early lease termination

[gioespo]

hi everyone! I hope someone could give me some insight on if they have dealt with a similar situation. I early terminated my lease and grounded my vechicle back to Chrysler. I paid off the remaining lease balance and early termination fee of 495. However, now i recieved a letter saying that the car will be going to auction and I will be responsible for the difference of what it sells for and the payout. Everytime I speak to someone on the phone they give me a different answer- some say its true and others say its just a letter they send out to everyone. Im very much freaking out and would like to hear what you guys think

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[Shibadog]

What does your lease say in writing about your responsibility during an early termination? That is your answer.. Doesn’t matter what you were told, what does your written contract say? And do not be surprised if you get burned. Leases are designed to make the leaseholder money-not to help the leasee.

 

[Bandit59]

hi everyone! I hope someone could give me some insight on if they have dealt with a similar situation. I early terminated my lease and grounded my vechicle back to Chrysler. I paid off the remaining lease balance and early termination fee of 495. However, now i recieved a letter saying that the car will be going to auction and I will be responsible for the difference of what it sells for and the payout. Everytime I speak to someone on the phone they give me a different answer- some say its true and others say its just a letter they send out to everyone. Im very much freaking out and would like to hear what you guys think

Sounds about right I did a lease in 2002. Had to repaint the bumpers to keep the value up. That was my last lease.

 

[AdamG]

Check your paperwork, but as far as I understand, if the amount they get is greater than the residual value, they credit you the extra.

If it sells for less than the RV, you’ll only be responsible for the disposition fee and any wear and tear found in the turn-in inspection (please tell me you did this).

 

[JSFoster75]

hi everyone! I hope someone could give me some insight on if they have dealt with a similar situation. I early terminated my lease and grounded my vechicle back to Chrysler. I paid off the remaining lease balance and early termination fee of 495. However, now i recieved a letter saying that the car will be going to auction and I will be responsible for the difference of what it sells for and the payout. Everytime I speak to someone on the phone they give me a different answer- some say its true and others say its just a letter they send out to everyone. Im very much freaking out and would like to hear what you guys think

This is why I will never have a lease...

My history with leases:
In 1989, my dad bought a Toyota Camry SE... less than a year later, he lost his job through no fault of his own and simply couldn't make the payments. He left the keys in the car and told them to come pick it up.

Original sales price: $18,000 +/-
Vehicle sold at auction for an unknown amount
Dad received a bill for the difference in what was owed on the lease versus what it sold for (Car was in like-new condition, should have brought a reasonable price)
Dad couldn't pay the car payment, so how was he supposed to pay that amount in a lump sum with no job?
So, the leasing company sued him and by the time it was over years later, he had paid $18,000 including the fees, penalties, interest, etc... And he had NO CAR to show for it...
Lesson learned - I will never have a lease, I don't care how good they make it sound.

And don't tell me how much leases have improved over time, I really couldn't care less, if you can't/don't pay, you will be sued and it will cost you far more than it would have originally. At least paying for a car conventionally you can build equity in it and recoup some of your losses form the worst investment ever created by mankind.

 

[ParadigmDawg]

Best thing would have been to trade it in on something you wanted.

 

[evo8904]

Best thing would have been to trade it in on something you wanted.

This! There’s nothing wrong with leasing, you just need to know how to pay the game.

 

[evo8904]

This is why I will never have a lease...

My history with leases:
In 1989, my dad bought a Toyota Camry SE... less than a year later, he lost his job through no fault of his own and simply couldn't make the payments. He left the keys in the car and told them to come pick it up.

Original sales price: $18,000 +/-
Vehicle sold at auction for an unknown amount
Dad received a bill for the difference in what was owed on the lease versus what it sold for (Car was in like-new condition, should have brought a reasonable price)
Dad couldn't pay the car payment, so how was he supposed to pay that amount in a lump sum with no job?
So, the leasing company sued him and by the time it was over years later, he had paid $18,000 including the fees, penalties, interest, etc... And he had NO CAR to show for it...
Lesson learned - I will never have a lease, I don't care how good they make it sound.

And don't tell me how much leases have improved over time, I really couldn't care less, if you can't/don't pay, you will be sued and it will cost you far more than it would have originally. At least paying for a car conventionally you can build equity in it and recoup some of your losses form the worst investment ever created by mankind.

Your dad basically let the car repo. This happens when you stop making payments. This isn’t an issue with leasing, the issue is not making payments.

 

[JSFoster75]

Your dad basically let the car repo. This happens when you stop making payments. This isn’t an issue with leasing, the issue is not making payments.

Correct, but in a straight-out purchase, he would have had the opportunity to sell the car for fair market value and then try to get a loan to pay the difference, etc.

 

[TheRaven]

Correct, but in a straight-out purchase, he would have had the opportunity to sell the car for fair market value and then try to get a loan to pay the difference, etc.

Same with leasing. I don't understand how in 2024 so many people don't realize that this is not a difference between financing and leasing. Everything you are talking about, all the stuff your dad went through, would be the same had he financed. He made a mistake that would have been a disaster either way.

 

[DaltonGang]

I get a kick hearing people talk about their cars, that they cannot afford, but that leasing made it possible. Fast forward several years and several "New Leases" later, and the same person has changed his/her tune. Sure they have had low payments, on new cars, and have been able to trade up every two years. But, what they are now leasing and signing for is a $40,000 vehicle, but the roll-over amount brings it to $55-60,000 to pay it off. They are now locked into a never ending loop of leases, unless they pay the entire thing off.
Me, I buy a vehicle, drive it until it is payed off, drive it a few more years. If I like it, I keep it. If I want another new vehicle, I now have equity to use towards the new vehicle. Oh, I'm meticulous about keeping things clean, inside and out.
My 2018 Wrangler is payed off, as is my 2006 Dodge 2500 Diesel, and they both are in excellent condition.

 

[jav_eee]

I get a kick hearing people talk about their cars, that they cannot afford, but that leasing made it possible. Fast forward several years and several "New Leases" later, and the same person has changed his/her tune. Sure they have had low payments, on new cars, and have been able to trade up every two years. But, what they are now leasing and signing for is a $40,000 vehicle, but the roll-over amount brings it to $55-60,000 to pay it off. They are now locked into a never ending loop of leases, unless they pay the entire thing off.
Me, I buy a vehicle, drive it until it is payed off, drive it a few more years. If I like it, I keep it. If I want another new vehicle, I now have equity to use towards the new vehicle. Oh, I'm meticulous about keeping things clean, inside and out.
My 2018 Wrangler is payed off, as is my 2006 Dodge 2500 Diesel, and they both are in excellent condition.

I've never leased but I heard if I'm upside down on a trade-in for a lease, that negative equity is "gone" once the lease is over. Is that not how it works?

 

[TheRaven]

I get a kick hearing people talk about their cars, that they cannot afford, but that leasing made it possible. Fast forward several years and several "New Leases" later, and the same person has changed his/her tune. Sure they have had low payments, on new cars, and have been able to trade up every two years. But, what they are now leasing and signing for is a $40,000 vehicle, but the roll-over amount brings it to $55-60,000 to pay it off. They are now locked into a never ending loop of leases, unless they pay the entire thing off.
Me, I buy a vehicle, drive it until it is payed off, drive it a few more years. If I like it, I keep it. If I want another new vehicle, I now have equity to use towards the new vehicle. Oh, I'm meticulous about keeping things clean, inside and out.
My 2018 Wrangler is payed off, as is my 2006 Dodge 2500 Diesel, and they both are in excellent condition.

You do realize that this is not unique to leasing right? The same type of people do the exact same thing with traditional financing. 96-month loan on a Range Rover, the warranty is ending so they want the hell out (and I don't blame them) but they're 10k upside down so that gets rolled into the next 96-month loan and the same cyle continues.

I've never leased but I heard if I'm upside down on a trade-in for a lease, that negative equity is "gone" once the lease is over. Is that not how it works?

Yes. This is one of the things that makes leases so appealing. They are not for the financial newbie (and also old people who hate things that are different) but if you know what you are doing a lease is an awesome tool. If you find near the end of your lease that your vehicle is worth more than the contract residual, you can sell or trade it and walk away with cash, just like if you owned it or used traditional financing. If you find that it's worth LESS than the contract residual, you can hand it back to the bank and walk away.

 

[JSFoster75]

I've never leased but I heard if I'm upside down on a trade-in for a lease, that negative equity is "gone" once the lease is over. Is that not how it works?

You will have to pay for any overage on mileage at the time it is traded or turned back in.

 

[jav_eee]

You will have to pay for any overage on mileage at the time it is traded or turned back in.

assuming no overage on miles and no damage to the vehicle needing payment then isn’t a lease a good option IF you’re someone always wanting a new vehicle? A lot of leases can be had with 0 down. Where’s the negative?

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