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Lease Termination Fees and other costs

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  • billy3554billy3554 Posts: 147
    If you were to transfer the lease, the person picking up the lease would likely be stuck with the $2,500 buyout fee. Not likely anyone would be foolish enough to assume that burden.

    With this lease, as described, there is no painless way out. If it were me, I would sell the car, Carmax perhaps, and take out a low interest loan to pay the difference.

    A lease is great for many people provided they understand the terms of the lease. This is an example of why people should never, ever trust an auto salesperson or anyone in the dealership.

    Look at it as a lesson learned and move on.
  • qbrozenqbrozen Posts: 17,146
    But at this point in the lease, he'd probably have to come up with WAY more than $2500 if selling to a dealership. However, if transferring the lease, it may be he only needs to come up with $2500 to hand over the the transferee. So still the cheaper option.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • dwynnedwynne Posts: 4,018
    Any dealer can buy your car off lease, Carmax is just set to make the whole process easier.

    I don't think you will find many takers on a transfer - that is assuming Ally allows them and they let you off the hook (some banks hold the original lessee responsible even after a transfer). This is partly due to the fee but your payment is way too high for this car. Someone could get a new lease for less. You will have to offer a large cash incentive to entice someone to take it.
  • dwynnedwynne Posts: 4,018
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    Chevrolet National Lease Offers

    Low-Mileage Lease for Qualified Lessees
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  • Hi. I have a 2011 Dodge Durango. Lease terms: 39 months 10K miles/year. My lease is due to end October 2014 so there are 15 remaining payments/months on the lease. My agreement states that buyout can only occur at the end of the lease term-When I will have been deployed to Tokyo for DH's job. In the interim, I am moving from the origination location to a temporary location for about 1 year before we will be deployed. I do not want to take the truck with me as I am positive it will result in excess mileage and wear and tear (mountain terrain vs. flat terrain). I would like to know how the early termintaion charges are calculated? Obviously, I will be responsible for the remaining payments. But what else can I expect to be on my termination fees bill? I leased the truck from the local Dodge dealership and financed through Ally Financial. I do not understand the "surplus" fees associated with the closing of the contract/selling of the vehicle. What are these fees? How are they calculated?
    Please help me detemine if early termination makes sense or if I should continue to drive/lease the truck and cover the expenses at the end of the term (i.e. shipment to new residence, excess wear/tear, excess mileage, and return shipmen to dealership, plus fees associated with giving power of attorney for someone to turn in the lease for me as I will be out of the country). Or if I should cut my losses pay the early termination expenses and buy a new (used) car to use for the next year. Please someone advise. Thanks!!
  • Hey according to new Ally lease documents I see on the 'net. They appear to be official training documents for dealers, it looks like Ally has DROPPED the $2500 purchase option fee that they previously tacked on to the residual value. For some reason they still charge the $2500 on Mitsubishi vehicles, but not on anything else.

    Can anyone who has signed a recent Ally lease deal confirm this?

    Since Ally is no longer (apparently) charging the purchase option fee, are they waiving it on leases signed 2-3 yrs ago?
  • started the other day for october and reduced the 1500 damage waiver to $500:

    http://www.hondafinancialservices.com/leasing/benefits

    "turn-in" fee listed at 350 on contract
  • Hi,

    I was wondering if someone could help explain this situation to me. I leased a 2011 Subaru which has about 9 months left on the lease. I have gone over my miles so I went to a Honda dealership and they paid my remaining payments (around $2K). The Honda dealership then sent my car to a Subaru dealership for me. The salesman called me and said for me to call Chase and let them know where the car was so they could pick it up.... which I did.

    While being on the phone with Chase (the loaner bank), they explained to me that I terminated my lease early so what happens now is that they will pick up the car, and auction it off. If they don't get the value of the car (I believe it is about $12K for the purchase price), then I have to pay the remaining balance.

    Since the Honda dealership paid the remaining payments, wouldn't that mean I fulfilled my legal requirements to pay? What if in the auction, they sell it for $1k? I will $9K (minus the 1k at the auction and the 2k that was given from the honda dealership)??? How do I know they are not scamming me? If someone can xplain this to me, that would be great.... also any advice on what to do would really be helpful Thanks!
  • sebring95sebring95 Posts: 3,231
    edited November 2013
    This is all pretty hard to comprehend without seeing the actual lease document. It sounds like your lease has some sort of open-end clause regarding an early termination.

    Typically when you trade-in a leased vehicle, the dealer buys out the lease. It sounds like this Honda dealer just paid the early termination fee and is now trying to turn the car back to Chase. That would probably work unless there is an open-end clause which requires a fair-value adjustment.

    I would try to work this out with the Honda dealer. If they accepted the terms to take that vehicle on trade they should make it right. The really bad part is that since they didn't keep your car they obviously buried the fee somewhere in your deal. So you paid that $2,000 fee as well.
  • kyfdxkyfdx Posts: 27,623
    The problem is... the Honda dealer did not buy your trade-in from Chase.. they just paid the remaining payments. This is not equivalent.

    The only way to terminate your lease early, is for someone (you or a car dealer) to buy the car from the bank for the payoff amount. The only time you can drop your car off and walk away, is at the end of the lease term.

    I'm sure that the Honda dealer knew your car was not worth the current payoff amount, and suggested this, knowing that you would assume the risk and liability, and not them.

    If it's not too late to unwind this deal (have you taken delivery of the new car?), then that's what I would do... As you note, your liability in this scenario could be large.

    On the plus side, Chase isn't going to "auction" this to a buddy for $1K, and stick you with a giant loss... They are going to send the car to a wholesale auction (like Manheim), where hundreds of dealers will be there to bid on the vehicle, so it should at least bring a fair wholesale value.

    Hope that helps... you aren't the first person to assume you could just pay the rest of your payments and end the lease early.. Good luck!

    kyfdx

    MODERATOR
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  • ken117ken117 Posts: 189
    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: 27,623
    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

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • Kirstie_HKirstie_H Posts: 10,818
    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: 17,146
    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; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '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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