Lease Termination Fees and other costs

tamaraster · August 2006

Unless a dealer will give you more than the payoff cost, you should probably just return the car to VW. Before you do that, they'll help you arrange to have th car inspected, so you'll probably know if they find anything to charge extra for. I turned in my VW Passat a year or so ago and had no problems (no extra charges) despite a few scratches and dings.

The $350 charge comes after you turn it in. They mail you a bill. So you don't need to have the money at the time you turn the car in.

Depending on your credit, it's not generally too hard to purchase a car for no money down. Just make sure you can afford the new car and don't go nuts. Or of course, if you like leasing, you can do that again. I didn't like leasing.

qbrozen · August 2006

Depending on your credit, it's not generally too hard to purchase a car for no money down.

True, but it is a higher monthly payment (of course) AND you'd be well advised to get gap insurance.

baggs32 · August 2006

Hi all,
I need a fast answer. I want to terminate my '04 Mazda6 lease about 6 months early so I can get in on an '06 Mustang which I can get a great deal on. My lease balance is $12,900 and the Blue Book value is $13,900 for a "Good" condition (which is definitely is at only 13,900 miles after 29 months of ownership) trade-in value.

Mazda says I can give it back if I pay the negative difference between the appraisal value and the balance, which as you can see there most likely is a positive diff in this case, and a $200 early termination fee. Anyone know anything about this?

The Ford dealer also says they can take the Mazda for what it's worth, cut a check to Mazda Credit, I pay the $200 fee to Mazda and drive home in my new Mustang GT.

Is this a bunch of baloney or am I on to something here?

kyfdx · August 2006

Make sure that the Ford dealer is actually giving you $12,900 for the Mazda, and not just adding negative equity to your new Mustang loan..

Every car dealer pays off your current loan (or lease) when they take a car in trade... they have to, or they can't get clear title to re-sell the car. But, that doesn't mean they are giving you what you owe on it. Make sure they aren't shifting some of that cost onto a new loan..

And, if your car is really worth $13,900, then why aren't you getting some money back? Just a rhetorical question... most cars don't bring the book price..

regards,
kyfdx

baggs32 · August 2006

And, if your car is really worth $13,900, then why aren't you getting some money back? Just a rhetorical question... most cars don't bring the book price..

I don't think they give you the difference when you turn a lease in do they? I often wondered that myself.

I know the Blue Book is just an estimate but I've had good luck with it in the past. My trades have been very close to the KBB value I pulled online. Probably because I keep them clean and they have low mileage.

Make sure that the Ford dealer is actually giving you $12,900 for the Mazda, and not just adding negative equity to your new Mustang loan..

They actually gave me two different options and neither of them included negative equity.

qbrozen · August 2006

no, they don't give you the difference when you turn in a lease, but they do give you the difference if you SELL them the car (not just turn it in).

Its simple either way. Ask the Ford dealer what they are buying your Mazda for and ask the Mazda dealer what they would buy it for.

Forget about all the other details. They will just confuse you.

baggs32 · August 2006

Ironically they both came back with a value of $12k which is not enough. The Mazda dealer won't go any higher but the Ford dealer is at least trying to.

Thanks for clearing that up!

qbrozen · August 2006

no problem. Good luck.

baggs32 · August 2006

Long story short, the Ford dealer bought my Mazda6 outright and I now have a new 2006 Mustang GT in my garage. I'm in heaven!!!!

No fees, no inspection, no nothing to get out of the lease in that situation. They'll send a check to Mazda and it's all done in case anyone is wondering how that works. It's essentially a normal trade-in as long as your leased vehicle is valued at more than the buyout balance.

qbrozen · August 2006

It's essentially a normal trade-in as long as your leased vehicle is valued at more than the buyout balance.

Exactly ... well, almost. It still would have been a trade-in even if the buyout was more than the value, but the negative equity would have been rolled into the new car.

Anyway, congrats on the purchase. Enjoy.

baggs32 · August 2006

It still would have been a trade-in even if the buyout was more than the value, but the negative equity would have been rolled into the new car.

Right, it does work both ways and is important to note on this forum. Thanks for elaborating.

Anyway, congrats on the purchase. Enjoy.

Oh man am I ever enjoying it! Thanks.

lissavt · September 2006

Anyone ever been able to negotiate a lower payoff on being over mileage? I am almost 4K over - getting new vehicle this weekend from different dealer (and have my inspection in 2 days). Replacing the spare I had to use late this summer when my tire blew out to the tune of $140 bucks. Also I installed a car starter - anyone ever had to remover something like this before turning in - it definitely adds value to the car in these parts so I'm hoping not (worht almost 300 bucks)....Think I know now why I'm gonna buy my next car :confuse:

qbrozen · September 2006

i'd be really surprised it anyone was ever able to negotiate the over mileage. however, one thing to find out is what your car is worth as a trade-in. Maybe, just maybe, there is a slim chance that the car is actually worth more than the final buyout. If that is true, then you have a leg to stand on. If not, then they've got YOU over a barrel and they know it, so there is NO reason for them to give you a break ... unless you buy your new car from them.

steine13 · September 2006

I think you've got it wrong, qb.

If the car is worth more than the buyout, why should they make it cheaper??? They'd love to take it back.

If the car is worth a lot less, which happens frequently, they MAY negotiate the value. In that case, it is best if they do not know about the overmileage, because they'll know that at turn-in, they will receive payment for it.

Finally, the mileage charge is of course not negotiable. But the buyout price may be. This has been discussed many times, and the only consensus is this:

Some companies will negotiate, some won't.

Domestics are more likely to do so.

Honda/Acura are the least likely to negotiate.

You have to talk to someone with the proper horsepower, a regional manager typically.

You have to call with six or eight weeks to go on the lease, so the leasing company's employee will have a good handle on waht he will receive at auction. He might rather take $1,000 extra from his existing customer

Don't even mention the mileage. Don't let them know if you're massively over. Don't pretend it's only got 9k miles on it... in that case, they'd rather take it back...

Good luck,
-Mathias

qbrozen · September 2006

well, what I mean is, if the car is worth more than the buyout, then there would be no reason to turn it in and pay the mileage. Have the dealer buy it out for you (which of course they would love to do since they'd be buying it for less than its real trade-in value) and pay nothing on overage charges (or even get some cash back if you really want to wheel and deal). You could do this same thing at the dealer you are buying your new car from, though.

kandc · October 2006

I need advice. I leased a Mercedes ML 350 1 year ago for 4 years for $1100 a month under my company name. The total lease amount is $54,000 in which I put $8000 down and have paid easily $21000 already for this stupid SUV. Now I have this SUV for another 3 years what in the heck do I do? My credit score is 615 which in today's world means bad credit. Any advice would be great. I'm only paying this much because of my credit score. Can I trade down or trade it in on a lesser value car at mercedes or another auto maker?
Thanks ahead of time.
k

qbrozen · October 2006

HUH?

Why do you no longer want it?

Are you SURE this is a lease?? I find it so hard to believe that you are paying over $60k on an ML350. What was the original MSRP?? These things start at $40k.

What's the residual? money factor? how many miles per year are you allowed? did you roll ALOT of negative equity into it?

kandc · October 2006

Yes I had a lease with Chrysler so there was a balanced transfered over but this ML is fully loaded. I'm allowed 15000 miles per year. I put a down payment of $8000 and I pay $1100 a month for the ML so I figured I've paid 20'000 this year. I want out of this lease and was wondering if Mercedes lets you down size into another vehicle or is there a cheaper alternative.
k

kandc · October 2006

My credit is what got me in trouble. I don't want to refinance like the salesman said to do when my credit score improves which it has since I leased the ML I think my score was 570 then now it is different in all reporting agencies. 640 650 610 which I think my average when I bought my partner's mini cooper 2 months ago was 615. I'm just sick of paying this ML note every month?? What to do. I have 3 years left. Do they let you down size your car to a cheaper car to lower your note?
Thanks

steine13 · October 2006

I don't think you'll be able to get out, at least not without leaving behind a few pounds of flesh.

Just FYI, I looked at the auction numbers generated for 2006 ML350's ... it seems that with 15k miles or so, you're looking at anywhere from $35 to $37 wholesale value. Not a one of them has cracked $40k, even the super-low-milers.

In that sense, if you are on the hook for $60 and have paid $20, plus you owe them the interest -- high, naturally, given your credit -- then I don't see how you can get out.

Call them for the payoff -- "them" is not the dealer, but the lending institution. You owe THAT amount of money. Then figure that after you pay it off, you can sell the car to a dealer for $37, if you're lucky. The difference is what you have to come up with to get back to "zero" and get a reasonable loan for a reasonable car.

If that number is less than $10k, I'd be surprised, given what you've told us.

Keep driving the Benz and make sure nothing breaks out of warranty. Good luck,
-Mathias

kandc · October 2006

Looks like I'm stuck in this lease for the next three years. It's not that I can not afford it I just came to my senses. Oh well I guess this should increase my credit score so next time my car note will not be so high. Thanks Mathias,
k

qbrozen · October 2006

you absolutely don't want to roll negative equity again. You'll just keep digging yourself a bigger hole to get out of. So do as you say and just get through this lease, then you can start fresh.

chloetan · October 2006

Guys,
I just lease my G35 Coupe car for 1 month, it's a 12 mth lease and now I just found out I got layoff. I need to terminate the car lease cuz I need to leave the country for good, can I just pay off the whole lease of $5680 and I'm off the hook?

qbrozen · October 2006

I don't see why not. Hell, seems like a GREAT deal for Infiniti. They get an ultra-low mileage car PLUS all the lease payments for the next 11 months.

Just call and ask.

If they don't like that plan, then find out what the full payoff is and then find out what a wholesaler will give you for the car and see if that would work for you. You never know, it might be less than the $5600 in payments (although I kinda doubt that).

autoscoop · November 2006

The crazy thing about terminating a lease is that even if you make all your remaining payments - a leasing company generally will not allow you to turn in the vehicle early. It's stupid. It makes no sense - especially since the leasing company could wholesale it at a higher price now than in the future.

That being said - if you really want to get out of the lease - you have to buy your way out. That means taking the vehicle to a dealer (go to an Infiniti dealer) and having them give you a price for the vehicle. You will have to come up with the difference between the amount they offer you and the payoff to the leasing company.

Another option is - you could try a website like www.swapalease.com where someone else may want to assume your remaining 11 payments - and since you're willing to pay the leasing company - maybe you could offer an incentive to someone to assume your lease.

Good luck.

astegman · November 2006

I have a seemingly odd situation with Chase, and I'm wondering if anyone else out there has encountered the same. Here goes:

I leased a Lexus RX300 from Chase, and the lease terminated on August 24th of this year. I dutifully returned the car to my Lexus dealer on August 22nd. As per the terms of my lease, I am to be charged 15 cents per mile for going over the preset mileage, which in my case was 60,000 miles. I turned the car in with 71,495 miles - 11,495 miles over - which comes to the sum of $1,724.25. Also, my lease had a clause about another $300 "lease termination fee." So, altogether, I owe Chase $2,024.25. I was told the car would be picked up from the dealer by Chase and within a few weeks, I'd get my final bill from Chase.

To date, I've received nothing from Chase. We're coming up on 3 months. Now, I've been calling them on a regular basis to try to close out my account. Turns out the car sat on the dealer's lot for almost 2 months before Chase came to get it. Fine, whatever. But for some reason, it's just taking FOREVER for them to close the account and issue the final bill. After many calls, I did manage to reach an extremely helpful person in the "End of Term" office. As of today, she told me that my final bill would be....$504.00, which consists of the cost of some body work that was apparently done to the car (it did have some minor dings, and a very small chip in the windshield). I asked her twice, "Are there any other charges I will need to pay to Chase?" meaning, the overage/lease termination charges. She said no, just the $504.00. She said that the final paperwork will hopefully be done by this Friday, and that she'd fax me the final bill along with an official letter stating the account was closed.

Is this possible?????????? I will shamefully admit that I haven't looked at my lease agreement in the past four years - it's filed away at home in our filing cabinet - but you can bet I'll dig it out tonight and re-read it, fine print and all. I just cannot believe this is correct. I'm afraid that somehow, somewhere, Chase will still think I owe them the $2,024 (don't I?) but not tell me, and will mess up my credit report.

Sorry for such a LONG post, but I want to see if something remotely like this has happened to anyone else. :confuse:

PS - just coming back to add that maybe there are two separate Chase offices that will bill me? One for the overage, one for the body work? To be honest, I have over $3,000 set aside to pay Chase, but I'd sure LOVE to just pay that $504!! I was too chicken to ask the lady from the "End of Lease" office if I'd be getting another bill from some other Chase entity, but now I feel guilty.

kyfdx · November 2006

I had a Chase lease once... they are a little disorganized.

I wouldn't worry about your credit. If they get everything straight, they will certainly bill you for it. If they don't, be glad you only have to pay $504.

They probably have it wrong, but I surely wouldn't lose sleep over not getting billed for extra end-of-lease charges.

Just my $0.02
kyfdx

stkntraffic · November 2006

I can only say that I turned in a lease to Wachovia/Southtrust last year. They tried to charge me some bogus damage fee, which they promptly dropped when I told them I had about 100 digital pictures I took of the car the day before I turned it in. Then they kept sending a bill for the termination fee, which was part of the lease agreement. I blew them off for about 6 months, then negotiated the $300 fee down to $160.

So my point is, everything is negotiable. I wouldn't pay the $504 and then get stuck later on for the mileage. Demand a bill from them that has all of the charges, and then negotiate from there.

kg6c · November 2006

Hi Chloetan:
Sorry to hear about your job. I was wondering if you were interested in transfering over your lease. I am currenlty in the market for a short term lease.
Let me know.

KG6C

krista11 · November 2006

hbomber,

Have you heard of others who have been slammed with EWT charges from US Bank? I'm looking at leasing an Acura MDX. The mthly payment would be $29 less per month if I use US Bank vs. Honda Finance ($570 vs. $599). Honda has $1500 damage waiver, US Bank does not. Dealer warned me that banks are more stringent upon return. I am the one who asked for a lower money factor, based upon another dealer.

I can't tell if they want me to use Honda Finance, so they make more, or if US Bank truly is a bad way to go.

Thx.

sus3 · December 2006

My mother has a leased vehicle with GMAC; she has been off work on disability for 7 months and has just had to take retirement (she's 65) as she is not yet able to return to working full time. Her retirement income will probably not be enough to cover her monthly bills, including her $400+ car lease payment. Is there any kind of hardship lease termination we can ask for to end the lease, without paying the substantial lease payoff? Any suggestions? She'll need a vehicle to get around locally, but at a lower monthly payment. Thanks!

Kirstie_H · December 2006

I don't think so, which is why leasing is sometimes a bad idea - no way to easily get out of it if circumstances change. You might try sites like swapalease.com or leasetrade.com, which might suit your needs.

libby33 · January 2007

I have a leased Lexus that has reached the end. The purchase price is considerably less than current market value so I buying the vehicle. However, the dealer is loading my contract up with a $599.00 dealer fee. Does this sound legit? In FL, you have to go to the dealer for the buy-out. What other charges should I be aware of.

Thanks

Libby

tidester · January 2007

You may be interested in the Purchasing at the End of Your Lease discussion.

tidester, host

gianna · February 2007

I had never leased before this car, so really need advice. The lease on my Lexus ES330 terminates in July but I've been looking at the Camry Hybrid as a next car (even though I've been driving ES's for 15 years). I have no idea what to expect at the end of the lease--give them the keys and that's it? The agreement states that the "residual value" is $19,053. KBB.com lists my car at retail as $28,300, at private sale at $25,350, and as a trade at $22,600. Would I be ahead by purchasing at the end of the lease (I assume the purchase price would be the residual) and selling privately or otherwise (I never trade a car to the dealer)? The Lexus is in super, like-new condition, maintained according to the manual, and has only 13,445 miles. I'm thinking of terminating early to buy the hybrid since the Camry salesman said they could buy out my lease. What kind of bargaining position am I in with Camry if I choose to do that? Is it a bad idea? Thanks so much for any help y'all can give! I guess I'm just real scared of some horrible surprise at the end of this thing.

libby33 · February 2007

Whenever the value of the car is more that the buyout value, you should purchase the car. Otherwise you are giving away a huge bonus to the new car dealer. Contact the lease company yourself and ask how much your buyout would be right now. You do have to pay sales tax on the buyout amount, so add that to the purchase price for your total cost. If the car has low miles compared to the age, and the private party price is $25,350, then buy it and sell it privately. You will have $6,000 of equity in the new car!

geo9 · February 2007

You have to remember KBB and most of the other books
are waay out of line for somebody looking for trade
in value in the real world.................

Sure a dealer will most likely SELL it to you for $25k !

But as a trade in???????? Maybe $20k tops.........

You should post over in the Real World Trade Values
thread and ask or shop the car around at a nearby dealer.

g589mb · February 2007

I have 28 months remaining on the lease of my 2005 VW Toureg and am in desperate need to get out of it with out incurring the high termination cost. I was told that the dealership can buy back your lease with just a cost of a termination fee of about $350-$500, is this true? What other options do I have?

kdboothe · February 2007

I hope g589mb has a credible source...I have a 2004 Passat with 47k miles that still has 14 months left on a 48-month lease. My contract was for 48k miles. I am really interested in turning in the Passat early and starting a new lease on a Touareg. I was hoping the dealer would cut me a decent deal. Any advice? This is my first lease. :confuse:

gasman1 · February 2007

I suggest that you ask the dealership a question like this. You will get the answer whether you like it or not. IMHO, I can see the dealership taking a low fee if you're trading up (Passat to Tourag). I also see them hitting with full fee if you're dumping a lease and walking away from them.

joel0622 · February 2007

I can only speak for Ford Motor Company Leases and the process for terming early on those are as follows.

If you decide to term early then it is no different then trading a car in. The dealer finds out what the pay off on your lease is appraises the car and if you have any negative equity then it is payed by you with money down/rebates or rolled into the new loan.

Occasionaly they can look at the lease and if you are close to terming, lets say within 3-6 months. For example lets say the pay off is $20K and it is worth $15K, thats $5K negative you are responsible for. In that same scenario lets say your payment is $400 a month and you have 5 left. 5 X 400= $2000. The dealer rolls the $2000 and sends your last 5 payments to Ford, in effect paying out the lease. I don't reccomend this because all's you are doing is making all the payments but not getting the usage. I don't reccomend coming out of a lease early at all. It is rare that you come out financially ahead in any scenario. Leases are designed to go term. There are alway the exceptions though.

Also it varies from state to state but if you live in a state that only charges taxes on the trade difference you may not be able to get that when trading in a lease because technicaly its not your car to trade. But like I said that varies from state to state

kg6c · February 2007

Hey Everyone,
I needed some advice. I am planning on registering two leased card from PA in California, and I spoke with someone at DMW and they informed me that I have to pay a registration fees. I already looked on the dmv site and they have a section for "fee calculations", however, it is not suited for leased cars. Also, I called them up and they informed me that I would have to come in and speak to someone in person. My concern is that in leased cars you do not pay a lump sump in sales tax, and you actually pay a monthly figure in every payment. Could someone who recently moved to California with an out of state leased car please share their experiences.

Thanks

murrmutt · March 2007

Currently, I have a 2005 Acura MDX, 27,500 miles with 13 months left to go on my lease (36 month, 36k, AHFC). I have been presented with this scenario from a new employer:

A) $800/month to cover all vehicle expenses (payment, insurance, gas, tolls, maintenance, etc.) OR

Get a brand new company car with everything paid for (everything listed above), no headaches...

So, now I have the daunting task of trying to decide what to do to save me the most money. I will be driving on average 2500 miles per month (putting me at or around 65k at lease maturation). Obviously, I already know I will be losing money out of pocket one way or another. The $800 will cover payment, gas and insurance, but that's it. I would love to transfer the lease, but AHFC will not allow it (unless you know something I don't). So, the options that I see are:

- Trade the vehicle in now, and eat approximately $5-6k (I currently owe around 29700, trade-in value around 25)
- Turn the vehicle back after the lease is up and pay the mileage overage (@ $0.20 per mile, roughly $4.5-6k)
- Try to barter with the dealer to accept the car as a trade (my girlfriend is going to be purchasing a new vehicle soon) and pay less than what I would if I just traded it back to them
- Wait a few months and try to trade it in when I owe less, but I've put more miles on it (assuming I won't get charged for the overage on mileage when I trade it in)
- Sell my soul to the devil and break even

I know it's a difficult question to answer, but it's really put me in a bind. I've crunched the #'s over and over again in a extremely detailed spreadsheet and can't seem to make a decision. It seems from the values I've obtained from Edmunds if I wait several months, the reduction in value will decrease less than the amount owed, thus saving me some $$. Obviously, I want the fully paid for company car, but want to get out of this vehicle with the least amount of "lost flesh". Any suggestions/tips/hints??? Are my assumptions/estimations correct???
THANKS!!!!!

joel0622 · March 2007

Whats the payment on the Acura?

murrmutt · March 2007

The payment is right around $420 with Tax (FL). Also, my overage rate is 15 cents per mile, not 20.

Also, I'm sure there are other options, like selling my car to a private owner, but I have heard horror stories about people paying double sales tax...

As you can see, I'm up a creek without a paddle...and no floaties...

joel0622 · March 2007

The payment is right around $420 with Tax (FL). Also, my overage rate is 15 cents per mile, not 20.

So then today as we sit here worst case scenario you are $5460 out of equity. 13 payments X 420. I don't recall what you are buying but if you really want out of the lease early you can do it no problem. They roll $the remaining payments (less rebate or $ down) into the next car, mail a check for the 13 payments and you turn it in. Now keep in mind what you have just done is make payments on a car you won't be driving. But that is the end result on terming a lease early and paying your way out anyhow.

qbrozen · March 2007

Also, my overage rate is 15 cents per mile, not 20.

Sounds like your answer. You will only have to pay about $3500 in mileage at the end. I would go that route.

heck, by that time, the car MIGHT be worth more than the buyout, in which case you can trade it and pay less than $3500. But, worst case, its $3500. Definitely better than $5k+ now.

rprossil · March 2007

Here's another possibility: It sounds like you were going to help the girlfriend with a purchase of another vehicle soon - if this is the case, you could take the company car, sell hers and let her drive the Acura for the balance of the lease term and then she could get something else at that point. Obviously, I don't have all of the details re: her car and the state of your relationship, but it might be a way to not "waste" any of the balance of the lease. Or, would your employer do the car allowance through the term of your lease, and then get you a company car? Good luck.
Otherwise, I agree with qbrozen, and maybe they'd forgive some of that if you replace it with another Honda product.

murrmutt · March 2007

Those are all very valid comments and I appreciate them...just a few additional notes (to answer the comments posted by you guys..)

- the car allowance is pre-tax, meaning realistically I would only be getting 650 of the 800. Also, my estimated monthly expenses are around 900 (assuming the mileage per month and gas). Also, I would have to include maintenance (oil changes, tires, etc.) as part of the 'bottom-line' that I need to look at for the remainder of the lease.
- I actually calculated my mileage overage to be 4350 (29k miles at 0.15)
- the problem with my girlfriend taking over the payments is a complicated one, especially since I would have to pay double insurance (AHFC says that I would still have to have my full coverage since I am the lessee, plus add her to my policy to cover the vehicle if she drives it). So I would still be losing at least $200 per month on that. Not to mention having her drive it under my name is a headache I would rather not have :surprise:

My new company has agreed to give me the allowance for as long as I need (i.e. no set time frame). So, I'm thinking I'll try it out for a few months and if I'm putting on ridiculous miles, then I'll trade it in when my girlfriend gets her car and just eat the difference. Hopefully the dealer will cut me a little bit of a deal..

All I was trying to do was the math over the long run (i.e. if I lose $300 per month now plus mileage at the end versus $5k now), I just don't want to not trade it in soon and lose $3-5k now or wait it out and then I get stuck with 6-7k at the end of the lease...which is my luck. Also to see if you experts knew of any loopholes or tricks that I could use.

Thanks again!!!

clittle · March 2007

Guys,
I just lease my clk350 Convertible car for 11 month, it's a 39 mth lease and now I just found out I got layoff. I need to terminate the car lease cuz I need to leave the country for good, what are my options

Lease Termination Fees and other costs

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