GTIwannagofast
Ready to race!
:lol: classic :thumbsup:
8
Ending lease early?
- Thread starter scottie46
- Start date
:lol: classic :thumbsup:
That is wrong. VW is legally (and contractually) entitled to the amount specified in the lease agreement that was signed and agreed upon from day one. That 'residual value' is 100% contractual. I pay VW that value and they won't ever know the actual value of the car (nor will they care because I satisfied the terms of the contract).
That is what you are missing. I didn't accept payment. The buyer effectively bought the property (car) from VW and gave me another $4k for it (difference in VW payoff and agreed upon fair market value).
Its as if the buyer gave me $15k for me to give to VW so they could give me $4k for the car. But I didn't touch the funds the entire time.
VW Credit to Leasee - "You owe us $15k for the car" (contractually obligated buy-out amount)
Buyer / Leasee/Seller - "$19k agreed value? Yes" (current fair market value)
Buyer to Leasee/Seller - "Here is $15k to pay VW" (but the buyer takes care of it themselves to ensure accuracy and timely completion)
Buyer/Leasee to VW Credit - "Here is $15k for the car" (VW accepts payment at the contractually obligated amount)
Buyer to Leasee/Seller - "Here is $4k for the car" (my equity that I use to roll into the new car)
DONE.
I (the leasee) paid VW Credit for the car using the Buyers money. SEE... Anyone can make a payment on someone elses note/loan. The finance company doesn't care where the money comes from. I could pay your credit card payment this month but that doesn't mean I am now the owner of that credit card. Nor does that mean you sold/transferred ownership of it to me.
Transfer of title is what completes the sale, not the transfer of funds.
Its not illegal, its not a breach of contract, and VW is none the wiser (nor do they care because they got their contractually obligated amount for the car).
Its called being savvy.:thumbsup:
And the reason I admit an individual would not do this is because they wouldn't most likely have the cash on hand for the deal and they don't operate in a limited liability situation like a business does IF I decide to evade the deal after they gave me the money for the car to pay VW. However, for the dealer, its all done on the spot and since it is their money they control the whole situation. I just await my new cars' keys.
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There is a lot of false information in here, I sold cars for many years and this is how it goes.
At the end of your lease, you have three options.
-Return the vehicle and walk away, assuming you are under allowed miles and don't have "excessive wear and tear" charges.
-Trade the vehicle in, in this case you owe the leasing company the payoff (residual value) of the vehicle plus any payments remaining and any fees that they want to charge you if any. Example, your residual is 10k, with one 300 payment left and they aren't charging any early term. fees. The dealer your trading it in too would simply purchase the vehicle from VW for 10,300 and any equity you have would go towards your new vehicle. Think of it as if you were buying the car from vw, you wouldn't owe them kbb value for the car, simply what you owe to them. You would not be responsible for mileage or wear in this case because vw doesn't care since they aren't going to have to re-sell the car.
- Buy the vehicle yourself, finance it through the bank of your choice and send vw a check for what they are owed. Again, mileage and wear doesn't matter because its not vws problem.
If your trading it in on a new car and you have 4k of equity, vw is NOT entitled to that money. Since you are only contracted to pay them your payments + residual.
slackin via taptalk
At the end of your lease, you have three options.
-Return the vehicle and walk away, assuming you are under allowed miles and don't have "excessive wear and tear" charges.
-Trade the vehicle in, in this case you owe the leasing company the payoff (residual value) of the vehicle plus any payments remaining and any fees that they want to charge you if any. Example, your residual is 10k, with one 300 payment left and they aren't charging any early term. fees. The dealer your trading it in too would simply purchase the vehicle from VW for 10,300 and any equity you have would go towards your new vehicle. Think of it as if you were buying the car from vw, you wouldn't owe them kbb value for the car, simply what you owe to them. You would not be responsible for mileage or wear in this case because vw doesn't care since they aren't going to have to re-sell the car.
- Buy the vehicle yourself, finance it through the bank of your choice and send vw a check for what they are owed. Again, mileage and wear doesn't matter because its not vws problem.
If your trading it in on a new car and you have 4k of equity, vw is NOT entitled to that money. Since you are only contracted to pay them your payments + residual.
slackin via taptalk
True, however all one needs to do is speak with someone in fiance at their local dealer. It isn't as complicated as most people make it out to be.
A lot of people were tought by their parents that leases are bad because they used to be "open ended" leases where you didn't have a fixed end of lease residual. So most people ended up being in a poor position in terms of equity when it came time to give it back. This is why they now have leasing contracts with fixed residuals to keep consumers safe.
slackin via taptalk
Chris@Revo USA
Go Kart Champion
Except you are missing the entire FACT that you don't own the car and that most lease agreements state that within X amount of time of the end of the lease the car cannot be sold to a third party.
RicoA
Passed Driver's Ed
+1. I was always told how horrible leases were until I really did the research and decided it was a good option for ME.
Chris@Revo USA
Go Kart Champion
It is not wrong, read your lease..
The residual value is 100% contractual TOO YOU... . if you chose to sell a car you don't own to a third party that is thrown out the window..
This is not difficult to understand, actually its more concerning that you don't understand it when you signed documents agreeing to something you are telling me is wrong.
READ YOUR LEASE!!!
You did, there is no possibly way to contest that especially since you stated you did.
Again depending on the time from the end of your lease how third party buy outs are handled is different.
But you can still buy it out with the third party money w/o VW even knowing/caring about it. This is what dealerships (businesses) will do to make this more lucrative.
I could take a leased car to a BMW dealership and they will buy me out of my lease at ANY POINT. This is pretty standard actually.
DougDome
Go Kart Champion
Kind of off-topic question but I saw it mentioned earlier in the thread.
Let's say I was selling my car that is still financed through VW credit. Did I understand correctly that the buyer and I can go to a VW dealer with the cash in hand and get a lien release right then than there so we can transfer title?
I thought that I would need to send a payoff directly to VW credit and wait a few days for the snail mail for a lien release. If that's not the case, it just became much easier for me to sell my car.
Let's say I was selling my car that is still financed through VW credit. Did I understand correctly that the buyer and I can go to a VW dealer with the cash in hand and get a lien release right then than there so we can transfer title?
I thought that I would need to send a payoff directly to VW credit and wait a few days for the snail mail for a lien release. If that's not the case, it just became much easier for me to sell my car.
GTIwannagofast
Ready to race!
VW CREDIT SITE said:
third of the FAQ is what is being discussed.
Chris.
The 3rd party (most often a dealership) is paying VW on my behalf. That is done at the contractual amount in the lease. The amount is contractual to me and the note is being satisfied on my behalf using 3rd party funds (think of it like a loan maybe...)
Its not like I am selling the car today and then the buyer or me paying the lease off tomorrow. It is happening concurrently. VW recognizes the leasee as paying the lease even though the money is coming from a 3rd party. They don't actually know where the money is coming from.
And the 'sale' is only final upon transfer of the title, NOT the funds. I haven't 'sold' the car till the title is transferred. Regardless of how much money the buyer gave me for it.
I am NOT selling something I don't own because even if I wanted to I couldn't possess (and subsequently transfer) the title until the note was satisfied. This is being done at the time of the 'sale' using the 3rd party funds which are satisfying the note on my behalf thus releasing the lien/title to allow for its transfer which completes the sale.
Like this, SAME DIFFERENCE TO VW;
LEASEE TO VW - $15k
BUYER TO LEASEE TO VW - $15k, concurrently of course
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You can actually do the payoff electronically to VW Credit online and the lien will be released immediately. I don't know what happens to the title. There may be a temporary document provided to you until the physical title is released.
GTIwannagofast
Ready to race!
i highly doubt it would be that quick and a VW dealer more than likely will not want to be a part of the transaction. snail mail a check to them (or electronically as stated above), wait for the title, and then sell the car... that's how i would do it. pretty sure the new buyer needs the title to register it. for me, i'm not giving someone money until i have a signed title in my hand.
Chris@Revo USA
Go Kart Champion
Which I believe in one of my very first posts in this thread I said unless the dealer gives you a 0% loan (for a day or a minute or whatever)...
Essentially it is no different then financing the buy out which most people would do.
Again never said anywhere that this isn't possible.
But its apparent that you not only don't read your leases but this thread as well.