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Lease Termination Fees and other costs

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Comments

  • ken117ken117 Posts: 195
    Anyone can end a lease early if the person makes all the required payments.

    With a lease a person agrees to make a number of payments and limit the amount of miles driven. If all lease payments are made the lease terms were met. It makes no difference if the payments are made over the life of the lease or before the end of the lease. Under those circumstances the leasee is only responsible for excessive mileage and wear and tear and any lease termination fees included in the lease.

    Other than excessive damages, the leasee is not responsible if the value of the vehicle is less than the residual value. In any case, returning a leased vehicle before the end of the lease term should result in a higher value than would returning the vehicle at the end of the lease term.
  • kyfdxkyfdx Posts: 29,370
    If you turn in the car before the term is up, then the contract terms no longer apply. I think the example given above is a real-world case of what can happen.

    The lease is governed by a contract, that specifies what happens in case of early termination. What logically should happen or what seems fair isn't relevant. The only thing that matters is the contract language.

    regards,
    kyfdx

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  • Kirstie_HKirstie_H Posts: 10,896
    With a lease a person agrees to make a number of payments and limit the amount of miles driven.

    Ditto what kyfdx said. What you mentioned is only part of the lease agreement terms. Depreciation is calculated to represent the value over time as well as mileage.

    Let's say I lease a 2014 vehicle today for 3 yrs/36k total miles. I drive it all over the place and put 36k miles on it in 6 months, make all of the remaining payments and want to turn it in. Now how well do you think a 6-month old miled-up vehicle is going to sell as a used car? The dealership would have to sit on it.

    And, even if that did make sense, as kyfdx said, it's about what's in the contract. Those are usually a few pages long. If it were that simple, you could write the contract on a napkin.

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  • qbrozenqbrozen Posts: 17,468
    edited November 2013
    So, there are a few issues here. While I can never understand why a bank wants to prevent early turn in (after all, they get the remaining payments and get to sell it on earlier than planned, which means they'll get more now than in 9 mos), it is what it is. They didn't plan on having the car back for 9 more mos, so they want to make sure you keep it.

    Just keep in mind, the difference you would owe is between the auction value and the RESIDUAL price, not the current buyout. The current buyout would be the residual plus all remaining payments, but since you made the remaining payments, you just owe the residual.

    If it is something that concerns you, then take the Subaru back and keep it sitting in your backyard for 9 more mos.

    I had this very argument with Mistubishi about 12 years ago. My new wife had entered a 4-yr Mitsu lease before we met. She was at her mileage limit about 14 mos before lease end. After about 4 mos of finding ways not to use the car, we bought another. We rolled the remaining payments, but Mitsu threatened the same results you are seeing now. I tried to explain they were only hurting themselves because we'd be turning in a car in 10 mos that would be worth less than it is now, but the folks on the phone are just following the rules set forth for them, regardless of the lack of good sense. So it sat in our backyard and we kept the money from the rollover in our account and continued making the scheduled payments until the term was up. Then gave Mitsu back their older, dirtier car with flat-spotted tires that required a jumpstart.

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

  • My husband had a lease with Nissan it due to mature in December of 2014, he went to dodge and they purchased the vehicle paid the remains balance due on the lease. He called to obtain and end of lease and they said he owes an additional 3 for early termination..is this possible.
  • audia8qaudia8q Posts: 3,138

    We often pay remaining lease payments for customers who want to move to another car...but it can be a little tricky but there is a work around... first of all the dealer should have made the remaining payments out the the customer and let the customer make his remaining payments...then some lease co, like chase, won't let the dealer terminate the lease with more than 180 days remining, any point before that it creates all kinds of issues, potentially vol repo....so the customer or dealer should have held on to the car until that point. Customer should also keep the insurance on the car. At the 179 day point take the car to the dealership to terminate the lease and its over.

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