Lease Termination Fees and other costs

audia8q · September 2005

You have to remember something.....You don't own the car the leasing company (GMAC) does. This gives them the ability to do whatever they want with their car. If you had financed the car instead of leasing then the payoff is the same to everyone since it's your vehicle. With a lease you are essentially paying to use their car, under their terms.

Some mfg leasing companies require the selling dealer to price the payoff to anyone but the lessee. For example...Let's say I lease a Jetta to somebody. They want to trade it in at another dealer prior to lease termination. That dealer must go thru the selling dealer to get the payoff. The selling dealer can mark up the payoff if they want. Most leases allow the selling dealer to have first shot at the car if the lessee does not want it.

joe_car · September 2005

Gents,

I just bought a new car and made an early return of my 4 yr. lease: VW-Jetta. I made the last 4 payments (out of 48) to get out of the lease. Today I learned that the lease company wants $800 for excessive tear & wear (minor body scratches). The car is 32000 miles out of possible 48000 (12000/yr lease).

What would be your suggestions for me to negotiate a $0 payment for wear & tear (basically negotiating tools to avoid paying anything else). I played the "under-mileage card by phone and the representative did not seem to care.

I appreciate any advise

rroyce10 · September 2005

........ Anytime you turn a lease in -- it could be right time, it could 20 months early or 58 minutes late, "always always" get a condition report signed sealed "and" handed to you ....

Remember, you only rent this vehicle .. so you're are responsible for any damages or excessive wear .. under-mileage won't save the $$ that the lease company will spend (or lose) at the auction .......

Terry.

stkntraffic · September 2005

I leased a car through Southtrust bank. The lease was up about 5 months ago and I turned it in, not over the mileage, no excess wear and tear.

Since then Southtrust has been bought by Wachovia (not that that's relevant to the question). The question is, Wachovia/Southtrust is trying to collect a $300 disposition fee from me. However, on my credit report, it says the lease account is "closed, paid in full".

It seems like this is just a junk fee. They got their car back in the agreed upon condition, they made their money off me for 3 years - so why am I obligated to pay them another $300? What happens if I just blow them off?

audia8q · September 2005

Look on your lease contract....if it says you have a Dispo fee, then I suggest either pay it or try to haggle the amount but don't blow it off. If it says nothing about a fee then you owe nothing. Remember, these kinds of things don't go away. You may go a year and hear nothing...then all of the sudden they nail you on your credit report and it holds up a future credit decision while you spend the next 6 months getting it straightened out. Is $300 bucks worth all that hassle?

stkntraffic · September 2005

I guess the deeper question I'm trying to get at (maybe beyond the scope of this forum) is: if an account on my credit report is marked "closed, paid in full", do I really need to pay anything further?

rroyce10 · September 2005

....... The account "may" end up showing paid - or not ... but as a rule, it will also show-up as a $300 loan/lease deficiency - *not paid* .................. not good.

Southtrust has always had fee .. why not just pay it..?

Terry.

stkntraffic · September 2005

You're right, I should just pay it... except it's really a junk fee - and SouthTrust irritated me so bad during the lease with a billing error that it took them over a year to fix. I figure I spent $300 in my time screwing around with those guys, so we can just call it even and get on with our lives.

Seriously, do you think I can negotiate with them to knock it down (or take it off completely)? I have a spotless credit record, and to be honest, I usually pay cash nowadays anyway. But still, I'd rather keep my credit record intact if possible.

javner · September 2005

Really?

Last month when I leased an 05 Accord, the dealer took my 01 VW Golf as a trade that was 5 months from the end of the lease. When they got my pay off amount as a dealer from Bank One (I was next to the salesman when he called) the number he was given included sales tax. At least I assume it did. It is my understanding to buy out on a lease early it is the residual, the remaining payments minus rent charge and sales tax on the residual plus Bank One had a fee to buy the car. They rolled the $1k difference into my new deal.

I wonder if I call Bank One now a month after the deal was done if they can give me a breakdown on the buy out figure. If the dealer doesn't pay sales tax, but it was included on the numbers in the contract will Bank One send me a check for the amount the dealer sent them? I would think if the dealer found out after I signed the papers that the payoff was to high and they didn't pay that much, they have to refund me the difference rather than just keeping it don't they?

I hate that feeling of getting messed around with after the fact.

Live and learn!

rroyce10 · September 2005

.. **except it's really a junk fee** ............ is it on your contract..? .. 80% of the lease companies have a disposition fee ....

... **and Southtrust irritated me so bad during the lease with a billing error that it took them over a year to fix. I figure I spent $300 in my time screwing around with those guys, so we can just call it even and get on with our lives**

............ So it's a "irritation" issue....? .. call them and see what they will do - if nothing, then pay it so it doesn't become a "irritation" issue with them and they drop it on your credit report and you get "irritated" for the next 5/6 years ........

Terry.

stkntraffic · September 2005

I know, I know, you guys are right... I'm not normally like this - hence my hitherto spotless credit record.

It's funny, because when I read the forums I always get annoyed by people who whine and moan after the fact because they didn't read the fine print. Thanks for setting me straight.

I'll call and make them an offer, and let you all know what happens.

stkntraffic · September 2005

Well that was pretty painless. Called the bank yesterday and they knocked the $300 fee down to $158. Guess it was worth procrastinating in this case.

kmarucut · September 2005

Hi,

I hope someone can help me with my dilema. I went to this honda dealership planning to
trade-in my car and buy a new one (Honda Pilot LX 05). Instead, they offered me to lease because they said that my credit in not good enough. They told me that i have the option
to buy it after making good payments (no delinquent) for 7-8 months, this is to fix my credit
rating or reach the fico score they needed for me to buy the car with lower apr. The payments that i will make for 7-8 months will be deducted to the GROSS CAPITALIZED COST of the car according to them, is this true? Lets just say, that the GROSS CAPITALIZED COST of the car is $32,000 and i made a payment of $2,600 for 7 months, then my early buyout or payoff is $29,400 + tax? Is this right or they just lie to me just to sign the lease? Does anyone here had an experience of early buyout from a lease? And how will they come up with the buyout figure?

rroyce10 · September 2005

...... See, not so bad .....

They got a little money, you saved a little money .... all is well in the world .......... now, if I could figure out why my pool pump won't back-flush, it would be a 100 percenter day ........

Terry :P

jetsfan1 · September 2005

Is anyone familiar with the lease swap option? I came across 3 sites today - swaplease.com, leasetrade.com, and leasetrader.com. Is this too good to be true?

I am looking to exit a 2004 X3 lease - the dealer will take the car back but will ding me $6k (difference between 'market' and payoff). Needless to say I would prefer not to swallow this bitter pill. Assigning my lease to someone else sounds like a great option. Does anyone have any experience doing this?

Thanks!

troygirl61 · September 2005

Unlike so many lease holders I will be ending a lease on a volvo x70 AWD at the end of october.

My lease allows for 65,000 miles but I will probably have less that 50,000 on the car when I turn it in. There are a few dings and scratches and it needs two new tires, but I assume the lower mileage more than outweighs the fix ups they will have to do and gives them more value.

Is there any way to negotiate my way out of the excessive wear and tear costs given the below lease mileage? I

If this is not the right place to post this inquiry - let me know how do do it more appropriately.

Appreciate any help you can give.

Thanks!

tcoz · October 2005

I used swapalease.com a couple of weeks ago to "sell" an X3 lease and it went well. Most of it depends on what the payment is and what terms remain, such as months remaining and miles/month. If your payment is high, you can also add an incentive which effectively reduces the payment. Mine was an 04 X3 3.0 with a monthly payment of $406 and 26 months remaining with just over 1300 miles/month. I listed it on a Thursday night and by Friday morning it was taken with three more people wanting it. If your lease is with BMWFS, they're very easy to work with. They charge a $450 lease assumption fee (usually paid by the buyer) and the process takes 3-4 weeks. I found swapalease to have the best listing fees and they also have a link from leasecompare.com which I liked. All in all, yes these sites do definitely work, but your results will depend on the remaining terms of your lease.

Hope this helps.

spikeya4 · October 2005

Has anyone had any experience with IFS when they go to turn in their lease? I have a 2003 QX4 lease that is up in January, the car had some extra miles (most like 5k over by the end of the lease) and I don't mind paying for those. There are a few small dings and the inside and out are pretty much immaculate, I just put new tires on, etc...does anyone know if they knit pick or if they would let such small damage slide and just ask for the overage in miles?

kwyoon · November 2005

We had 6 months left on my Odyssey lease and we decided to buy a new car. We live in CA. I found a buyer and I sent payment for the payoff to AHFC since they do not handle 3rd party sales. I received the title with AHFC signed off. The enclosed letter says that I have to submit it to DMV to have AHFC removed from the title and put into my name only, but I am selling it directly to someone. Can I just sign off interest of the vehicle on the second registered owner line on the title and sign it over directly to the new owner?

spikeya4 · November 2005

Just as an FYI...IFS hired a third party to come - the guy was great and all of the knicks and scratched were chalked up to wear and tear. I had one little crack that they picked up on and that was all that is charged for. Very good overall experience!

myriamh · November 2005

My fiance and I recently moved. We now both work 2 blocks away from where we live. We have two cars and dont need 2 anymore and are considering getting rid of both and leasing out a new one.
1- Mine: Leased 01' Toyota Solara. $62K miles. I slowly ran over a large rock one night when I was picking up the mail causing a large scratch under the driver door. Besides this, the car is perfect. I have taken the best care possible.
Remaining payments: (321.41 includes taxes X 9 mos=$2893)
Payoff: $12,855.57
Trade In Value: assuming Clean cond: $9284
Based on this, am I upside down by: $3571? plus whatever it will cost to fix the scratch lets say another $1500.
I am looking at $5K neg equity?
2- His: Free & Clear Toy Corolla 98' 101K miles. Well cared for but driver handle broken on the inside. (minor, handle costs $100).
Trade In Value: $3800
QUESTION: By taking my negative eq of $5K and his positive eq of $3800. Are we in the hole $1200?
If so, $1200 doesnt seem like a lot of money to roll into a new car lease. We dont need 2 cars anymore. We hardly drive period! Am I calculating things right? If so, what is the lowest maximum mileage we could lease a car for?
THANK YOU!

knoopje · November 2005

Help, I have 23 months left on a 36 month lease and my license is going to be suspended by my doctor due to my health issues. What is the best way to get out of my lease.

Would appreciate any guidance.
Thanks

rroyce10 · November 2005

.... Unfortunaltly, there is no medical issue that would cancel the lease ... thats one of the unfortunate things about a lease ..

Get the pay-off from the lease company (not the dealer) and see where you stand in the market, or maybe sell it on your own ... you can also "try" some of the companies like Swap lease, etc ..... roll over to Real World trade-in Values and with a COMPLETE description I can tell ya what it's worth ....

Terry

knoopje · November 2005

Hi Terry,

Thanks for the info.
Here is my complete info so you can tell me what it is worth.
2005 Jeep Liberty 4x4
Approx. 6000 miles
3.7L Power Tech V6 engine
4 speed automatic
AM/FM stereo with CD
Air conditioning, power windows and door locks, speed control, fog lamps, 16" x 7" luxury Alum. silver wheels, remote keyless entry.

Thanks for the help!

rev0lution · November 2005

Hello, I leased my first car in September... a 2006 Saturn ION 3.

Since I've purchased the car, there have been a few "problems". 1) The engine suddenly stalls, 2) The sunroof no longer functions, 3) The trim around the doors has begun to become detached from the doors, 4) The leather seats have white spots all over them, and the spots are actually IN the leather, 5) GMAC has made mistakes in "processing" my monthly auto debits and has sent me 2 late payment notices only to say "our mistake, sorry!".

This is my first lease, and my first car purchase in general. How can I get out of this lease because if this is a sign of things to come from GM then I'm not impressed about my future with the ION.

The car was leased in Northern Virginia.

Thanks!

crookster · December 2005

Is there any lease buyouts by any car company now or does anybody know any dealerships in the ny metro area that are buying out leases?

Thanks!!!

jb_turner · December 2005

Getting out of the lease will be very exspensive...more than the car is worth.

bberke · December 2005

GMAC has a lease offer buyout preapproved however that offers 2000 to end you lease and go with one of their products.

sls1 · December 2005

I have one lease payment left and just hit my miles. Should I drive the car until the lease ends before leasing a new car? paying .15 a mile now. Will prob be 1,000 miles over which is a lot less than the xtra payment. Based on pure #'s it appears I should hold off. However, I was told that I would get a better deal before year end. Am I missing any other benefits?

joef47 · January 2006

I am negotiating with my local ford dealer on a new Fusion. This is the 6th car I've leased with Ford Credit and it seems they have changed their deals. The dealer says that they now charge a $600 aquistion fee. This is the first time they have charged this. The lease rate of 4.25 equates to 10.2% interest on the loan. This seems really high to me given that purchase rates are around 7%. Is the dealer being fair or am I being "taken for a ride?"

audia8q · January 2006

Your right, things have changed....They started charging an acquisition fee....But I'm puzzled, how did you get 10.2% interest from 4.25?

joef47 · January 2006

I found the formula from a gov. web site. Take the money factor (4.25) and mutiply it by 2.4 or if they list the money factor as .00425 mutiply it by 2400. I found that it is becomming more common for dealers to add a "dealer reserve" to the interest rate. This is their profit added to the loan. It can be as much as an extra 2.5% They won't offer this information. I feel it is greedy and misleading. I told the dealer I was walking away from the deal because of it. :mad:

joef47 · January 2006

It is also easy to figure out the interest rate by taking the rent charge (cumulative interest) and running it through a loan caculator!

audia8q · January 2006

Remember....you can't figure a Ford lease the same way as a traditional lease. They use a witch doctor formula which requires ford's lease factor book.

kyfdx · January 2006

I think the 4.25 is actually 4.25% APR.. GM and Ford use interest rates, not money factors... So.. instead of multiplying this number by 2400, divide by 2400, and you will get an equivalent money factor...

regards,
kyfdx
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joef47 · January 2006

No...When you take the rent charge (cumulative interest) and calculate the interest over 36 months, you get 10.2%. I verified this with the dealer.

dean_atl · January 2006

When I got a new car 2 weeks ago, I called different dealerships until I found one that didn't charge the $500 dealer fee.

dean_atl · January 2006

My lease with Chase will be over soon. I've been receiving letters in the mail saying that if I want to avoid paying excessive wear and tear, I can buy the car. They haven't even seen it yet. Has anyone tried to get a class action lawsuit for this kind of behavior. We need to put those businesses out of business.

Kirstie_H · January 2006

While you can't solicit for lawsuit participation here, we're happy to try to give you some advice.

Are you getting these letters from Chase? And are they specifically stating that you WILL pay excessive wear & tear charges? For some who have beaten up their leased vehicles, purchasing may seem a more attractive proposition than paying the charges.

im_brentwood · January 2006

Dean,

So you mean to say that if they told you you would have to pay wear and tear if you still bought the car that it would be OK?

They would much rather you buy the car for a myriad of reasons, like any other business trying to sell a product or service they are giving you reasons to buy said product or service.

If you buy out the car at lease end you are not responsible for wear and tear or mileage charges. Correct.

And you want to sue them because of this? :confuse:

red927 · January 2006

I just finished a 3 year lease with Chase on a 2003 Subaru Legacy GT. I also received letters from them about purchasing the vehicle. I decided not to and they sent me information about turning the car back in. They also stated that they allow $1000 for any minor wear and tear items like dings, dents and glass stars. The car was picked up by Chase and that was it. Very easy to do business with, no need to think about lawsuits, they were just giving you information.

Kirstie_H · January 2006

Hey, thanks for taking the time to share your perspective as someone who's actually been through the process!

stkntraffic · January 2006

Last year I finished a lease with SouthTrust/Wachovia. After I turned the car in, they made an attempt to charge me for a few hundred dollars' worth of excess wear and tear. When I called them to complain, they dropped the charges without a fight.

Just saying, it may or may not be Chase's standard practice to try and tack some extra charges on, but that doesn't mean you have to pay it.

I also washed the car and took a ton of digital pictures of the car inside and out before I turned it in.

Just one final thing, if you have a lease "termination fee" or some other BS charge, you can get them to knock that down as well. I think mine was $300, and I ended up giving them around $160.

mhs7386 · February 2006

To Carman or anyone else who knows: how long does it usually take Chase to have someone pick your leased car up at the end of the lease? I have been told they RARELY arrive in less than two weeks.

Does anyone know what happens if you return the car about two weeks after the lease termination date?

Thanks for your info and help.

tmcrouse · February 2006

Well, I have got 1 to watch out for. My husband works for GM and we were relocated 135 miles from my job. The job I have worked 22yrs to get. GM said for me to just quit and look for another position. Well, since April of 2005 when we heard about the relocation, I was hunting. As of 2/1/06, I still am at the same job, same co. Therefore as of now I would be unemployed almost 1yr if I did it the GM way. We can't afford that since GM moved us to an area that has a tax for everything. PA. They didn't give my husband a raise. He got his degree finally and was to get a raise, that didn't happen. They are hurting I understand. My only complaint was my lease. That is all we asked. Get me out of my lease so that I can buy a vehicle due to the 270 mile commute a day. I started making this commute after labor day 05 when the house sold. I went from 11k miles on my car to now 41k. This is in a bit more than 4 months. I will be over miles in 2 months. GM right now has early term til like 3/15/06 or 3/30/06 if your lease ends 12/31/06. Mine ends 2/11/07. 6 weeks later. I called and offered to pay 2 payments. 1 for jan 1 for feb. they wouldn't do it. then i found out that my last payment is 1/12/07. the current program the lease ends 12/31/06. You can't make an exception for someone who works for your company and someone that YOU moved? my husband called the HR dept and they said, well we used to do this but now they don't. the only thing to do is buy a car cuz i was in your situation until early term comes for your contract and that would be best. it is a .20 cent over your miles per mile. that wouldn't do. so now i have to fork out 1500 bucks for a car to drive me back and forth to work. a used car. 1 that i dont know. 1 that i will be on the road 3 days a week at 270 miles per day. i stay in a hotel 2 nights a week to cut down on the miles. i guess i could push it to 3 nights. i should see what is more cost effective. comutting only monday and oneway tues and then come home friday would be 2 roundtrips. maybe that will extend things. i just am so putoff that they cant help. they said, well buy your vehicle. yeah right. it is worth right now bluebook 9300 bucks and my payoff for you all is 12600. that is not even what it is worth. there other thing was turn it in anyway and have all the payments owed til lease ends onto the new lease. whatever......i am just thinking maybe they just dont care.

stkntraffic · February 2006

I leased a car through Wachovia/SouthTrust and turned it in almost a year ago. Yesterday I got a bill from them for property tax owed for 2005. I understand what they do - they pass the property taxes on to the customer (the leasing company actually owns the car and is liable for the property tax).

My question is - am I liable for the entire 2005 tax bill, since I only had the car until April of 2005?

kyfdx · February 2006

I can't speak for your state... but, where I live, automobiles are assessed for property tax on January 1st.. If you own it on that day, then you owe the tax for the entire year... it isn't pro-rated like it is for real estate..

One year, I leased a car on December 31st, and didn't turn in the old one until January 10th... I got hit for property tax on both cars that year...

Of course, the next time... I made certain to turn my car in prior to January 1st, and took delivery of the new one on January 3rd... I didn't pay on either one that year..

sailrmaarz · February 2006

I'm nearly a year into a 2-year lease agreement on my '05 Nissan Altima. As of today, I have a slight scratch on the paint of my right-side mirror, the usual nicks on doors from cars parked next to me, and unfortunately a cigarette burn through the upholstery of my back seat. I definitely don't want to keep this car (even though the payments and car itself are great) when the lease is up... what costs am I looking at in excessive wear and tear? Is there any way to fix the upholstery? I remember back at the dealership when signing for the lease, they offered some kind of wear/tear insurance which I didn't get, would it be helpful to still see if I can get this?

josephd05 · February 2006

Hello ladies and gents,

I have a 2003 accord exl v6 with NAV. It's a 4 year 15k per year lease. I have 9 payments left. I want to lease a new Toyota 4runner, top of the line. I know I can either A. wait it out, B. see what the trade in value of my car is and have the dealership purchase my vehicle ( I would be about 4 K upside down), or C. incorporate the remaining payments of my lease into the new lease. MY QUESTION IS, if I do the later, is the car going back to Honda to which then I might be charged for any excess wear and tear (need 4 new tires), or is the car totally out of my hands and I would not have to worry about that?

dutchboy · February 2006

What happens at the end of the lease period when I return a car that has suffered serious collision damage although after the repair it is not visible.

Lease Termination Fees and other costs

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