2. Late Fees and Penalties: You may be charged late fees and penalties for making past-due payments or missing a payment deadline. These fees and penalties can vary from state to state and may be outlined in your lease agreement.
3. Repossession: If you continue to miss your lease payments, the leasing company has the right to repossess your car. Repossession involves the leasing company taking physical possession of your car, typically without your consent. The leasing company may then sell the car to recoup its losses.
4. Deficiency Balance: After the leasing company sells the repossessed car, it will calculate the deficiency balance. This balance represents the difference between what you owe on the lease (including unpaid payments, fees, and penalties) and the amount the leasing company received for the car. You may be responsible for paying the deficiency balance, which can be substantial.
5. Credit Damage: Missing lease payments and having your car repossessed can significantly impact your credit score. This can make it difficult to obtain future loans, credit cards, and housing at favorable terms.
6. Legal Consequences: In some states, failing to make lease payments or engaging in other lease violations may result in legal consequences, such as lawsuits or criminal charges.
To avoid these consequences, it is crucial to communicate with your leasing company as soon as you realize you may have difficulty making payments. Many leasing companies are willing to work with customers to find a solution, such as reducing your monthly payments or allowing you to skip a payment.
