Lease Termination Fees and other costs

Kirstie_H

The disposition fee was likely stated in the original leasing contract, so I can understand that.

Were the hubcaps missing? And is there a dent? If so, she is probably obligated by the leasing contract to pay for these items, regardless of whether she knew they were there or not.

However, the dealer can't resolve or really help you with any of this. The best thing to do is to work directly with the finance company (Toyota, I suspect) who should provide you with documentation on how they calculated the amount of property tax owed.

puffamp

Is anyone familiar with the Mitchell Guide? That is apparently how the bank estimated my $245 cracked hub caps that were on the car for 5 years that basically dry rotted to my 2002 Corolla. Does anyone know where I can get a copy of this to investigate for myself?

sganju

Hello,
I need some help here.

I have a 2005 Jetta GLI on a lease and would like to trade it in and BUY a used car-2005 Saab 9-2x Aero wagon w/7500 miles on it. I need more trunk space than what the Jetta provides. The price on the Saab is $18995.

The buyout on my GLI is $15570 and I have about $5700 left in payments at $265 p/month. The residual at the end if about $10K. The blue book value is about $16500 on it w/$26K miles.

The dealer is quoting me about $320 p/month on a 5 year loan at 8.9%-seems high, with $2500 down.

Might it be wise to get out now? or just wait until the lease ends or am I missing something completely?
I'm trying to do the wise thing here.

Any help is appreciated.
Thanks!

nigil

I am being told that if I sign a lease and make a minimum of three payments I can then buy the vehicle after the third payment? The dealer says the vehicle discounted very high in leasing and to take advantage lease the car and then buy the car after three payments. What's the scoop am I getting one pulled over my eyes????? sounds too good to be true am I right???

qbrozen

Possibly. Just what are we talking about?

With a lease, all finance charges are built in up front. So UNLESS there is a special discount for leases only AND it outweighs all the finance charges and inception fees that would be tacked on to a lease, then, yes, he's full of it.

I could see, for instance, in the case of Volvo, they are offering something like $10k off on non-volvo-backed leases. That's a big chunk of change. However, a non-volvo-backed lease comes with a pretty high rate of interest. I haven't plugged away at the numbers, so I don't know exactly how much that is. So the question comes down to, how much difference is there between the cap cost of such a lease and the selling price if I paid cash, and is that difference greater than all the finance charges and inception fees.

And, of course, you have to make sure there are no prepayment penalties if you chose to lease and then buy it out before lease end. (i wonder what the significance of 3 payments is???)

british_rover

Three payments is usually the minimum required for the F&I guy to get paid his commission on the financing. If you prepay the loan before making three payments the F&I guy gets charged back on the comission.

qbrozen

Ah. OK. So, really, the buyer isn't obligated to make those 3 payments. he could pay if off immediately, right? Unless, of course, he wants to reward the F&I guy.

british_rover

Perhaps it depends on how the arrangment is made with the bank/leasing company. Most of them do require three payments or they will charge back the commission on the loan.

The auto business is one of the few jobs where you could make a ton money one week and then end up owing your employer money a month down the road.

If you have a really good week as an F&I manager you might sell enough waranties, loans and other products to make a two or three grand one week. Now if a month or two later all of those people trade in their cars which cancels their warranties and ends the contracts on the loans you would be charged back on all of those commissions.

If you just happend to have a bad week that week and only made a less then a grand then you would owe the dealership the differance and they would take it out of your following paychecks.

nigil

Thanks for the reply, I knew it was too good to be true. I questioned the salesman further , then the manager had got involved, both big liars!!! Turns out I would have paid an extra 2000 when all said and done, I guess some dealers think customers do not know how to do math...

nortsr1

"I guess some customers do not know how to do the math"...Your guess is absolutely correct. Some do not do the math, all they care about is "How much is the monthly payment"!!!

barbarag

We recently leased a Ford F-150 pickup. Due to some personal changes in our situation, plus the fact that we are not crazy about the vehicle, we are looking for options to end the lease One of the options given in literature sent by Ford credit is to pay the difference between the lease balance and the wholesale market value of the vehicle which is an amount agreed upon between us and the dealer according to the literature from Ford. How would I get any idea of what this value might be before talking to the dealer so I might have an educated discussion?

Kirstie_H

You might try posting details about the vehicle in our Real-World Trade In Values discussion.

cme2c

I have a GMC Envoy Smartlease, payments 550/mo. 18 months left on the lease. I know I am upside down, but doing more driving than anticipated and want to get something more fuel efficient. I called for myself for a buyout price and was quoted 25,000. I talked with a dealer who called and was quoted by GMAC a buyout of 21500 outright or 7000 to just turn it in. Does GM give an incentive to their own dealers for buyout?

luna01

I am trying to get out of my 2005 Nissan Pathfinder. My options are a lease buyout, which puts my car payment a little higher than I want or trying to purchase a new car and rolling the negative equity into the new purchase. First, is that even possible ? Second, is it even smart ? And, what is this I hear about still possibly being responsible for the remainder of the lease payments ? ?

qbrozen

yes, its possible. no, its not smart. rolling negative equity is never a financially sound move.

Once you buy it out, there are no more lease payments.

why do you want out of it so badly?

luna01

For the most part, I like the vehicle, but Nissan is making it extremely difficult to just buy out the lease. They are telling me that I need to relinquish the vehicle to the original dealer until the check clears... and they get the title from whomever holds their titles, which is about a two week process. It sounds ridiculous to me. So, to save some aggrevation, I am thinking if it is just better to get rid of the SUV entirely... plus the check is from my bank, not a personal check...does this sound right to anyone ?

bobst

" I like the vehicle, but Nissan is making it extremely difficult to just buy out the lease."

If you like the vehicle, why are you trying to get out of the lease?

Before buying or leasing a car, you should make very sure that you like the car.

qbrozen

and why do you want to buy it out before the end of the lease? There is never any good reason to do this that I can think of. You are not saving any interest by buying it out early and, even worse, if you finance the buyout, you are paying double interest if you buy it out early.

lissavt

I have a '03 VW Jetta GL w/ not quite 44K miles on it...coming to the end of a 4yr lease. Payoff is approx $9800. Bluebook around $10,800. No issues during the lease but am balking at buying b/c the warranty is up. A few very minor scratches (less than an inch) - no other issues. Dispo fee of $350 if I turn it in. Would be waived if I re-lease another VW. I really want to get into a small SUV so I am shopping around.

Not a lot of disposable income on hand for $ down and my mother has suggested I feel out some local dealers to see if they would pick up my lease/vehicle. She had a good experience where she "traded" in her leased Chevy (at the end of the lease) for a new leased Honda - they drove it from NH to her workplace in VT, she gave them the agreed amount owed, and they took care of the Chevy......Anyone else had a positive experience like this??

qbrozen

I have traded in a leased vehicle before with no problem.

You just need to see if its worth it. Your mom gave you good advice. If a dealer will give you more than the buyout, GREAT! You have equity to apply to a new car. If not, then come up with the $350 and turn it back in and start all over again.

If you lease again, you don't need any money to put down. You obviously don't drive very much (11k miles per year), so another lease should be ok for you if that's what you want.

tamaraster

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

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

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

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

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

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

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

no problem. Good luck.

baggs32

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!!!! :blush:

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

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.