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Restructuring or canceling an automobile lease

It seemed like a good idea when you signed your auto lease all those months ago. But now those monthly payments are busting your budget. Is there anything you can do?

Take a deep breath: There is life after a lease. But since you don't own the car, you have fewer options. And it will cost you. Be prepared to pay steep charges if you cancel it outright.

A better move is to restructure the lease so that your monthly payment is more manageable. Keep in mind that you are at the mercy of the leasing company; be honest and explain your financial situation in detail.

The letter below is a guide to changing your auto lease. Personalize it by entering your specifics in the areas in red.

You can print out this Web page and make your changes by hand or copy the body of the letter and paste it into a document where you can make your changes on your PC.

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Leasing company
City, State, ZIP Code

Re: Monthly lease payment

Dear Sir or Madam:

I am writing this letter to discuss my current automobile lease with name of leasing company.

I appreciate your efforts to work with me when I signed the lease on my name of vehicle leased. However, after I began making the monthly payments, I realized that amount of monthly payment is too much for my budget.

Describe in detail why you can no longer afford this particular dollar amount. Be honest, but firm in seeking specific relief. For example: "My payment of $325 a month is not working out for me and I am requesting a new, lower payment of $275. I am willing to extend the length of the lease to accomplish this lower payment and would be happy to meet with you to discuss the specifics of making this change to our agreement.

If you decide you would rather return the vehicle and break the lease, tell the company: "I have made a decision to turn in the vehicle I am currently leasing with your company and I am willing to pay the necessary fees to make this happen. Please send me an itemized statement as to what it will cost me to terminate our agreement."

Thank you for your prompt attention to this request. I have been very satisfied with the service I have received from name of leasing company and look forward to working with you to adjust or cancel our current lease agreement.

Your signature
Your printed name
Your mailing address
your phone number
your fax number

-- Posted: Oct. 23, 2003
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