Can I Remove a Co-Signer From a Lease?
Leasing a car is a popular option, especially for those who like to get a new car fairly often and pay a lower monthly payment. Millions of people, however, don’t have a high enough credit score to get a lease on their own. This might be caused for a number of reasons from no previous credit history to a bankruptcy, tax lien, or multiple late payments. In this case, a person can still get a lease, but they will have to get a co-signer. If you are in this situation, and you want to remove them from your lease, what are your options?

Removing a Co-Signer from Your Vehicle Lease

Unfortunately, the process of removing a co-signer from a lease isn’t extremely easy, though it is possible through a roundabout way. You can’t simply contact the lender and say you want to remove your co-signer. Instead, you have two main options that you can consider: getting out of the lease or buying the car through a refinance.

Getting Out of a Lease

One option you have to remove a co-signer from your vehicle lease is to terminate the lease. If you want to end your leasing agreement early, it is possible to do this. However, there are substantial fees that you must pay in order to do it. First, there is an early termination fee, which is seen as a penalty for cancelling the lease agreement early. The fee varies from lender to lender, but you should expect to pay at least $200, but usually less than $500.

On top of the early termination fee, some lenders will also charge a depreciation fee. As you might know, a car starts to depreciate as soon as you drive it off the lot. In other words, it loses value. When you break the lease contract early, some lenders require you to pay a fee for the loss of that value. You don’t have to pay that if you keep the lease until it expires, but if you break the contract early, odds are good that you will see this fee, too. Unfortunately, it’s not possible to give a range here, as this fee is calculated based on the value of the car and how many months are left in the lease. This varies from person to person.

You also might consider a lease transfer to get out of your lease. A lease transfer is when you literally transfer an existing lease agreement to another person. This is definitely the most cost-effective method of getting out of a lease, but not all lenders allow their lessees to do this. On top of that, you have to go through the process of finding someone to transfer the lease to.

Buying the Car Through a Refinance

Your other option to get a co-signer off of a lease is to buy the car through a refinance. This might not be an option for everyone, though, because again, this is based on credit worthiness. If you required a co-signer for a lease, odds are good that you will also require a co-signer for a refinance.

The first thing you have to do is look at your vehicle’s payoff information. This is the amount of money that you will need to pay off the car, and it is the amount that you will have to pay or finance. Once you know this amount, you will then have to look into lease refinance offers from lenders. You can often find out this information online, or at least find some lenders who are willing to work for you. Keep in mind that these offers are dependent on your credit worthiness, too, so depending on the interest rate you get, you could be paying several hundreds or thousands of dollars over the value of the vehicle.

When you have obtained your offers, you must make a choice on which offer is best for you. Remember, you will be locked into this contract for several years, in most cases, so make sure that the payment is something you can afford. Also, keep in mind that odds are good that your new monthly payments will be higher than your lease payments. However, when you pay off the car you will have full ownership of it, and then you can use the car’s value to put down on a new car.