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Lease Termination Fees and other costs

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  • dwynnedwynne Member Posts: 4,018
    Interesting question, isn't it?

    My thought would be that on a single payment lease the early buy out price would just be the residual. Since there are no payments then there is nothing to adjust - you can buy it at lease end for $x or buy it now for $x - same price.

    Since you have already paid for the principle and interest on the depreciation up front, the only adjustment to an early buyout COULD be some sort of refund or adjust for giving them the rest of the cost of the car early. So you could "in theory" buy it out now for less than the residual...
  • delta737hdelta737h Member Posts: 626
    edited September 2010
    dwynne,

    *Theoretically, the single payment amount equates to the selling price (not the adjusted cap) minus the present value (pv) of the residual based on some discount rate established by the fund provider. What you pay with the single payment option is the present value of the depreciation and nothing more. So, you're not pre-paying interest at all. Why would you? You're not borrowing any money for which which interest would be charged. Interest only applies in those instances where sums are advanced in exchange for annuitized periodic payments (principle plus interest). Or, in those cases where sums are advanced in exchange for a lump sum payment (principle plus accrued interest) at some future point in time.

    The residual is the estimated value of the vehicle at lease end. If you want to slide the residual along the time-line toward the present, then you must make a time-valued adjustment using an appropriate discount rate. It's like asking what $20,000, three years from now, is worth today. If the per annum discount rate is 3%, then $20,000 three years hence is worth $18,303 today (i.e., the pv of $20,000 discounted at an annual rate of 3%).

    I know this is rather far-fetched but, to illustrate another point, let's suppose you decide to purchase the vehicle immediately after you pay the single payment option. Your buyout price would be....

    (Selling pricing - pv of the residual) + pv of the residual + purchase option fee = selling price + purchase option fee. The parenthesized quantity reflects the single payment option amount.

    Because the purchase option was exercised at lease inception, it's very likely that the fund provider will waive the purchase option fee and so your buyout would simply be the selling price at lease inception which is exactly what one would expect to pay... the Agreed Upon Value.

    Now, let's examine the other extreme...

    At lease end, your buyout price is simply the residual value plus the purchase option fee. The residual reflects the value of the vehicle at lease end.

    If you terminate your lease somewhere between lease inception and lease end and, if your lease agreement allows you to buy the vehicle at any point in time, then your buyout is the pv of the residual at that point in time plus the purchase option fee. So yes, dwynne, you're absolutely right when you say...

    "you could "in theory" buy it out now for less than the residual"

    BUT not because of a refund adjustment.

    You're not entitled to a refund of any kind. The only way that you would be entitled to a refund would be if you prepaid the interest. In that case, you would be entitled to the unearned interest charge. But again, interest is not prepaid in a single payment option as indicated above. To reiterate, the only thing you're paying is the present value of the depreciation.

    Remember that the lease balance (buyout) is the present value of the remaining payments PLUS the present value of the residual. But, there are no remaining payments in a single payment option and there's nothing to adjust. Therefore, your buyout is just the pv of the residual plus the purchase option fee.

    Of course, there are taxes and other government/fund provider transaction costs that factor into the buyout that I've ignored in this discussion.

    Cheers!

    John

    * In practice, many fund providers use a discounted money factor to compute the discounted payment which, in turn, is multiplied by the term of the lease to determine the single payment option amount.
  • jwilliams2jwilliams2 Member Posts: 910
    My suggestion would still be to contact Mercedes-Benz Financial and discuss it with them. They can surely tell you what the Single Payment Lease-Early Purchase Option Price is.
  • delta737hdelta737h Member Posts: 626
    edited September 2010
    jwilliams2,

    You can do whatever you like. But, I would never rely on anyone, including a fund provider, to tell me how anything is calculated because my math skills are exceptional. Furthermore, I don't need someone telling me how to interpret a lease contract as I didn't get my IQ out of a Cracker Jack's box. Math skills of most Americans are absolutely horrendous. In fact, they're downright disgraceful! In most cases, the person you'd be talking with at MB either won't know or, they think they know when, in fact, they often don't. Most likely, you'll be speaking with a customer service rep; not a financial mathematician or analyst. So, how will you know whether or not the buyout figure given to you by MB is, indeed, correct? Just trust them? Yeah, right! Fund providers make mistakes like there's no tomorrow. I've experienced it several times with early term lease buyouts and adjustable rate mortgages and have threatened class action lawsuits. When I threaten a bank with a lawsuit, particularly in the Cleveland, Ohio area, they generally listen because I've sued four banks and have prevailed each time. Incompetence in the U.S. is running at record breaking levels. The best thing to do is to read your lease contract's early term clause, apply mathematics and logic, and you'll arrive at the correct answer. I've done this for many years and it has always worked well for me.

    John
  • jb_turnerjb_turner Member Posts: 702
    A lessee may opt to make one single up-front payment, thereby realizing a savings on interest through a discounted interest rate. So in other words you can buy out your lease.
  • delta737hdelta737h Member Posts: 626
    And your buyout (lease balance) is the present value of the residual for single pay options.

    John
  • kyfdxkyfdx Moderator Posts: 236,681
    .. Single-pay leases are treated as though they are paid monthly... They calculate the lease with a discounted money factor, and then add the payments up, and that's your single-pay payment..

    In event of early termination, the payoff of the lease is calculated just as if you were making the payments monthly, and the payoff number will reflect that (whether through accident or trade-in, etc.). Also, the lessee is credited back for payments already made, but not applied to the payoff.

    In simple terms, the early payoff of a one-pay lease is no different than if you were making the payments monthly...

    Disclaimer: This is generally how one-pay leases are calculated and administered. There may be exceptions.. though, I haven't run across any.

    regards,
    kyfdx

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  • delta737hdelta737h Member Posts: 626
    kyfdx,

    In my footnote in post #1076, I indicated that many fund providers use a discounted money factor to compute a discounted payment and, multiply it by the term of the lease to determine the single pay option amount. As you know, the early term clause in the lease agreement is the final authority. I have seen lease agreements, some years ago, where the payoff of a single pay option is exactly how I described it in post #1076. If my memory serves me correctly, I believe both GMAC and FMC were doing it the way I described. This is not surprising as both use interest rates in lieu of money factors to compute payments. However, I suppose they could have just as easily used a discounted interest rate to compute a discounted payment, multiplied by it the term, to determine the single pay option. And, then, compute the lease balance as though payments were made monthly. This, of course, would be mathematically inappropriate and grossly unfair to the single pay customer for obvious reasons.

    If fund providers are, generally, calculating single pay option lease balances as though payments are paid monthly, then their methodology is both mathematically inaccurate and actuarially unsound. Such practices continue to be a problem with leasing as there is no standardized methodology for computing payments or lease balances. For example, Fifth Third Bank once used an interest rate to compute lease payments as though they were ordinary annuities instead of an annuity due; GMAC still discounts the residual one month nearer to the present thus inflating the monthly lease payment slightly; FMC used to add 0.00110 to their tabled CapFactor to account for their industry high acquisition fee so that for every $1,000 of capitalized cost, consumers would pay an additional $1.10 each month just to cover Ford's acq fee. And so, we have fund providers going in many different directions... not a good thing!

    Inappropriate or skewed computations only serve to justify the rationale for incorporating standard computational methods in the Federal Reserve Bank Board’s Regulation M paralleling those of Appendix J found in its Regulation Z cousin.

    Unfortunately, all of this irregularity proves that people must be subjected to laws and regulations; otherwise, they'll choose to do the wrong thing by preserving their own selfish interests instead of preserving those of the the greater good.

    And, please, don't respond by telling me that "you don't own the vehicle and they can do whatever they want" because that's a very poor excuse for not doing the right thing.

    John
  • eastbruceeastbruce Member Posts: 5
    This may seem like a dumb question, but here goes:
    I have a 39 month lease with a mile limit of 8000 per year. What is my total mileage limit?

    Since it is for 3 years plus 3 months, will my limit be 8000 per plus the three months or do they only count years?
  • sebring95sebring95 Member Posts: 3,241
    Should be 26,000 miles. 8,000 / 12 x 39.
  • eastbruceeastbruce Member Posts: 5
    Thank You sebring95. I now have 24,000 miles and if I'm real careful I hope to stay under that! I wonder, do car dealerships every let you buy more miles after the lease agreement? Or if that would be cheaper than paying a penalty?
  • sebring95sebring95 Member Posts: 3,241
    I've never seen a contract that would let you do that. Are you planning to turn the vehicle or buy-out the lease? If you're going to buy it out you shouldn't have to pay the mileage penalty. There's also a chance the vehicle might be worth more than your buy-out at the end and you could possibly trade it and you wouldn't get hit with a penalty.
  • eastbruceeastbruce Member Posts: 5
    It's a 2008 Saturn Vue and I don't know what the impact of Saturn closing down will be on the value. At any rate, I do plan to turn it in and lease another Make. (haven't decided yet what Make) If I go with some kind of GM built vehicle, there is a good chance they will forgive the miles. I hear the penalty is around 25 cents a mile- but don't know that for a fact.
  • sebring95sebring95 Member Posts: 3,241
    All that should be disclosed in the contract. $.12-.15 is more typical for mileage charges. GM leases can be a little goofy sometimes and you almost have to deal with a GM dealer when trading/selling to get the best buy-out/trade.
  • eastbruceeastbruce Member Posts: 5
    Thanks sebring95 - I appreciate your advice.
  • delta737hdelta737h Member Posts: 626
    edited September 2010
    The single payment option lease is a lease where a lump sum payment is made at lease inception in lieu of monthly payments. Invariably, the question arises as to (1) whether or not this is a good idea and (2) does it save money. The answer to both questions is probably not. Here’s why…

    First, a car is a depreciating asset and is purchased for consumption; and so, it's an expense and not an investment. No savvy investor would ever invest in stock that they know will depreciate or lose value over time. Second, very little savings, if any, is realized with a single pay option. In practice, many fund providers use a discounted money factor to compute a discounted payment which, in turn, is multiplied by the term of the lease to determine the single payment option amount. The lease balance, at any point in time, is the present value of the remaining imaginary payments plus the present value of the residual. And so, many fund providers compute lease balances as though a single option payment customer makes monthly payments and that’s the shocker! Suffice it to say, that this method is grossly unfair to the consumer. Those fund providers that are calculating single pay option lease balances as though payments are paid monthly are engaging in methodologies that are both mathematically inaccurate and actuarially unsound because it unnecessarily and unfairly forces consumers to incur an additional cost equal to the entire present value of the remaining phantom lease payments or, some portion thereof. Instead, the fund provider should issue a credit to consumers for the unused depreciation which equates to the present value of the remaining annuitized monthly payments using the constant yield rate implicit in the lease. The present value of the annuitized payments is the same as the annuitized single payment balance at the point of early termination. My best guess is that some providers reimburse and some don't thanks, in no small measure, to existing laws that must be changed. Talk about financial reform... good grief! :cry:

    Theoretically, the single payment amount should equate to the selling price minus the present value (pv) of the residual based on some discount rate established by the fund provider. The single payment option price should be the present value of the depreciation and nothing more.

    To illustrate another point, however far-fetched it may be, consider purchasing the vehicle immediately after you pay the single payment option. Your purchase price would be....

    (Selling pricing - pv of the residual) + (pv of the residual + purchase option fee) = selling price + purchase option fee.

    The first parenthesized quantity reflects the single payment option amount while the second represents the amount owed in the case of a buyout.

    Because the purchase option is exercised at lease inception, it's very likely that the fund provider will waive the purchase option fee and so you would pay the selling price or agreed upon value which is exactly what one would expect to pay. The other extreme is where one buys the vehicle at lease end. In this case, your buyout is simply the residual value plus the purchase option fee. Remember that the residual reflects the value of the vehicle at lease end.

    Finally, let’s examine what happens if you exercise your purchase option somewhere between lease inception and lease end. If your lease agreement allows you to buy the vehicle at any point in time, then your single payment option buyout should be the present value of the residual at that point in time plus the purchase option fee. Regardless of when you elect to exercise your purchase option, your single payment option buyout should always be the lease balance (i.e., present value of the residual) plus the purchase option fee plus taxes plus other transactions fees if applicable.

    To summarize, in the case of monthly payment leases, the lease buyout is the lease balance (the present value of the remaining payments PLUS the present value of the residual) plus purchase option fee plus taxes plus transactions fees. However, there are no remaining payments in a single payment option lease and so there is nothing to adjust. Therefore, the single payment option buyout is just the present value of the residual plus the purchase option fee plus taxes plus transactions costs.

    If you’re returning your vehicle and you terminate early, your early termination liability, whether you pay your lease monthly or whether you paid a single payment upfront, is determined by the early termination clause in your lease agreement. With single pay options, you're not entitled to a refund of any prepaid interest because there isn’t any interest and, therefore, no unearned interest (lease) charge because the only thing you've paid is the present value of the depreciation. However, you are entitled to the unearned depreciation which equals the annuitized balance of the single payment at the time the lease is terminated.

    The flawed practice of computing discounted payments to compute lump sum lease payments and ensuing lease balances continue to be a problem in the leasing industry as there is no standardized methodology for computing payments, monthly or otherwise, or lease balances for that matter and so, there is no consistency whatsoever. :confuse:

    Inappropriate or skewed computations only serve to justify the rationale for incorporating standard computational methods in the Federal Reserve Bank Board’s Regulation M paralleling those of Appendix J found in its Regulation Z cousin. Unfortunately, such irregularities prove that people must continue to be subjected to laws and regulations; otherwise, they'll choose to do the wrong thing by preserving their own selfish interests instead of preserving those of the greater good.

    Fortunately or unfortunately, depending upon one’s perspective, the bottom line is that the early termination clause in the lease agreement is the final authority. Always read your lease agreement, particularly the early term clause, if you plan to terminate your lease early so that there are no surprises. :)

    John
  • dwynnedwynne Member Posts: 4,018
    Read your copy of the lease contract. It should clearly spell out what the allowed miles are. I agree with user sebring85 that it SHOULD be extra for a 39 month lease, but I would not count on it. Is the lease with GMAC or a 3rd party lease bank?

    I would not count on anyone forgiving any miles base on your next car lease or purchase. The contract calls for a penalty if over miles and you should plan on them enforcing it.

    What is true is that now or any time on your lease or at the end if you can get a dealer to pay you more or equal to the buy out price (at that time) you can get out of the lease without any penalty. You can trade it or just sell it to a dealer, like CarMax or AutoNation and not worry about the miles. You can look on their web pages to see what they get for comparable Vues to get an idea of what they will pay. Figure on $3,000 to $5,000 LESS than they sell for is what they will offer then get a current buy out price (not including tax) from your lease bank.

    Be real careful with a "trade in" or "we will take care of the over miles" kind of deal if dealing with another GM dealer. The dealer may just say that but in reality just turn your car in for you, then next thing you know you get a bill from the lease bank for over miles or damage or both.
  • dwynnedwynne Member Posts: 4,018
    There must be some reason for a one payment lease to exist, I assume it makes more sense for a company or corporate lease due to some tax advantages or something.

    I got a big bonus from work one time and I looked ONCE at a single payment lease. In my case the savings compared to the standard lease with monthly payments was so small that it would have been silly to pre-pay the lease. Maybe for some company or business but I have never seen enough of a discount to make me want to spend all the money up front.

    You also have to worry about your "investment" if the car is a total loss. Your insurance pays off what the lease bank says is owed on the car (the residual) - are they going to pay you anything?
  • delta737hdelta737h Member Posts: 626
    edited September 2010
    dwynne,

    Your comment...

    "You also have to worry about your "investment" if the car is a total loss. Your insurance pays off what the lease bank says is owed on the car (the residual) - are they going to pay you anything?"

    You're right! The bank receives the unpaid lease balance plus any difference between that and the ACV (assuming the ACV exceeds the lease balance which it surely will).

    Because it's still an early termination, the fund provider should issue a credit to the lessee for the unused depreciation which equates to the present value of the remaining annuitized monthly payments discounted at the constant yield rate implicit in the lease. Unfortunately, this is the only thing you'll likely get. Your GAP coverage is irrelevant because the ACV exceeds the lease balance. So, you potentially lose the difference between the ACV and lease balance less the unused depreciation credit.

    And so, I agree with you. I really don't see any real advantage to the single pay option. They're just too "risky".

    John
  • mehrishismehrishis Member Posts: 13
    My lease is getting over in march of 2011 (toyota highlander limited 2008). Residual value is 24 K and change. Total price , at the time I negotiated down to approx 35K. I want to buy the car. How much should I pay or negotiate with the bank? I live in NY. I guess if the market is down, the negotiation leverage for the buyer is more.......Please advise
  • ddeliseddelise Member Posts: 353
    Looking for some expert opinions.

    I am getting ready to turn in a 2008 Chevy Malibu LTZ. I am fine with miles and tires (they are close, but appear like they are within the guidelines for return). The interior is fine, as is the exterior, except for...

    The driver side passenger door has 3 significant dents. I believe that a service van, when turning around on my street, backed into my car and caused the damage. Anyway, here are my options:
    *** Received quote from higher-end auto body shop. They said they need to replace the entire skin, then paint the door and then blend into the quarter panel and driver door. $1850.
    *** Received quote from Chevy collision. The believe they can repair the dents by drilling small hole in door, pulling out the dents, then filling and painting similar to above. $950.
    *** Received quote from a 'Dent Doctor' type place. Similar process as Chevy, $650.
    *** Do nothing. Turn in as-is, and risk the charge.

    My insurance (USAA) deductible is $500, and I prefer (but don't need to) keep them out of this if possible. We have had only 1 claim in about ten years. The claim was a couple of years ago to repair my wife's Sienna after she backed into a parked car.

    I am looking to spend as little money as possible to get the car to acceptable standards for turn-in.

    So, I'm looking for opinions/suggestions on how to proceed.
  • dwynnedwynne Member Posts: 4,018
    Most lease banks carry residual insurance, so they will no negotiate the buy out price with you. If you turn the car in they auction it and insurance makes up the difference between what the auction brings and the residual. If they discount the car to you, they get nothing from the insurance.

    At the end of the lease look at the trade in value of a Highlander with the miles and condition like yours. If it is worth more than $24k and you want to keep it, then buy it at lease end. If not, then it might be time to move on to something else. No reason to overpay for the lease buyout unless your vehicle is really special.
  • dwynnedwynne Member Posts: 4,018
    You should get a pre-lease-end inspection from the lease bank (GMAC) and that will contain what they charge you (if anything) for the damage. You can then factor that in to your choices. Honda Finance (for example) has some forgiveness built into their lease turn ins for you might get by with bald tires or some dents and dings and pay nothing. I have heard that GMAC is not so nice - and loves to bill you later for stuff. So get the inspection done and see what they say. That will apply to the tires as well - it does not may what YOU think it is whay they think that counts and it normally cheaper for you to replace and fix that to let them charge you for them to do it.

    Do you have uninsured motorist coverage? What is that deductible? If you file a police report (someone did hit your car and drive off) most insurance will cover it under UIM and at often a lower deductible. I don't know why you are afraid to use your insurance - you have been paying them for over 10 years and made one claim. You pay insurance to have them fix your car when it gets damaged - so let them do their job. If they drop you over someone backing into your car, you need a better insurance company anyway.
  • ddeliseddelise Member Posts: 353
    Thanks for the response.

    I spoke with Ally/GMAC. It was not clear that once I had the pre-turnin inspection, I would have time to make any repairs, and then have a final inspection. I need to call back and speak with someone else to get a better understanding.

    I measured the tires with the tool provided by Ally, and I seem to be OK. But like you said, depending on how the inspector measures, I am sure he can show me needing new tires.
  • dwynnedwynne Member Posts: 4,018
    Never done a GMAC turn in or inspection, but the others I have done were in advance of end of lease and I received an itemized bill showing, what, if anything I would be charged for if I turned the car in as it was on inspection day. Then I could opt to have it fixed at my expense, or have the problems forgiven (with Honda Finance), or turn it in and wait for a bill. If other problems were found that happened after the pre-inspection I would be responsible for those as well. Anything you fix keep receipts and photos showing the before and after and ask them to re-inspect the car at turn in time.

    Some of these lease companies seem to want to down-play the inspection or not have one and then zonk their customers with a bill post-turn in. NOT the way to do things at all if you want repeat business. They own the car and you are supposed to return it with only normal wear and tear on it, otherwise you owe for the problems and issues. How they handle all of this goes a long way toward keeping the customers happy.

    Remember if you buy the car at lease end or sell it to a car dealer (like CarMax) you don't have to have any inspection done at all. If the car is worth as much as the current payoff then you can (in most cases) sell the car to a dealer and walk away.
  • kilo35kilo35 Member Posts: 7
    Hi & Happy New Year,

    I have sustained some damage to my front passenger side along with some slight damage to the grill "bezel". None of it is mechanical, however my local dealer quoted me around $2200 for repair. My question is two-fold,
    1: Should I just wait until I turn the car in (5 months) and just deal with what they say then or could that backfire on me?
    2:If I take it to a local collision shop and obviously save some cash is it possible when I do turn it in that it won't pass their muster and I still get hit for more fees?
  • jwilliams2jwilliams2 Member Posts: 910
    I definately wouldn't wait and let them determine how much the damages are. No matter what it would cost you to get it fixed, it is almost guaranteed they will put a higher number on it.

    I think you are much better off getting it fixed now. And it shouldn't matter where you get it fixed as long as they repair it properly, using OE parts.
  • graphicguygraphicguy Member Posts: 13,665
    Saw this reference from "Stories from the Sales Front lines".

    Short answer, have your Audi fixed. It will turn up on Carfax. But, depending on your lease clauses, it should not matter. Read the lease carefully, however.

    If it's done by a reputable shop and there's no clause in your lease that penalizes for having the car's wreck listed as having an accident, you should be good to go.

    I would not want to leave it to lease end, and be surprised by what the inspector and/or dealership states. I can't see anything good happening with that.

    Good luck!
    2023 Honda Accord Hybrid Touring
  • blcklabblcklab Member Posts: 7
    edited January 2011
    I had one payment left on my Saturn Outlook. We leased a new Acura so I returned my Outlook. The vehicle was inspected, miles overage calculated, and I was told to make the remaining payment as scheduled.

    Today I received a letter from Ally. Here's what it says. "Because your vehicle was returned early, CA law requires us to tell you that the Gross Early termination Amount is $XX,XXX.XX. We are not asking you to pay this amount now. After the vehicle is sold, we will use the Gross Early Termination Amount to figure the amount you owe.

    The amount you owe for early termination will be no more that the difference between the Gross Early Termination Amount stated above and (1) the appraised value of the vehicle or (2) if there is no appraisal, either the price received for the vehicle upon disposition or a greater amount established by the lessor or lease contract."

    Well I didn't BUY it because the appraisal amount was almost $8k less than residual since Saturn was shuttered. Does this letter say I could owe that difference for turning it one month early? I could be on the hook for that? When I turned in my previous Chrysler, they just billed me the remaining two payments.

    The letter confirms there is $0 damage and the miles over which of course I owe.

    Help me understand this.

    P.S. Maybe I am unclear. By appraised value do they mean the residual value, which then makes sense. I would then owe only my remaining payment minus rent fee (a credit) and the mileage I commited to paying for in contract.
  • delta737hdelta737h Member Posts: 626
    edited January 2011
    blklab,

    The final authority with regard to what you owe is the early termination clause in your lease agreement. There, you will find all criteria and definitions including the definition of appraised value which is likely to be the wholesale value. Do not place trust in some letter from a bank as I have seen mistakes made in the past. I suspect that the worst case scenario is that your early termination liability amounts to no more than your remaining payment plus any excess mileage charges plus applicable tax computed thereon. If you like, you may email me at...

    diffeq@zoominternet.net

    and I'll be happy to discuss it with you.

    John
  • eastbruceeastbruce Member Posts: 5
    I just turned in my Saturn VUE 2 months early and actually owed less than the 2 months payments. However, I had a no early termination fee in my agreement.

    My best advice to you: Find your lease agreement and read that section - then you'll know what you are liable for. Good Luck!
  • david04081962david04081962 Member Posts: 8
    Hi Gang,
    I just terminated my lease with vw. Along with the $350 disposition fee, there was $500 dollars more for minor scuffs. The other dealership got out the dents (parked in the garage and the kids occasionally would knock into my car from their mother's car). It's not like some one took a sledgehammer to it. also included was $120 for a tire with a little tread ware. What should my next move be? Who do I call to fight these outrageous charges? Doesn't the disposition fee cover the minor nicks and scratches?
    Thanks, David
  • madmax3377madmax3377 Member Posts: 3
    I currently have an 08 accord ex couple with 62500 miles with 6 months left on the lease. I am already 2500 miles over the allotted mileage. What is my best option? turn it in and pay the remaining payments or try to sell it? i already purchased another vehicle and to make the deal work i didn't include the accord. the accord also was keyed from front to back on the passenger side so was wondering what the charges would be for that if i did turn it in.

    another question would be - if i turned it in do i have to pay all the payments at that moment or do they bill you?
  • qbrozenqbrozen Member Posts: 32,930
    they bill you.

    If you are driving another car right now, it really doesn't matter if you turn it in now or later, you'll still pay the same.

    whether or not you can do better selling it depends on what today's buyout number is.

    '11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S

  • sebring95sebring95 Member Posts: 3,241
    As mentioned above, you need to find out what the buy-out is today. You might be able to sell it to a Carmax or even a private party if you work the deal right. One option if you find a private buyer is to go to a used car lot and ask them to handle the transaction. They'll essentially buy-out the car from the leasing company and then sell it to the private party. I have done this in the past and you can usually find a dealership to do this for $200-$400.
  • madmax3377madmax3377 Member Posts: 3
    The buyout is 15.5k - i was thinking if i can get it sold for at least 13k i can save money with all the fees involved in turning the car in early.
  • sebring95sebring95 Member Posts: 3,241
    The buyout TODAY is $15.5k? If so I think you're alright. You can probably get $13k at a Carmax. $15k on a private party.
  • qbrozenqbrozen Member Posts: 32,930
    edited February 2011
    ok... so an '08 EX coupe... auto or stick? 4-cyl or 6? leather or no?

    If 4-cyl, auto, no leather, with the damage, you'd be lucky to get $11k from a dealer (and you won't even get that if the damage is really bad). You MAY be able to get $13k private party ... but I don't think anybody will be banging down your door with that key scratch. I would look into getting that fixed first. After that, you may be able to get $14k.

    Problem is that you don't own it. So its a real pain to sell private party. You don't have a title. You have to get someone to pay you for it without giving them a title. If the buyer is financing, you may be able to arrange all the paperwork, etc, through their bank. That's what I did the one time I sold a car I still owed money on.

    '11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S

  • lch77lch77 Member Posts: 53
    The lease on my 2008 Mazda CX-9 GT end in 3 weeks. There is no turn-in fee. A sub-contractor inspected the car today. Mazda allows a lot of damage as normal wear & tear (they even send you a card to measure dings and other damage and allow one 4" ding per panel, etc.) but I have just one reportable scratch valued at $92 to fix but that is waived. I went over the mileage on previous leases so I increased the allowance on this car, but overestimated a bunch. I'm allowed 45,000 miles but just turned 36,000 a few days ago. I put new tires on 6 months ago and they all read 8 or 9 when only 2/32" is an acceptable tread depth. So, they will be getting a pretty nice car. I'd buy it for the ±$21,000 buy-out cost but it's bigger than we need now and gets lousy gas mileage (around 16 on average).

    Also, there is a hole in one of the taillight lenses. That did not get waived. The inspector's report puts the replacement cost at $597. I am hoping to "trade" the under mileage that I'm guessing is worth anywhere between $1350 and $2250 for the taillight lens. The inspector said that all she can do is report the car's condition, she can't waive damage. She told me to try to bargain with the dealer. I believe if the dealer thinks he can resell the car quickly, he might be willing to give me a break. However, if he's going to just let the car go to auction, there is no reason for him to do anything but collect the $597 "retail" repair price.

    So how would you try to get out of paying for the taillight lens? Would you bring the car to a few Mazda dealers? If so, with whom should I speak? Or do I call local body shops to see how much they would charge?

    From experience, I know the financing company will sometimes lower the buyout price if it's a lot higher than the current auction price, but I haven't heard of them negotiating repair costs. I did read on ridewithg that a person was able t do this but, in his case, the inspector was an employee of the car company and had the authority to do it.

    I also know someone who had dealers offer him $5,000 to turn in his car at their dealership, but I'd think that's extremely rare (it was a Mercedes model that had a resale value of $8,000 or so over the buyout price). Again, the dealer will bargain if he can make a quick buck.
    Any advice will be appreciated.
  • sebring95sebring95 Member Posts: 3,241
    If you're going to buy a new car, I would try trading it in. You may have some collateral in this one given the miles you've already paid for. That tail light shouldn't be that big of a deal. You can look around at online parts stores for a replacement to get a feel for the actual part cost. Labor for replacement shouldn't be more than $50-$100. You could probably do it yourself if you can handle a screwdriver.
  • qbrozenqbrozen Member Posts: 32,930
    $21k is actually a REALLY accurate trade-in value right now, so the bank nailed the residual in this case.

    If not buying the car, as suggested above, just replace the lens yourself. Search online and I'm sure you'll find one far cheaper than you are being quoted.

    '11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S

  • sebring95sebring95 Member Posts: 3,241
    Still might get the trade $$ even with the bum light. Maybe a little more for the nice tires. Worth a try...can't negotiate that stuff when you turn it in.

    Since the residual was set based on 45k miles...sounds like the bank got lucky.
  • dwynnedwynne Member Posts: 4,018
    Take it to carmax or other dealers and see what they will pay you for the car. You can sell it to them, pocket anything over lease buyout and walk away.

    Check http://www.car-part.com/ and ebay for the replacement lens and put that in for yourself - IF you can't sell it for profit to a dealer and need to turn the car in.

    The bank may win this one getting a low mile return with new tires, but it is a gas hog and fuel prices are rising daily o you might be glad to just be rid of it.
  • sprtysprty Member Posts: 1
    When we leased our car...we were told we could either pay it off and own it, turn it in and get a new one...or continue the payments as usual...then we just received a letter asking us for title info...very confusing....and also that we would have to renegotiate for payments. why are we now getting told another story?...we were told payments could continue as normal until we pay it off??? i am so confused!!!!!
  • ddeliseddelise Member Posts: 353
    edited March 2011
    So I turned my car into the dealership last Thursday. Per Ally instructions, I filled out the Odometer statement with the Chevy Finance dealer and received a signed copy, called Ally to let them know I made the return, and have been checking the website to view the inspection report. With the website still showing that the report is unavailable, I called Ally this morning to find out they have still not received the paperwork from the dealership. I called the dealership and am now waiting for a call back from the Finance manager with whom I made the return.

    Needless to say I am very frustrated and concerned about what has been happening to my car since I turned it into the dealer. The GMAC/Ally return process is much harder/inconvenient than it needs to be.

    Frustrating!
  • dwynnedwynne Member Posts: 4,018
    Are youi sure the letter is from your lease bank and not from a scammer?
  • lch77lch77 Member Posts: 53
    My turn-in's have been mostly uneventful, but like you, there was a delay in receiving the paperwork.

    Read your lease to confirm how long you must continue to pay for insurance on the car. I think my last lease said that if I don't receive the paperwork, I can discontinue the insurance 10 days after turn-in. Make sure that you have a signed receipt showing the date.
  • ddeliseddelise Member Posts: 353
    Thanks for the info on the insurance. I have still kept it just in case, but will review the contract. I do have the signed paperwork stating it was turned in on March 10.

    It's weird handing over a car and all you get back is a piece of paper, and then I am at the mercy of the dealer performing their responsibilities on a timely basis.
  • dwynnedwynne Member Posts: 4,018
    Did you have a pre turn in inspection? A lot of banks do them so there are no surprises come turn in day. If they are going to charge you for stuff you know in advance so you can fix it yourself.

    On turn in day, they (the dealer) usually do NOT re-inspect it, that is done once they get it to the auction or bank representatives. I always worry I will be hit for damage done after I turned it in - beyond my control.
  • ddeliseddelise Member Posts: 353
    No - GMAC/Ally does the lease turn-in inspection after you turn the car over to the dealer. So that is a huge part of my concern. The car has been sitting on their lot for a week. Who knows what could have happened to it.

    Now I first need to get the dealer to turn in the paperwork. Then I need to wait for the inspection report. And if there are costs for dings/dents/scratches (which there were none of when I turned it in), I am going to have to fight the costs.

    GMAC/Ally uses a horrible process.
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