Paying lease payments early

[Wrangler847]

What risks are involved with paying off lease payments early? I have gap insurance in NY. I'm looking into the new year with my finances and budget and this looks like the best option for me with what I get back in my tax return refund. If the car was wrecked could I loose all that money worth of payments? I suppose I could just bank the money in a separate account and pay it monthly too but that's one more thing to remember.

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[fitzman49]

If you pay off your lease too early you could be hit with an early termination fee. You'd want to check with your leasing company as every one of them has different restrictions.

 

[word302]

Asking for financial advice on a Jeep forum might be a bad idea. We're not the most fiscally responsible bunch.

 

[GoodAScoolwhip]

I bought a used car for my son and put a few K down on it and bought gap insurance. Two days after we bought it he was rear ended and the car was totaled. Gap insurance only covered the gap between what we owed and what the insurance paid. I didn’t get my down payment back that was just paid a few days earlier.

I can only imagine that you would not get any of your money back either.

 

[TimmH]

If you pay off your lease too early you could be hit with an early termination fee. You'd want to check with your leasing company as every one of them has different restrictions.

It's not early termination if you payed all the payments, heck they would love for people to make all the payments and then turn in the car early all the time. Less miles, less wear and tear.


@Wrangler847
The only real downside is that if something should happen, those extra payments are not recoverable through the gap insurance. Typically on my vehicles that have payments, I stay 2-3 payments ahead, so that if something hits my financial status, I am covered a couple months to get things straightened out.

 

[fitzman49]

It's not early termination if you payed all the payments, heck they would love for people to make all the payments and then turn in the car early all the time. Less miles, less wear and tear.

I would still verify with the leasing company regardless. My wife has a Subaru leased through Chase and even though we wanted to pay if off 2 years early they would still charge is a 2 payment penalty because it didn't follow the contract we signed. Not all companies are like this and not sure if Chase even does this anymore but it doesn't hurt to make a quick phone call to verify just to be sure. Worst case if there is a penalty, I would just throw the money in a bank account and draw from there regularly for your payments.

 

[ThirtyOne]

There is no benefit to paying payments early. There are some potential drawbacks if you get in a wreck or have unexpected expenses.

I had plenty of cash when I bought my Wrangler. My wife was diagnosed with cancer later that year. You never know what is going to happen.

 

[Wrangler847]

There is no benefit to paying payments early. There are some potential drawbacks if you get in a wreck or have unexpected expenses.

I had plenty of cash when I bought my Wrangler. My wife was diagnosed with cancer later that year. You never know what is going to happen.

Understood. Sorry to hear that man

 

[ThirtyOne]

Understood. Sorry to hear that man

Thanks. She is doing great.

 

[Renegade Wrangler]

Asking for financial advice on a Jeep forum might be a bad idea. We're not the most fiscally responsible bunch.

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