Lease Termination Fees and other costs

ljwalters1 · April 2005

I have no experience with volvos, but I've turned in 4 leases and have never been asked to substantiate the maintenance. My understanding is that that only comes into play if you want work done under warranty. Technically, I think if you've never had the oil changed or did anything at all, but the car is in good condition, you'll be fine. I'd skip the last maintenance.

ikramerica · May 2005

While in most cases, getting out of leases early can be hard, as some people have stated, this is not always the case.

It depends on your location, the desirability of your car (color, options, mileage, condition), etc. If your local dealer wants your car, and you are somewhere near the end of your lease (better than 2/3rds through), they might just take your car off your hands. This is because at this point you are paying mostly principal (just like a finance, your early payments are mostly interest even though your car is depreciating rapidly). If your buyout is roughly the trade-in value of the car at this point, and the dealer could use a car like yours, you will be in luck. This is also why some manufacturers can help you out of a lease near it's end if you sign on to buy another new car from them. It costs them nearly nothing to take your car back, and then they are going to make a lot off of you by leasing a new, highly profitable model rather than shop around for other brands.

This happened to me about 8 years back with a silver Audi A4 2.8Q. I was in Ohio, the car was rare, I kept it in great condition with low miles. I was going to Europe for the summer and planned on getting a new Audi in the fall when my lease was up (5 months later on a 36month lease). I visited the dealer to see if it would be possible since I didn't want to pay on a car I wasn't going to drive for a few months, they looked it over for about 5 minutes and said: we will take this car, can we drive you home? They said that there was a shortage of this kind of car in the area and they could easily sell it with an audi extended warranty since it was in such great shape. No fees for me, (no written promise to buy the Audi in the fall), just good will and everyone was happy. I might have tried to sell it on my own, but honestly, the ease of just handing it over and walking was worth it over the time involved, being a grad student with a job. I had even been willing to pay a small penalty to hand it in, since it would have been cheaper than paying 3 months lease, insurance, etc. So everyone was happy. And I did come back in the fall and lease another A4, so their good will also paid off.

But unfortunately for some of you who want to get out of a fresh lease, this won't help you. It's only an option when you are near lease end and want another car from that brand.

Currently I am nearing the end of a 48 month lease, but throughout the lease there has been no way out. That is because the car has had poor resale, and I live in LA which is a horrible market for selling your car (such a large market means poor resale). My residual is a few thousand higher than the market value of the car. But I knew what I was getting into from the start (well, I didn't know just how bad resale would be on the model), but i don't resent the credit company or dealer. It's just how life is sometimes. And just like the Audi was a win win for all, this is more of a lose lose. I kept the car a bit longer than I wanted and will have to pay the termination fee at lease end, and the creditor now has a car worth less than they estimated it would be and will lose money on it at auction.

rroyce10 · May 2005

..... **they might just take your car off your hands. This is because at this point you are paying mostly principal --- they looked it over for about 5 minutes and said: we will take this car, can we drive you home?** ...

You did good, veery good ... that said, you were veery lucky - "unbeleivabley" lucky - you were at the right place at the right time .. and there was a reason for all of this "good luck" ...

Dealers don't have anything to do with leases once you tattoo the paperwork at the beginning, they don't hold the title and they aren't a decision maker for the lease company, they actually become a 3rd party ...... that said, they knew (at the time) if they paid the vehicle off they could make a profit because of the market conditions at that time .... not to sound smart, but the bells should have been ringing in your head .. what you thought was a great favor, probably turned out to be a $2,500/$5,000 loss if you would have sold it yourself ..

Terry

hbomber · May 2005

Hopefully some information I know could help others who lease cars. I work at an inspection company where we inspect and price out Excess Wear & Tear damage to off-lease vehicle, damaged cars, auctions, etc..

I hope no one's lease company is us bank, b/c you will be slammed with EWT.

For example a 1" Dent will cost you metal time and a half panel paint.

These are alot of basic guidelines that is dealt with for different companies.

Also an important factor is hold on to your owner's manual for your car otherwise you can be looking at a $200+ bill for it on highline cars.

steine13 · May 2005

" [..] hold on to your owner's manual for your car otherwise you can be looking at a $200+ bill for it on highline cars."

BOTH volumes if it's a Bimmer... ;-)

-Mathias

kyfdx · May 2005

I think there are three of them counting the radio... And some other book also..

You'd think with all that crap, that they would give you a bigger glove box...

mojorator · May 2005

I need advice...please.

This is my FIRST LEASE and now I know I made a BIG mistake.. :mad:

My Situtation...

Leased a 2002 QX4 thru IFS (Infiniti Financial Services) on 9/2002 for $37K OTD
Term: 59 Months

@ 552.00/month
Mileage allowed: 12K/Year
Residual: 13K

When I first got the car I was not concerned about the Mileage as I lived about 5 miles from work...but we moved 6 months later and now have to do a 200 mile a day commute...OUCH..Did that for about a year before I decided to buy a beater/commuter car.

Now the car has 67K miles and a dent on the pass door (about 1K to fix).

I called IFS and asked about a buy-out and was told $26,300 :surprise: !
Trade in value to date is around $14K

I have about 2 years 4 months left on this lease and I don't even drive the car to not have any more miles in it.

What would be the LEAST EXPENSIVE way to get out of this predicament?

The dealer said i can sell it to them for 14K and I pay the rest,
I got an offer today for $15K from a private buyer,

Or I can pay the remainder of the lease payments of about $13K per IFS and keep the car stored for the remainder of the lease and return it with minimal over mileage fees and repairs.

Do I have another OPTION for a cheaper way to get out of this??

PLEASE HELP!!!

mike

ljwalters1 · May 2005

you can ask about buying additional mileage now. if, at lease turn-in, excess mileage would be $0.15/mi, maybe you can buy the mileage now for $0.10/mi.

You might also try REleasing the car. Actually, I don't really know how this would work - this idea is based on my lease of a used car: what if you went to a private lease company (like leasecompare.com) and had them purchase the car for $26,300, with the understanding that you would lease it from that company for X yrs? Before you get your hopes up, I'd expect that the agreed purchase price, combined with the car's lower actual value and the relative short term that I'd think you'd want (2 yrs?) would result in payments being too high. Still, at the website I gave, you can punch in the info pretty quickly and find out. Also, this would eliminate your mileage problem.

rroyce10 · May 2005

........ The boards are riddled with these stories ....

Get it serviced, put some new rubber on it, get it cleaned up -- and enjoy it .... the cost of the miles will be nothing compared with the negative equity ...

Right now, the future 50,000 miles might cost you $7,500 .... and now, you're $12,500 tanked ..... do the math, and find a good car wash ....

Terry.

mojorator · May 2005

In this case, if I decided to drive the car some more and make the remaining 28 Payments of 552.00/ month ( $15,456 -with tax) + assuming 50K more miles ($7,500.00) + Fixing the door ($1000.00) and additional lease end charges (~$1500.00)...

$15,456.00
$7,500.00
$1,000.00
$1,500.00

Total to keep it: $ $25,456.00 and by then the car might be worth about ~$7,000 to sell privately....so it will cost me right around ~$18,456 (Estimate). This also does not include the Insurance I need to pay each month of approximately $80.00/Month X 28 months..($2240.00)

Or bite the bullet now and give them $12K..

I think I'm going to have to choose the latter, but I really appreciate your point of view.
Thanks
Mike

Kirstie_H · May 2005

OK, but you also need to keep in mind the cost of replacing this vehicle with something else - so you're looking at $12K PLUS whatever it costs you in payments on another vehicle for the next 28 months.

That's the true cost of getting out of this vehicle right now.

mojorator · May 2005

Thanks-

I did forget to add the RESIDUAL amount to my calculation which is $13K..Im sure this also adds to my final value..

I do have another car that is paid for so I guess I'll be driving my "beater" for a while.

I guess Im stuck PAYING this and call it an "EXPENSIVE" lesson learned

Mike

zsilvee · June 2005

man I am in a similar situation. Even worse. I have leased a Toyota Camry 2003. I am not able to pay for a bout a year. I have to return the car but afraid. I need a n advise.

fish8 · June 2005

There's really no advise to give. I am sure they will send you a bill for whats still owed on the car.

hbomber · June 2005

Don't try to get out of your lease early. If your gonna pay for it, might as well drive it. If the dent on the door is really $1k damage, get it fixed by your insurance company. Look through IFS wear and tear charges. Getting rid of the car now, is just complete moronic. Negative equity = bad

gauderio · June 2005

I have a 2001 Mitsubishi Mirage which is now about to come to lease end. After many futile conversations and frustrations, we finally were given a direct explanation of how lease ends work. Fortunately, although I was quite naive when I signed the deal, there is no disposition fee at the end. So for me to walk away, all I have to do is pay the last few payments, drop the car off and pay the wear and tear. It all seemed like a lot of smoke and mirrors the dealership was trying to put up about who decides what this fee is and how much it will be. I think mostly because I'm not that far out of my mind to get into another Mitsubishi now. Anyway, finally after speaking to the owner of a local dealership, was it revealed that a third party company called Inspection Solution comes in and inspects the car after drop off and then sends Mitsubishi their evaluation and then MMCA sends me the bill. Should I go ahead and pay for my own third party inspection and have the car fixed elsewhere before dropping it off, or is Mitsubishi pretty fair about these lease end fees? Does anyone have any experience with these companies?

toyotaken · June 2005

In general, if there are any questions about how the evaluation is going to be, document everything. It never hurts to get a detail at a local car wash as well. But using a newspaper to verify date, take pictures of any areas of concern and note them. If they are damage, have an estimate done yourself for the cost of the repair. Also document the milage at the time you turn the vehicle into the dealership to make sure that any miles put on after you turn it in are not charged to you.

Hope this helps.

Ken

kyfdx · June 2005

Generally.. .. third party inspectors are very fair... and will reveal the results of their inspection to you immediately (and, give you a copy). So, you shouldn't have any surprises when the bill comes from MMCA...

I haven't dealt with MMCA, but I've had leases with AHFC (Honda), and a couple of independent banks, and have never had a problem..

regards,
kyfdx

beachbet · June 2005

Help-am considering leasing 2005 Honda Pilot, they tell me there will be a $2400 rent charge. What is this??? Can anyone tell me? Or are they padding the lease? Please answer asap!!!

toyotaken · June 2005

On leases, the finance charges assesed during the term of the lease cannot be referred to as "finance charges". For the same reason, the finance charge cannot be referred to as an APR, but as a money factor. Leases have different wording because you're not the "technical" owner of the vehicle and the terms must be changed per legal requirements.

So to answer your question, the $2400 "rent charge" is the total amount of finance charges over the term of the lease that you will be paying as part of the lease payment.

Ken

gauderio · June 2005

From what I've seen, "rent charge" is an ingenious way of getting out of having to put an APR on what you pay. My "rent charge" was over 20% APR. They saw me coming a mile away......

kyfdx · June 2005

20%? Not likely..

You aren't paying finance charges on the amount of the lease payment.. You are paying finance charges on the average of the cap cost and the residual..

For a $30K car that has a residual of $18K, you are paying finance charges on an average of $24K each month.. After all, you are borrowing the entire car, until you turn it back in...

Even the most onerous lease I've seen lately equates to about 10% APR, at most..

vrfour · June 2005

My wife is getting ready to turn in her 2001 Volkswagen Beetle. She has an appointment with an inspection team tomorrow. The car has less than 30k miles and is in perfect shape, except for two things: First, there is a six inch key scratch on the rear quarter panel. Second, the latch to the center console is broken.

It seems that the posts here are spilt 60/40 - 60% of the lease trun ins are not a pleasant experience, and the other 40% are good. Considering that the inspection team is going to be looking for "excessive wear and tear", are the two items above something that we should be concerned about? And if so, should we wait until after the evaluation to have them fixed? And just to throw in a dumb question, how exactly would we document the mileage at turn in?

Thanks,

Jim

michaellno · June 2005

The scratch will get you dinged for a $ amount .... how much, I cannot predict. Not so sure about the broken latch.

If the inspection person is as thorough as the person who reviewed our '99 New Beetle before the lease ended, you will be amazed at what they will find. The guy who reviewed mine actually looked at all the service reciepts and noted that the last service had yet to be performed! Since the inspection was done about 3 or 4 weeks ahead of lease turn in, we had time to take care of that.

Oh, and by the way, we ended up buying the car from VW instead of turning it back in.

Good luck!

ljwalters1 · June 2005

Generally.. .. third party inspectors are very fair... and will reveal the results of their inspection to you immediately (and, give you a copy). So, you shouldn't have any surprises when the bill comes from MMCA...

Wholeheartedly agree. Plus, you can elect to get fixed items they find on their inspection. In at least one lease termination letter, the leae company sent me a bill for excess wear and said they'd give me an extension (I think it'd be a free extension) of time to get the car fixed. On another occasion, I got into an accident the day of my inspection. The guy noted it down, but b/c I got it fixed, I didn't owe.

ljwalters1 · June 2005

The guy who reviewed mine actually looked at all the service reciepts and noted that the last service had yet to be performed! Since the inspection was done about 3 or 4 weeks ahead of lease turn in, we had time to take care of that

I don't think you needed to do that. The negative of not getting the car serviced is having problems that aren't covered under warranty, but your only requirement regarding turning the car in is that it not have excess wear and tear, not that you perform every recommended service.

ljwalters1 · June 2005

it would probably make sense to at least get a quote on the costs to repair. Undoubtedly, you can find someone to do it for cheaper than the lease co will charge, and if you're gonna do it, there's no negative to doing it before the inspection, except that if it's not something you'd be charged for, you won't know.

The mileage will be documented on the inspection form. If you turn it in after that, you can take a picture or soemthing like that.

hbomber · June 2005

I work at one of those inspection companies, and might even price out your lease end vehicle. the costs all depends on your guildelines through the bank you financed through. Any questions drop me a line.

For the scratch, it depends, how long it is, what company you leased the car through and is it buffable. If the latch is broken, that will have to be replaced, probably like $50

hbomber · June 2005

I work at an vehicle inspection company, but not inspection solutions.

Have inspection solutions inspect your vehicle, why pay another 3rd party??

They will give you a copy, then a couple days later it will be priced out and mailed to you or view it online, then you will see what you have to pay for. Shop around at body shops if u can get it fixed cheaper or just pay the EWT charge and move on.

Did you get guildelines of what is Normal Wear Tear and what is Excess Wear Tear from your Mitsu dealership? That will outline what is chargeable and not.

hbomber · June 2005

3 Dings on one panel are usually Normal Wear and Tear. The chip in the windshield depends on the size and your guideline from VW. Also find out if the 2500 cover for EWT covers tires and windshields. If the tires are less than 4/32, say hello to paying for new tires.

kolbster · June 2005

I have purchased several Honda vehicles in the past but I leased a Pilot EX-L yesterday. They offered a service (Autoguard) that would correct any problem I would have turning in the Pilot at the end of the lease (new tires (if less than 1/8 in. tread), upholstery damage, scratches etc.). This service would cost $499.00. I don't expect to go over the 36,000 miles. How picky are they when you turn in the vehicle? Normal wear and tear --Is this service worth it? I initially declined it. Thanks for your opinions.

Kolbster

ljwalters1 · June 2005

1 other thing to keep in mind is that the car inspectors do not work for the lease company. They inspect cars, and they will not have reviewed your lease contract nor probably any lease contracts, so they'll tell you what damage they're noting, but they can't tell you whether it'd be considered normal wear.

If you get someone who tells you "they shouldn't charge for that," that person may be experienced enough to know, or they could be just looking to do their job without getting into an argument with the driver.

ljwalters1 · June 2005

If it'd also cover excess mileage it might be a nice insurance policy in case your situation changes. Otherwise, I'd go from past experience. Does your car get dinged at work? Do you scratch your car against curbs when parking? Do you have kids that drink milk or fruit punch or other items that are likely to stain the carpet? Do they play baseball, soccer or other sports that require cleats that could rip your seats?

If the answers to all my questions are "no," you probably made a good choice in declining the insurance. After all, Autogard wouldn't be in business if they didn't make $$$ on those deals!

kyfdx · June 2005

The last AHFC lease that I looked at covered up to $1500 for wear and tear at the end of the lease... this is included at no extra charge..

I'd save my $499, in case I have to buy tires... If you are staying under 36K, you may get by without them..

Just treat the car like you owned it.... and you'll be fine..

regards,
kyfdx

hbomber · July 2005

Yeah, 499, seems expensive. It also depends if they cover the windshield or alloy wheels. If you treat your car well, normal wear and tear is tires, a chip in the windshield and some light scratches. Usually 3 dings on any panel is NWT.

Pilot is a good car to lease, they have 5 star residuals through ALG.

Also remember, any broken, bent or missing item will be EWT. I believe pilots dont have any textured bumpers or plastic pad steps, if so, you get one scratch or scuff on those two things and your paying for a new textured bumper or pad step.

On a side note, I would not lease a car with textured or chrome bumpers, usually SUVS and trucks. Because any damage on those bumpers and your paying for an entire new bumper.

ccappa · July 2005

Hello

Looking for advice. Currently on a two year lease for a Saab 9-3. Still have 22 months to go. Thinking I may want to get out of the lease 8 to 10 months from now.

Called Saab financial about a buyout-the figure they gave me was about 2.5 K less than my down payment + total monthly payments plus residual (including tax and fees). Was told this figure was good until August 7.

Was wondering if anyone had any idea if the buyout would change all that much, relatively, after August 7. I would like a little more time to decide.

Thanks.

stuckinalease · August 2005

I've run some estimates and it looks like I'm going to end up about 25,000 miles over my limit. Obviously if I'd known that driving to work would chew up so many miles I never would have chosen a lease on my PT Cruiser back in November of 2002. I got the shaft on the mileage penalty as well, with an .18 per mile penalty. That should come out to about $4500 I'll owe when it's trade-in time. To buy the car at that time would be $7500 but I don't see that as being worth it.

My question is this: I was looking into trading it in early and buying a new PT Cruiser but the payoff included "residual value" of $7300 due along with the lease balance of $3600 (and early term charges totalling $700). Sorry, I'm new and never had to deal with this before but is the "residual value" fee standard?

I was thinking it would be a good idea to trade it in now for a new car and just wrap up the lease balance and penalty charges (together = $4300) into a new car loan. If that residual value is added on that's a jump to almost $12,000 I'd have to pay right now. Is that correct? If it is, I'm assuming the best idea would be to eat the mileage charge of $4500 when the lease is up and include it in a new purchase at the dealership I turn it in to. Does this sound right? I'd rather pay $4500 in fifteen months than $12,000 right now. Thanks for any advice.

Justin

steine13 · August 2005

"I got the shaft on the mileage penalty as well, with an .18 per mile penalty."

That's fairly steep for an economy-type car, but you know what, I wouldn't let you drive my car for thousands of miles for that kind of money.... It really DOES cost $180 or so in depreciation to drive a car for a thousand miles, so you don't have reason to complain. If you owned the car, the value would drop the same way, no?

"That should come out to about $4500 I'll owe when it's trade-in time. To buy the car at that time would be $7500 but I don't see that as being worth it."

Of course it's not worth it... cuz you miled it up. But surely it's worth $3,000, which is what it'll cost to buy versus just giving it back & paying the mileage charge. So that's what you should do.

Some people are not clear on this, so let me state it simply: If you keep the car & pay the residual ($7,500), there will be NO overmileage and wear&tear charges.

Sounds like an easy decision...

-Mathias

jrseyshorerose · August 2005

I've been looking at the options for my end of lease. My DH does not want to buy a $30K car outright. The old dealer offered me lease on either 2005 & 2006 models, which although are the same price as the 2001, the lease prices (including loyalty incentives) were $60/month more. The inspection company came to look at the car with no additional wear and tear (got it detailed the day before). So, we might buy the car at the end of this lease. The contract says the buyout is about $16K. According to Edmunds' used car values, this car, at this mileage and these options is worth $12.5K trade-in, $14.9K private party, $18.1K dealer retail price.

Is there any bargaining room in the end of the lease buyout?

timny · August 2005

The Prez has apparently just yesterday signed into law a bill that will repeal the vicarious liability that leasing companies have used as a reason for hiking up bank fees in states like NY. (I am sure there's a more up-to-date news story out there, but here's the gist: http://www.overlawyered.com/archives/002621.html). Minmally, this means that the typical $900 bank fees we pay in NY -- and that I just paid for the lease on an X3 I've yet to pick up! -- should be at least partially refunded.

My BMW dealer says I should expect a refund from BMW. What have the rest of you encountered?

solaraman2003 · August 2005

Can I still have the opportunity to BUY the leased vehicle AFTER the leasing company does their inspection ?

I'm already expecting an excees mileage charge of about $4,500 1 year from now at lease end.. I'm probably going to want a new vehicle. I know I will probably be able to get more if I buy it and then resell it, but there are 2 negatives to that approach: 1) The headache of selling the vehicle, 2) the tax consequences (you PAY sales tax to purchase the vehicle, but you won't get it back when you then sell it to someone else.

So I'd hate to be on the fence about buying it outright, turn the car in, and then find out afterwards that I'm going to be hit with, let's say, another $3,000 of excess wear/tear. If I had known that, then that would've pushed me over the edge to BUY the car. WILL I STILL HAVE THAT OPTION AFTER THE INSPECTION?

I'm probably being paranoid, since I really do take good care of the car, probably much better than most people.

solaraman2003 · August 2005

The dealer has offered me an option to trade in my leased 2003 Solara SLE-V6 for either an '05 or '06 Solara. (I would like to BUY my next car)

He asked me to find out the buyout price from Chase and let him know. He said that the dealership would take the vehicle from me as a trade-in.

This all seems kinda complicated. I checked the buyout price from Chase as being $18k. The Edmunds trade-in value was something like $15k. So where is that $3k going to come from?

What are the steps to negotiating this "deal"? I want to BUY my next car, so do I simply start off with negotiating the purchase price (and options) for the new vehicle and work backwards from there?

Thank you.

solaraman2003 · August 2005

According to my Chase lease, I am allowed up to $1,500 on "excess wear and tear". It's not clear to me exactly what they mean by that.

The only wear/tear I find on my car is that I have a few very small dings on one side, and then some small (appx. 7" in diameter) metal warp (?) on one door from contact with another vehicle. I'm not sure I would call it a full-fledged "dent" exactly, but it is noticeable from within 5 feet, but not when you stand further away.

Will something like this warping/dent on the door fall into that $1,500 "excess wear and tear" and perhaps I would not be liable/charged for it?

solaraman2003 · August 2005

When I leased my 2003 Toyota Solara they convinced me to buy a similar policy for $450. I had 30 days to cancel it, however, and read every word of their documents several times over.

I also then (tried) to read (and comprehend) every word of my Chase lease agreement. As you would imagine, this was quite a chore.

I found to my surprise that my Chase lease automatically provided for $1,500 of "excess wear and tear". I also found that according to the terms of the Autoguard (?) an item would NOT be covered if it would have otherwise been covered under YOUR automobile insurance policy. In other words, if you have an accident which causes $5,000 worth of body damage to the car AND it is covered by your auto policy (which it WILL be because under a lease agreement you are required to have such covereage anyway, and who wouldn't on a new car), then they WILL NOT cover that under their agreement.

I was originally thinking that if per chance I did have some body damage that I decided NOT to report to my insurance company (for fear of rising rates), that this Autoguard (?) policy would cover it....NOT SO.

On the basis of those two aforementioned findings (lease covering the first $1,500, policy not covering much), I decided to cancel the policy.

LET ME TELL YOU....I spent a LOT of time getting my refund !
The FIRST thing I did was follow their instructions which said something like "...notify the carrier in writing within 30 days...". I sent a registered/return receipt, etc. letter to them. So there could be no question that I did this within the 30 day period.

After about a month, and being handed off from person to perons (perhaps as many as 8 different people), the Toyota dealer said to me "Good news...I received your refund of $180 and will mail it out to you today". The policy COST me $450 and was only supposed to be subject to a $30 cancellation fee! WHAT A SCAM!
I raised hell and eventually got the $420 back.

solaraman2003 · August 2005

When I took the Chase lease on my 2003 Toyota Solara I knew enough to get GAP insurance, from everything I've read about it.

When I got home that day with my new car, I read through my lease thoroughly (which I really SHOULD'VE done before signing it

and to my surprise I discovered that according to Chase's terms I would not need to have GAP insurance, as long as my auto insurance had a certan deductible (I don't recall the amount). All I had to do was change my deductible amount a bit, at NOT much of an added cost/premium anyway, and I would not be liable for a penny should the vehicle be stolen or totalled.

jnm1 · August 2005

We have been on a lease with our 05 Tundra that will be a year on Oct 31st this year and we have already put 3000 over the miles...is there a way to change the lease terms to allow for more miles...say instead of 12000 to 15000 or more? I am new at this whole leasing thing and could really use any advise I can get on whether to keep it tell the miles are low enough to tade it in or get out of the lease what would you recomend...
Hopefully this makes sense thanks for your help!! Jen

scott33 · August 2005

I was told by one dealer that dealers don't pay tax for the buy-out pay off's directly to them. I was told this by a dealer in NY.. I ended up not buying the car since they wouldn't come down off the price a bit.

Is this true? He took 1,300 off in the trade in due to the tax.. I went to another dealrer and there telling me they have to pay tax. When I called Chase finance I asked specifically "what does the dealer pay" and they gave me the none tax amount. I will have to call them on monday to confirm..

Any thoughs or experiences...

kyfdx · August 2005

Dealers don't pay sales tax, when they take your car in trade from the leasing bank... If you buy it, you have to pay the buyout price plus tax.. The dealer just pays the buyout price.. It is a wholesale transaction, and not taxable to the dealer.

regards,
kyfdx

ebaby · September 2005

What should I expect to put out financially when I return the car? There are some minor scratches and very little dings on the bumpers and fenders. The driver's side mirror is broken and needs to be replaced. I would like to either lease another VW or just walk away. I know I need to replace the mirror, but what about the other minor stuff? By the way, I'm way under in mileage. Do I have to re-qualify for a new lease? Or will my approval for the current lease automatically pre-qualify me? I'm a first time lease customer and just want to get all my ducks in a row way in advance.

bmcfarlane · September 2005

I called GMAC this last Friday to get a payoff amount on my Smartlease. With this information in hand I went to a dealer this last weekend and purchased a new car, using my leased car as a trade-in. I then got a call on Monday telling me my payoff was almost $3,000 higher. I was then told the amount I was given over the phone was if "I" purchased the car...but since I traded in, that was no longer the right figure. I called GMAC and asked (1) why I wasn't told there were two differing payoff amounts and (2) why none of this is in my lease agreement. They had no response to either question, just kept stating that I needed to pay the additional $3,000. Why would it matter if I buy the car from them and then sell it to a dealer, or just sell it to a dealer in one transaction? If anyone has has experience with GMAC early lease termination and this specific type situation, please let me know as I am determining whether a class action lawsuit is appropriate for other consumers.

Lease Termination Fees and other costs

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