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Lease Termination Fees and other costs

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  • dwynnedwynne Posts: 4,018
    I would get the current buyout price from Honda Finance (not including taxes) and see if you if you can get a dealer to buy it out for that price (or more). Accords hold value real well and with almost no miles on it (and I assume otherwise in like new shape) there is a good chance you could sell it to a dealer and come out OK.

    Dennis
  • flagg2flagg2 Posts: 5
    OK, here is my scenario.

    I have a 2005 Package #6 Prius on a 48 month lease. The lease is due March 2009. Yes, I know I shouldn’t have leased it but at that time gas wasn’t quite $2 yet.

    The residual value (payoff) is $9750.

    I only have 44,000 miles on it and will be way under the mileage restriction of 15K/year.

    The Blue Book value on this car is around $21000 if selling to a private party.

    Is it possible for me to go ahead and buy it out early from Toyota and then turn around and sell it to a private party?

    I am not planning on getting another Toyota so going to the dealership and working out something for a new Toyota is not an option.
  • sebring95sebring95 Posts: 3,233
    You'll have to go through a dealer either way. Toyota finance won't sell it directly to you....a dealer has to handle the transaction (you buying it from Toyota finance). I don't think it has to be a Toyota dealer, but just a licensed dealer. This may vary from state to state though, so best bet is to call them and find out.

    They can also give you the current buy-out amount...likely your remaining payments + the resisual value. You can then trade it to any dealer for that buy-out amount....it would be handled similar to if you owed money on your trade. I've done two buyouts from Toyota and they're a bit of a pain because you have to use a dealer. Most dealers will charge you a fee for processing the paperwork and some never responded to my inquiries. Good luck, let us know how it turns out.
  • qbrozenqbrozen Posts: 17,664
    7 months early isn't bad.
    Even if your payment is $500/mo, that would make your current buyout around $13k.
    I would post your car and all details on the Real-World Trade-in Values board here on Edmunds and find out what it is truly worth (KBB is garbage).

    '13 Stang GT; '15 Fit; '98 Volvo S70; '14 Town&Country

  • dwynnedwynne Posts: 4,018
    The lease bank will only sell to you or a licensed car dealer. In most states you will have to pay tax in order to get the car's title so that you can resell it. This will eat into your profits from trying to flip the car. In some states (CA, for example) you can apply for a tax refund or credit if you resell the car within xx days of buying it. Most other states are not that friendly. If you find a dealer willing to handle the paperwork of the buy and sell for you, you can expect them to charge you several hundred for the time and trouble - you would have to weigh this against the sales tax you would have to pay.

    You may be able to sell it to a car dealership and pocket some money. Not as much as a retail sale but perhaps less hassle on no sales tax to pay. Most dealers would love to have a low mile Prius they could mark way up and sell to some sucker :D . So in any case, get the current lease buy out w/o tax and see where you stand.

    Dennis
  • flagg2flagg2 Posts: 5
    Thanks for the advice everyone. Basically I am just tired of it and I know it is worth a lot more than the residual so I was thinking of upgrading to something else.

    I had to roll negative equity into it when I got it in '05 so I am paying $465/month. I have acclimated to that payment so I figured I could get out of this Prius and into something nice for that.
  • sebring95sebring95 Posts: 3,233
    I would trade in on a Hummer just to blow someone's mind. :P
  • dwynnedwynne Posts: 4,018
    You could get a nice G37 / G37 for that payment. Guzzles the premium at about 18 miles to the gallon around town, but a LOT more fun than the Prius :D .

    If all else fails, try DriversWay or CarMax if they are in your area. They may be able to beat the buyout price and put some money in your pocket. Note that with any dealer "deal" don't mention how much the buyout is - just tell them you simply want them to make you an offer on the Prius and that is none of their business what the buy out price is. Heck, if you have to just tell them you own it free and clear and get the quote - then "remember" there is a buyout on it.

    Dennis
  • volvomaxvolvomax Posts: 5,274
    Your termination fee is that you owe all the money for the lease.
    Including the residual.
    Depending on what your payoff is, you MAY be able to sell the car to a dealer for enough to pay the whole car off.
    Otherwise, you would have to makeup whatever the difference is out of pocket.
  • 1985mb1985mb Posts: 54
    Any experience w/ Volvo Finance lease terminations?

    Considering assuming an XC90 lease; trying to gauge how good/bad they are w/ EWT. 4 months remaining, mileage not an issue, so it's just the lease-end fees and charges that are food for thought
  • 1985mb1985mb Posts: 54
    Why not swap out of the lease? It may be your cheapest option considering you have a relatively in-demand car and relatively reasonable monthly payment. If you had a large SUV with a high monthly payment, you'd be in more trouble but at least with an Accord you have some outs...

    Even if you offer to cover the leasing co's transfer fee (not sure what that is for AHFC) and some upfront cash incentive to the buyer, it may be cheaper and easier than shopping around for a dealer to trader your car in.

    You can advertise your 'deal' on CL for free or at swapalease, leasetrade and leasetrader.com for a small fee
  • dwynnedwynne Posts: 4,018
    Why not swap out of the lease?

    Simple answer: AHFC does not allow lease transfers.

    Dennis
  • bkinpabkinpa Posts: 1
    I am in month 13 of a 36 month 2007 Chevy Suburban lease with a 32,000 mileage cap. Currrently at 20,000 miles. At my this pace, I will end up paying more than $7,000 in over mileage fees when I turn it in.

    Today, I called GMAC and inquired about what options (if any) do I have to soften the mileage blow at the end of my lease. They said I have 23 payments left at $470/month and I would probably owe $7k at lease end for the over mileage. They offered me an offer to terminate the lease today for $5,100! In fact, if I waited a few more months and timed my termination just before the 32,000 mileage mark, the termination fee would be even less and would NOT incur any over-mileage fees.

    Help me with the simple math: 23 remaining payments = $10,810 PLUS another $7,000 in anticipated over mileage charges versus paying $5,100 today and I am walking away from the lease.

    Why would GMAC give up a contractual lease obligation of $10k, plus another $7k to equal $17k AND be burdened with unloading a monster gas guzzler with high mileage versus letting me walk today for $5,100?

    What gives? Sounds like a good deal for me...
  • kyfdxkyfdx Posts: 31,059
    If you pay $5100 extra today vs. $7000 extra after 23 more payments, then the actual cost of using those extra miles is only $1900 more.... That's only $83/mo..

    $470/mo. sounds cheap for a Suburban... What are you going to replace it with?

    And, though not part of your money calculation, I still have to ask.. Why get a 10,500 mile/yr lease, when you drive 18K mi./yr.?

    regards,
    kyfdx
    visiting host

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • volvomaxvolvomax Posts: 5,274
    Most VFNA leases include wear ins at no charge.
    So, your only expense should be the $395 disposition fee.
  • bigbutrbigbutr Posts: 111
    We've been out looking at something to replace an 06 Odyssey van when the lease runs out in December. Of course, every place we go offers to make our last three payments if we want to get into their car then. My question is this: Would we get a check to make the final payments, then turn the van back in, provided there were no extra charges for any damages?
    We are well under our mileage (36500 of 46400 allowed) but I don't want to trade it in because the residual is higher than what I think we would get. I'm just a little leery of the "we'll make your final three payments" spiel because I can just see getting a notice from Honda asking where our payments are after doing the deal.
    FWIW, we're looking at a myriad of vehicles: Lexus RX350, Toyota Highlander, Volvo XC90, Acura MDX, Mazda CX-9, VW Tiguan and Buick Enclave. At least, that's the list we've narrowed down to after starting with about 18-20 and eliminating from there.
  • dwynnedwynne Posts: 4,018
    Unless your current ride is worth more than the current buy out price, no dealer is going to "pay your last payments for you". YOU are going to pay them since the dealer will just roll this on top of your new deal.

    You should negotiate the price of your new vehicle first, then worry about payments or lease details. THEN see if you can get the same payment / price and get a dealer to pay your current lease off for you. Odds are good they will not. You can also take your current ride to places like Driver's Way and CarMax to see how much they will pay you for it. Don't tell them how much you owe, the buyout, or how many payment you have left - just get a quote from them and then you compare that to the current buy out price. If they would give you enough to pay off the Ody, just sell it to them and go get something new (if that is what you want).

    If the Ody is not worth the buy out price now, it will not be worth more at the end of lease - so there is no reason to get out of it early (no profit in it). Why not just turn it in at lease end and then get something new? AHFC has one of the best, if not the best, turn in policies in the biz - no fee and $500 per item and $1,500 total in forgiveness for dents, tears, tires, etc - it really is painless.

    Dennis
  • ddog171ddog171 Posts: 2
    I have 9 months left on my H3 lease and am under my miles. I was wanting to buy a smaller car, and was wondering if I went with a GM car would they be willing to work with me on my lease without charging me the early termination fees? Or should I just wait till the end of my lease? What other options do I have?
    Thanks!
  • volvomaxvolvomax Posts: 5,274
    One way or another, your remaining payments will be charged.
    If you can, I would suggest you be patient and wait until your lease is up.
  • a4vya4vy Posts: 9
    I am in major desperation to find the best solution to my problem. I am moving away from the country in October 08 and dont know what to do about my car lease. I leased an Audi A4 last september 07' on a 36 month lease. I still have about 24 months left. Will I end up paying the remaining 24 months even after turning the car in early? Is my best bet using swapalease or leasetraders? How effective and quick are they in getting someone to take over my lease. Would buying the car and trying to sell it to a used car dealership be something I should look into?

    Any suggestions..solutions to help would be highly highly appreciated. :confuse:
  • robger99robger99 Posts: 42
    I would try leasetraders or swaplease first. the fees are not outrageous and depending on how low the monthly payment is you may have some success in transferring the lease. I have had my car listed for about 4 weeks and have a registered buyer coming to look at it on Saturday.
  • sebring95sebring95 Posts: 3,233
    How quick swapalease/leasetrader works depends on how good of a deal you offer. First thing to figure out is exactly how much $$ it's going to cost to get out of the lease. Call VW finance and ask the current buy-out price and also make sure that buy-out is the same if someone else or a dealer is buying it. Sometimes they have a different buy-out if it's not being sold directly to you. Once you have that number, you need to find out what the car is worth today. Carmax could give you a ballpark figure, or you could try the "real-world trade-in value" forum here at Edmunds. Once you have that you'll know where you stand. From there it's just a matter of mitigating the loss by selling or finding someone to assume the lease.

    Usually you can find someone to assume the lease if you sweeten the deal with cash. So instead of coughing up $5,000 if that's the short-fall of selling it outright, maybe someone will take $2,000 and assume the lease. Just depends on the situation. Let us know what you find out.
  • dtownfbdtownfb Posts: 2,915
    I'll play devil's advocate on this. If you do a lease swap through one of those websites, aren't you still responsible for lease since you are the one that the finance company has the contract with? Or does the website arrange for the potential "buyer" to be approve by that lender?

    Personally, I would find out what you are in for the A4 to the leasing company and sell it on your own. make up the difference if the sale comes up short.
  • sebring95sebring95 Posts: 3,233
    All those sites do is connect the individuals and provide some guidance on how to handle the transfer. Most company's allow for a transfer with full release of the original leasee. Honda is one that does not, you would still maintain liability. I believe VW allows a comlete transfer. I have assumed leases in the past through GM and Toyota and they released the original leasee completely. I then bought-out and resold or kept the vehicles at the end. GM had a different buy-out price for me vs a dealer. Dealer price was higher. Toyota had just on price but required using a dealer to handle the title transfer so it cost me some extra fees and headaches to get a dealer to do the paperwork.
  • a4vya4vy Posts: 9
    Thank you so much for your help and reply. I'm totally stressing!!!

    Here is some info about my lease

    Audi A4 2.0T FWD Sedan 2008
    Quartz Silver exterior
    Black leather interior
    Current mileage: 12,405
    Lease miles: 15,000/yr

    Downpayment: $5500
    36 Term lease 10/10/2007 ~ 10/10/2010
    Monthly Payments: $395.62
    I also was convinced to purchase the service contract for $590 which is included in the monthly payments.

    Payoff info:
    Residual Value: $18,924.00
    Scheduled payments not yet due: $9,136.75
    Rebate Unearned rent charge: -$2,231.35 ( I have no idea what this is)
    Total Amount: $ 25,859.55

    My car was leased from Rusnak Audi in Pasadena, Ca.

    I talked to a salesperson from swapalease. They charges are between 500-1200 but he saids is a one time start up fee and that is all. Is it necessary to go through a company like swapalease or leasetrader to transfer my lease? Or can I post my own ads?

    Is $25,859.55 a good deal for my car? Would anyone buy it for that amount?

    Thank you so much!!
  • a4vya4vy Posts: 9
    Did you go through swapalease or leasetrader? How much did you list your posting for? The swapalease person i talked to he said their prices range from 500-1200 and that i should do the 800 package?
  • sebring95sebring95 Posts: 3,233
    Someone else will have to chime in on the price. At face value, I don't think $25.8k sounds like an overly attractive deal. However, the lease payment is in the ballpark to get folks interested. You may have to throw a little cash on the table if you want a quick deal either way.

    I had no idea Swapalease charged so much for their services to "sellers". I've always been on the other end and I think I paid $50 for a lifetime membership. I'd probably recommend sticking an ad on Craigslist saying "4-sale or assume lease" and see what happens. You do NOT have to use swapalease or leasetrader to transfer a lease. And unless they've changed their services since the last time I assumd someone's lease (a couple years ago) they basically did nothing except put your ad online. They will only release your contact info to registered users, so it's a somewhat captive audience (serious buyers, so that's a plus). However, once I was put in touch with the seller, we had to take care of all the paperwork ourselves. Once you have a potential "assumer", you contact VW finance and they can start the paperwork for you. You basically have to file paperwork stating you agree to transfer the lease. The assumer has to file credit application and assumption documents with VW. Once everything is approved, you can hand over the keys. I think the quickest one I've done took two weeks and that was with Toyota finance.
  • robger99robger99 Posts: 42
    Went through swaplease and basic ad was only $100.00 with single picture. Contact named Bill Bell. Had a second registered buyer contact me this am so hopefully will transfer the lease soon. Have it listed on craigs list for a month now and just one brief email contact that way-would say swaplease is more effective as you know peole are at least somewhat serious about your car if they pay to register.
  • volvomaxvolvomax Posts: 5,274
    Wholesale on the car is prob $22-ish.

    I'd get a buy bid from Rusnak and see what it would cost to just get out.
  • dtownfbdtownfb Posts: 2,915
    Thanks for the explanation. sounds like he needs to check with Audi (VW) and make sure he can do a lease assumption. I still would sell and put up the extra cash. It seem slike it is going to cost him no matter what option he chooses.
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