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JUNE 2013



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Can I get out of this Lease?
I don't need this stuff anymore! -
by Mary Redmond

A small printer asked me if she could cancel her credit card equipment lease. The leasing company told her that the lease was non-cancellable. She asked me to help her define non-cancellable.

Of course, you can pay a lease off early. IF and ONLY IF--you are willing to pay all of the amounts detailed below.

One hundred percent of all leases contain some heavy expenses should anyone think they can get out of a lease. Leases are meant to run their full length.

And if the lessee decides that they no longer need the equipment or that it has become obsolete, they may buy the lease out early----for a high price.

The usual lessee early payoff quoted is that the leasing company is due the following:

  1. All payments then due or past-due as of the date of the early termination.
  2. Any late fees then due.
  3. All remaining payments through the end of the lease term.
  4. Some leases require an early termination penalty fee of as much as 10% of the remaining payments.
  5. The current fair market value purchase price of the equipment assuming that the lessee wants to own the equipment.
  6. Sales tax on the equipment fair market value purchase price.
  7. Property taxes due on the equipment.
  8. If the lessee does not want to own the equipment, they owe the price to pack and ship the equipment back to a location designated by the leasing company, anywhere within the Continental United States.
  9. The price to insure the asset during the return shipping period.
  10. Sometimes the leasing company will add a restocking fee of up to 10% of the original equipment price.

After adding up this long list of expenses, do you want to tell your customer, that they can cancel the lease whenever they want to? No, I don't think so. When you recommend a lease be sure that your customers know that a lease is not like a loan. Leases can't be paid off early nor can your customer save money if they need to end the lease.

Know your lease language or you may find yourself recommending a poor financial option to your customer.

RedmondMary A. Redmond provides highly specialized information for corporations, managers and dealers who negotiate and manage leases. With 28 years in the leasing industry, including 21 working for the largest leasing companies in the U.S., Mary knows leasing. You may reach Mary at 913-422-7775 or mary@reviewyourlease.com

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