Lease Termination Fees and other costs

steine13 · January 2005

Sounds like a good plan... the GTO is pretty pathetic; 5 days before the end of the year, GMAC sent me a letter saying my GM Card earnings will be bumped to $5,000 (five thousand dollars) from $493.27 IF I buy a 2004 GTO, SSR, or some high-end Caddy (I forget) before today.

I did the math and could have had the car for a $10,000 discount... $5,000 GM Card + $5,000 rebate + "finance with GMAC" rebate... subtract $10 from the invoice price, and you're pretty much at your residual.

Yeah, they'll negotiate alright... I've never leased, but I'd do as Terry suggested.

I thought about leasing it, just for the heck of it, but the car doesn't do much for me, and between the insurance+tax+fees, it would have still cost some money... the "depreciation" would have been pretty much zero over 24 month.

-Mathias

authorize · January 2005

Hello all. I am currently 12 months into a 48-month lease for a Scion xA. I want to trade it in for another car. I was wondering what are some of the cautions that I should be aware of? Or if this is even possible? I'm very inexperienced with this. Any help would be greatly appreciated.

P.S. I plan on trading it in for a 350Z, if that makes a difference.

rroyce10 · January 2005

...... It depends on your pay-off, and then the miles, and then the condition of the vehicle .. and that would be the 36 remaining payments, plus the residual - minus the interest ...

48 month lease ..? .. The best thing you could do is call the lease company and get an exact figure .. right now these things are worth around the $10ish figure on a trade - long lease terms like 39/42/48 months, are usually the kiss of death ...

Terry.

CarMan@Edmunds · January 2005

Greetings authorize. I am sorry to say that it is usually fairly expensive to get out of leases well before their scheduled end dates. In order to do so, you need to purchase the vehicle that you are currently leasing from the bank that you are leasing it through. It often turns out that it costs more to do so than your vehicle is worth on the open market. Furthermore, many banks expect consumers who end their leases early to still make all, or at least a significant portion of their remaining lease payments. As you can see, this can get very expensive.

You can determine approximately how much it will cost you to get out of your current lease by comparing its purchase price to its value on the open market at this time. You should place a call to the bank that you are leasing your vehicle through to find out its exact price. Once you know exactly how much money it is going to cost you to buy your leased vehicle you need to compare it to its current value on the open market. You can find out approximately what your vehicle is worth by looking up its Edmunds.com True Market Value in the Used Vehicle Pricing section of this site. You also may want to stop by the following discussion: "Real-World Trade-In Values". The previous poster, Terry, frequents that discussion and he is often kind enough to give community members who give him an accurate description of their vehicles with his opinion on their value. Don't forget to check to see if you are still on the hook for your remaining lease payments. The difference between your leased vehicle's current value and how much it will cost you to buy it plus any remaining lease payments that you are obligated to pay will equal the cost of getting out of your lease right now. You may find that you are better off waiting until you are closer to the scheduled end of your lease to get another new vehicle.

Car_man

Host

Smart Shopper Forum

big daddy1 · January 2005

Hi,

I am new to this forum and was hoping to get some help or at least some direction. I have a 2002 bmw 330ci, that i've leased. I have a 36 month lease of which I have 30 more to go. I've had a recent life change and need a bigger vehicle. Looking at a chevy tahoe. I thought of calling my bmw salesman and discussing it with him and wondering if there a way to terminate early on the lease? Do you haqve any suggestions? you seem very knowledgeable.

kyfdx · January 2005

Your BMW salesman really has nothing to do with your lease.. The bank that you send your lease payment to, owns your car..

Your car has a payoff amount, just like an auto loan.. Call the bank and find out what it is... The difference between that figure and what you can sell your car for, is what it will take you to get out of your lease.

It looks like you leased a used car.. I hope it is at least a CPO car.. If you have only made six lease payments, you are going to take a bath trying to get out of it..

Your other option is to try a service like swapalease.com... You may be able to get someone to assume your lease, if you payment is favorable..

Is the lease through BMWFS? And what is your monthly payment?

big daddy1 · January 2005

Hi Kyfdx,

It is a cpo. It is throgh bmwfs. my monthly is $325, with a $6,000 downpayment.

-question for you. Is swaplease a viable method?

kyfdx · January 2005

Well... you sure wouldn't have any problem getting someone to take over your lease at that payment... But, I doubt you will recoup much of your down payment....

Think really hard about whether you actually "have" to have a bigger car.. Leasing contracts are very expensive to get out of... $6K down plus six payments of $325 so far... If all you could manage was to get someone to take over the lease, you'd be out $1325/mo for the six months you've driven...

big daddy1 · January 2005

Thank you for such a prompt reply. I appreciate your insight into this. Truth be told...I used to lease a chevy avalanche. at the end of my lease

I wanted a nicer vehicle. I liked the 330. how it drove and felt. over this period of time. I came to realize that I was impetuous in this lease. I was more comfortable in the avalanche. I am 6 foot 8. I have been debating a way out of this vehicle and lease a truck again. So you've given me some food for thought.

Would you know if swaplease has good results?

thank you again.

kyfdx · January 2005

Swapalease is the largest of the lease take-over companies... If your lease is a good deal, then it will go pretty fast.. At best, you might get someone to take over your lease, and maybe give you $1500 upfront.. Just a guess on my part, though...

Check out their website... you can pull up your model car, and see what the competition is..

big daddy1 · January 2005

Thank you.

I appreciate all of your help.

Good night.

rroyce10 · January 2005

.. ** with a $6,000 downpayment ** ..

               Yikes.! ... $6,000.?

          Leases can be tricky little devils .. putting large amounts of money down only achieve one thing: lowering the payments - nothing else, the money evaporates after that ..

              Unless you can get back $3,5/$4,000 on the lease, you might be better off just driving the vehicle until the end .. you paid your money and "bought" your payments down, you might as well enjoy the ride ..

                                  Terry.

big daddy1 · January 2005

If I go the swapleas eroute does it reflect badly on the credit report? Also...am I liable for the lease once it is finalized through swaplease?

Thank you.

BD

ej1111 · January 2005

i have a lease with chrysler financial which has about 15 months left. based on kbb values it seems i can sell for about what my payoff amount is. lucky, as i put no money down and it works out that way! i cant seem to find any information on how to terminate with chrysler or if there are any addiional fees. does anyone know?

thanks!

-h

kyfdx · January 2005

BMWFS releases you from all liability, once the transfer is made.. Not all leasing companies do this.. If they didn't, I wouldn't do it.. Terry had some good advice.. The best way is to keep it and keep paying for it..

It should not affect your credit report..

regards,

kyfdx

big daddy1 · January 2005

Thanks to you and Terry. I think I'll follow that advice. It's sound.

BD

Kirstie_H · February 2005

Make sure you're clear about what "payoff" means, and that you're not confusing "payoff" with residual value. They are two different numbers. Often, to get out of your lease early, you will need to pay the residual value PLUS all remaining lease payments.

ej1111 · February 2005

no, i called chrysler and got the buyout, which is the residual + payments. Im wondering if anyone has experience with chrysler buynig out of the lease early and if there are any fees that anyone knows of. Plus what the best way to do it is.

Appreciate it!

maxwellzx · February 2005

I am turning in a lease and have no records of Oil Change, I performed the Oil changes my self and threw away all the Receipts in a during a move. The vechele is in excellent condition and looks very good. I am within 30 miles of limit. What kind of fee can they apply at the end of lease?

kyfdx · February 2005

In general, they don't check for scheduled maintenance.. If it runs well when you start it up, and the oil and filter don't look like they came new with the car, you are in good shape..

Kirstie_H · February 2005

I'll add to that - it's fairly easy to tell if a vehicle has been abused or neglected. If you did neither, you should be fine.

steine13 · February 2005

"It's fairly easy to tell if a vehicle has been abused or neglected."

No it isn't.

Gimme a car on a 36k lease, I'll change the oil twice and generally drive the snot out of it.

Then I'll change the oil again a week before turn-in, have it detailed, and put on new tires.

How would you tell....?

-Mathias

Kirstie_H · February 2005

Someone who didn't bother changing the oil ever is going to then splurge on new tires?

People who don't bother to change the oil probably don't take car of the vehicle in other ways. I mean abused to the point where it's going to cost you at lease turn-in. If you bring in a car that's badly out of alignment or has other unaddressed mechanical issues, it should be obvious. If your engine is gunked up, that should be clear too.

Now, if they don't bother doing even the most basic mechanical inspection at the end of a lease, the dealership deserves what they get.

jwilliams2 · February 2005

Kirstie, for most lease returns it is the leasing company (or their representative) that does the inspection, not the dealer. The leasing company decides if there is a charge for damage or excessive "wear and tear". The car dealership's responsibility is to provide a place to drop off the car, unless they decide to buy the car from the leasing company (some brands have programs that make this mandatory). This is a separate transaction. Then a thorough inspection is obviously in the dealerships best interest. For many brands, if the car is trashed, and the dealer has no interest, the car goes to auction.

kyfdx · February 2005

No, you wouldn't... You'd maintain it just like it was your own.. I feel pretty confident in that assessment based on your posts here on Edmunds.. (also, I am a hunky looking guy.. 6'5" and 220 lbs of pure muscle.. but, I digress).

People that don't maintain their cars treat them the same, whether they buy or lease.. And people that DO maintain their cars, are the same way... Otherwise, why maintain a car you own, if you know you are going to trade it in three years?

Now, if the check engine light comes on the day before you are scheduled to turn it in.. you might disconnect the battery to re-set it.. ;-)

But, in general, unless you are buying from someone you know well, any 36K mileage car is likely to be as good as any other, whether it was bought or leased...

regards,

kyfdx

Kirstie_H · February 2005

OK, gotcha - I guess I didn't compute this. We're on our very first leased vehicle.

Kirstie_H · February 2005

Well, steine13 wouldn't, but a hypothetical steine13 evil twin would.

kyfdx · February 2005

That is true.. but, I don't think it has anything to do with him leasing the car... Evil is just evil... ;-)

rroyce10 · February 2005

.... **People that don't maintain their cars treat them the same, whether they buy or lease.. And people that DO maintain their cars, are the same way...**

                Bingo.! .. it makes no difference if they lease, buy or rent ....

               By the way, your new Bow Flex is in the mail ..l.o.l....

                       Terry.

steine13 · February 2005

"Now, if the check engine light comes on the day before you are scheduled to turn it in.. you might disconnect the battery to re-set it.. ;-)"

What? Moi? Je?

Shocked I am...

"But, in general, unless you are buying from someone you know well, any 36K mileage car is likely to be as good as any other, whether it was bought or leased..."

Agreed. My point was simply that you cannot just look at a car and tell what shape it's in. That's why I'm comfortable buying 120k mile cars, and 10k cars, but with 35k cars, I get a little nervous unless I can see the records or can at least look into the valve train and see everything is clean. Leased, bought, or 36k mile test drive, I don't really care.

I also think that most times, the general condition of the car gives you a clue as to basic maintenance, but it's a dangerous assumption.

There is NO way to look into a Ford Ranger engine, or a Toyota V6, and tell if it's all gunked up. You have to take people's word for it.

At the auction I guess it's OK; if you buy 300 cars a year like *some people*, it all averages out.

I thought kirstie was getting a little overconfident, and we can't have that here. :-)

-Mathias

Kirstie_H · February 2005

Moi? Overconfident? My ego is self-inflating for your convenience

I think I was overconfident in the "system." I figured these cars were pretty thoroughly checked out at lease turn-in. Sounds like they just look for obvious flaws. Good news for the family kirstie_h as the leased vehicle isn't getting as much attention as it should, IMO.

kyfdx · February 2005

Now, if the check engine light comes on the day before you are scheduled to turn it in.. you might disconnect the battery to re-set it.. ;-)"

Yeah.. don't ask me what brought that to mind..

crookster · February 2005

I have a 2004 Jeep Grand Cherokee Limited on a 39 month lease with 24 months left and I really need a bigger truck and I am thinking about a Escalade Esv, Navigator, or Expedition. Does anybody know any Caddy, Ford or Lincoln Mercury dealership (in NY) that will buy this out and if I find a dealership what would I have to pay. Or if I decide to just get rid of the truck what would I have to pay. My payment is 525. Thank You

Kirstie_H · February 2005

Start by checking out this post:

Car_man, "Lease Termination Fees and other costs" #108, 6 Jan 2005 7:16 am

You will likely have to purchase the vehicle at the residual value, PLUS make all remaning lease payments ($525 x 24 = $12,600).

erik71380 · February 2005

My question is this --

If I buy my leased car (Nissan Murano) at the end of the lease and I am over my milage limit, will I still incur the mileage penalty? I'm assuming the answer is yes, but I wanted to check.

Thanks in advance!

-Erik

kyfdx · February 2005

Actually, the answer is no... If you pay the residual (plus disposition fee, if applicable) and sales tax at the end of lease term, then no mileage penalty applies...

erik71380 · February 2005

Well, that's cool....didn't know that! I would think it was another place for the dealer to make money.

kyfdx · February 2005

Once you lease the car, the dealer is out of it... You should be dealing directly with the leasing company.. They may even sell it to you for less than the residual amount, if you ask... Just don't tell them that you are over on your mileage... and don't involve your dealer at all.

regards,

kyfdx

erik71380 · February 2005

Thanks, y'all! I appreciate it!!

dallas_sam · February 2005

I leased my car through a third-party leasing company. The lease ended up being through FELCO. When it came due this month, I was told to turn it in at a local auction house. I called them and asked to have it inspected prior to turning it in so I could have the opportunity to fix anything I would be charged for. They said that was impossible, I couldn't even be present.

Long story short, I was faxed the damage report yesterday. The auction house's inspectors list the damage at $1600, all for scratches and dings (nothing mechanical, mileage or interior related). I had the car professionally buffed at a body shop prior to turning it in and there wasn't a scratch on it. I also took it to a friend in the leasing business who inspected it and said it was "mint" and saw nothing I could be charged for. My question is do I have any recourse? Can I somehow dispute these charges? I didn't take pictures before turning it in, I just assumed they'd be honest. Big mistake I guess. Also, I was about 17k miles UNDER my mileage, does that give me any bargaining power?

superman5 · February 2005

my lease is ending in 10 months, does the car must be returned w/ original tires? same brand/type? if not, what is the penalty? the leasing company is chase...thank you in advance

chell2 · February 2005

I have a lease that expires June 2005. I have been approached by the leasing company to "buy out" the vehicle now. The company will finance the "buy out". I have been told that if I do not purchase the vehicle, and turn it in, I will be responsible for paying $7,000.00 in costs for being over the mileage. What if I do not have the money to pay $7,000.00? Can that be negotiated?

kyfdx · February 2005

How far over the allowed mileage are you?

They may negotiate the purchase price, but they will never negotiate mileage charges.. Which is why it is never a good idea to let them know you are over the mileage limit, if you are trying to negotiate the purchase...

grantchstr · February 2005

Does Volvo Finance have residual insurance?

johnwill · February 2005

My wife has to replace two front tires on her mid-lease Honda. No problem. But, the tire salesperson at an indy shop said she has to replace with exact same brand and model or, at lease end, she will be charged extra. Now, of course the tires they say she needs are $35 more each than the next tier. I say that the only requirement at lease end, to avoid charge, is the wear requirement (tread no less than 3/32) and to of course have a good brand and same size quality etc tires on vehicle. Tire salesperson says to replace with exact Bridgestone model vs a BF Goodrich model ($120 vs $85).

Is it me? Thanks a lot!

kyfdx · February 2005

Any major brand will do... But, all four tires have to match.. Unless you think you will be replacing the rears before the lease is up, stay with the same tires...

If you rotate, one pair shouldn't be wearing out before the other...

johnwill · February 2005

Thanks kyfdx! That explains it well.

theotherbear · February 2005

First off, I suffered a great personal loss nine months ago, and I did what everyone says not to - make a major financial commitment. So, color this post with a healthy shade of insecurity and potential buyer's remorse.

I signed a lease two days on an 05 Dakota SLT 4x4 - 39 months, $419/mo, and they made my first payment, no money changd hands. My '97 Dakota trade was $3500 upside down, 158k miles, $368/mo, and had 18 months left on the finance, so my real bank commitment was only about 20 additional months. My credit is challenged, but improving.

I got 12K miles, afraid I'll go over (I do alot of long rafting trips). Are there any tricks to staying within miles or avoiding the penalties at lease end?

"Normal wear and tear" scares me a little - in five years, all I really did to my last vehicle was dent the rear bumper a little, and minor scratches. Assuming I remain that careful, should I be okay at inspection time?

The stereo stinks - if I replace the speakers without cutting any plastic or metal, would I need to replace the old ones at lease end? What about a new head unit?

I'd also like to put a diamondplate bed lip on (my frame sits atop my bed). If I let it go with the vehicle when I turn it in, will I get dinged for that?

Finally, I'm trying to figure out how successful swapalease.com deals are, in case I lose my job or something. It would make me feel better if I thought swaplease was a potential "out" for me down the road. I have another vehicle, I'm not too worried about being car-less, but I AM worried this lease deal was a catastrophically bad idea.

Thanks in advance to responses to all or any of these inquiries.

bc1961 · February 2005

I've leased with Ford for ten years and recently leased a 2005 Chrysler Pacifica Touring Edition for 39 months. In the past my ford contracts under the "other charges section" had always been marked N/A. Stupid me overlooked this section only to realize when I got home that a $300 charge was there instead of N/A. Basically the contract says that if I don't buy the vehicle at the end of the lease I will be charged a $300 "turn-in fee". My question is since the finance manager didn't explain this to me can I dispute this fee or negotiate a lesser amount now at the beginning or at the end of the term ? Is this type of fee common or just a scam? If I was planning to buy in the first place I wouldn't be LEASING!!!
Any feedback would be appreciated!
Signed: Pissed-Off In PA

fish8 · February 2005

If the fee is on your lease agreement, you have no grounds to dispute the charge. I mean, you can dispute it, but no one will listen.

Lease Termination Fees and other costs

Comments

Helpful Tools

Most popular vehicles