While talking with Chrysler Capital about terminating my lease early, they mentioned it would hurt my credit to do so.
I understand that I will owe the early termination fees and my remaining lease balance, there is no issue with making the payment once the return is complete. But if I pay, would it really hurt my credit? Anyone familiar with this?
For context, we are about up on our mileage and I would rather pay the ETF than the insurance for the remainder of the term, but if it is going to hurt my credit I would reconsider.
I don’t know the exact answer to your credit question. Maybe @trism@jeisensc et al might.
But you should consider the premise driving your early termination decision.
Do you no longer need a car? If you do, the cost of the replacement car plus its insurance plus the ETF should be compared to keeping the existing car and paying the mileage charge.
As long as you get out of the lease in a way that’s enumerated in the lease agreement (and pay all money that’s due in a timely fashion), there’s no negative impact to your credit.
Defaulting on the agreement is the road to credit perdition.
I think the problem is your specific use of the words “terminating my lease early.” If a CCAP representative hears those very specific words, then they are likely assuming you are trying to terminate a lease more than 90 days from the maturity date without paying off the account or without paying the remaining payments.
I think what you’re really trying to do is what CCAP refers to as a “customer payoff”. While they may sound similar (you’re getting out of the lease), the early termination option may actually harm your credit since the early termination process is much more involved and will be affected by what the car is sold for auction.
If you call CCAP back, make sure you’re 100% clear that you simply want to do a customer payoff; and you want them to tell you what is the amount owed under that option. Avoid using the phrase “early termination.”
You can see here in their fun little matrix that the Dealer Buyout (with double asterisks) tries to differentiate itself from a true “early termination”
