $3.8k (7/13) // Chase Freedom 5k (12/13) // Amex Blue Cash 6k (1/15)

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Valued Contributor
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Re: Paying off lease faster?

I have a lease through TFS. In june i paid my lease all the way up until january. so my next payment isn't until next month and i hunt paid since june.
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Re: Paying off lease faster?


Luscher wrote:
I have a lease through TFS. In june i paid my lease all the way up until january. so my next payment isn't until next month and i hunt paid since june.

Yep, I think that is how most leases work; extra payments just push out your due date on your next scheduled payment....

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Re: Paying off lease faster?

Do you want to keep the car after the lease?

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Re: Paying off lease faster?

[ Edited ]

Leases aren't loans.  They are rental agreements.  So there is nothing to "save."  The only savings could be tax savings by pulling payments into a different tax year for business expense tax deductions.  A viable strategy if you have some large bonsuses that will be paid prior to eoy.

 

In fact if interest rates were higher, a better strategy would be to pay them "late" up to the penalty date and earn interest on the payment amount since the payment is not affected by timing or principal balances.

 

 

Contributor
Posts: 252
Registered: ‎07-08-2013
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Re: Paying off lease faster?


Creditaddict wrote:

Do you want to keep the car after the lease?


Yes, I would like to keep one of the cars after the lease is up. The other one I'm not sure about yet. Why do you ask?

BoA 123 $2.5k (11/12) // Discover It $3.9k (7/13) // Citi Forward Student $3.8k (7/13) // Chase Freedom 5k (12/13) // Amex Blue Cash 6k (1/15)

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Re: Paying off lease faster?


b1gr3dmachin3 wrote:

Creditaddict wrote:

Do you want to keep the car after the lease?


Yes, I would like to keep one of the cars after the lease is up. The other one I'm not sure about yet. Why do you ask?


The newer the car the lower the interest rate you could get to buy it... might be worth to do the numbers if you bought it out now vs. wait until the end of the lease.

I recently looked at this on our Kia.

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Registered: ‎07-08-2013
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Re: Paying off lease faster?



Creditaddict wrote:

b1gr3dmachin3 wrote:

Creditaddict wrote:

Do you want to keep the car after the lease?


Yes, I would like to keep one of the cars after the lease is up. The other one I'm not sure about yet. Why do you ask?


The newer the car the lower the interest rate you could get to buy it... might be worth to do the numbers if you bought it out now vs. wait until the end of the lease.

I recently looked at this on our Kia.



Good point, I was thinking of buying it early too, however I thought you weren't able to buy early from a lease unless you pay large fees?

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