Lease End NIGHTMARE!!!!!!!!!!!!!!!!!!

[scoobycarolan]

In January of 2011, I traded a leased Audi A4 into Latham Ford for a demo (had 1600 miles on it) 2011 Ford Explorer XLT. They purchased the car directly from Audi to close my lease. Now I am attempting to trade my vehicle to another dealer. In the past week I have been given 4 different price quotes on the buyout of my vehicle: $31,045.07 from Ford Credit, $30,545.07 from Shawn at Latham Ford, then 5 minutes later in the same phone conversation I was told he was incorrect and the amount should have been $30, 951.40.

Today as we we're preparing to close the deal, Shawn at the dealership as re-quoted the amount of the car to $33,427.50. He says this is the buyout with Tax that I have to pay. Unfortunately the tax on $30,951.40 in my part of NY (% 8.25) would be $2,553.49 which would total out to $33, 504.89. Again, the numbers are incorrect & I believe he is adjusting them "on the fly". Either way, this change has altered my 3rd party financing by thousands of dollars & I will no longer be able to close my deal. I will likely lose the deposit of $300 I have placed on my new vehicle because I cannot complete the transaction.

When I asked a representative at Ford Credit why I had to pay taxes & my new company couldn't just buy the car directly I was told that this was "Ford's policy". Effectively, the 3rd party writes a check on my behalf with taxes. The title is transferred to me & I then have to sign it over to my new company. I asked the same representative "Why was I able to trade my last car in and Latham Ford didn't have to pay taxes or have a title transferred to me?". I was told that different lease companies operate differently. Audi allowed Ford to buy the vehicle direct & there was no law or tax code preventing it. However Ford's policy does not allow the same in reverse.

Ford's policy of forcing owners to pay taxes and deal with this convoluted lease-end system effectively prevents competition between other dealers. By forcing me to pay a higher buy-out price & requiring more steps in the process because I am outside of the Ford network they are preventing me from using anyone else. Either come back to us, or we are going to make this awful for you. Add into all this that the buyout price of my vehicle keeps changing every time I have called. Without being given a final price that I could be confident in & this process' overall difficulty, I am essentially going to have to return to the dealer where I purchased the vehicle no matter what. I have no choice, other that financing thousands of more dollars than I need to to cover the taxes & break the cycle. I am essentially stuck in this vehicle with no recourse except to stay with Ford until the end of the lease & walk away with nothing.

 

[13Sport]

Well, for starters, this is a Lease you are talking about. A lease buyout is calculated based on the residual value of the car, which will change on a daily basis. So them altering the value between days is not uncommon.

However, if you leased through Ford Credit you can go to their website, and print out a payoff letter which will have the value of the car for payoff (including tax and interest) and an expiration date, as long as they receive a check for that value prior to the expiration date, it will pay off the car in full. There should be no "haggling" on a buyout.

If you stay with the Ford vehicle throughout the lease, you are not walking away with nothing. You didn't have to pay for the full vehicle, you paid for the portion of the vehicle you used. At the end of the lease you have the option to walk away (having paid for the depreciation of the vehicle while you used it) or financing the remainder of the value of the vehicle and owning it.

The best thing you can do is go print out a payoff letter from your account, that will be the exact amount of what the dealer needs to send to Ford credit to pay off your vehicle in full and transfer the title to you.

 

[Joe Dirt]

Agreed- you're making it more difficult than it needs to be- get the payoff letter, and all is well. Done it a bunch of times.

 

[peterk9]

Well, for starters, this is a Lease you are talking about. A lease buyout is calculated based on the residual value of the car, which will change on a daily basis. So them altering the value between days is not uncommon.

However, if you leased through Ford Credit you can go to their website, and print out a payoff letter which will have the value of the car for payoff (including tax and interest) and an expiration date, as long as they receive a check for that value prior to the expiration date, it will pay off the car in full. There should be no "haggling" on a buyout.

If you stay with the Ford vehicle throughout the lease, you are not walking away with nothing. You didn't have to pay for the full vehicle, you paid for the portion of the vehicle you used. At the end of the lease you have the option to walk away (having paid for the depreciation of the vehicle while you used it) or financing the remainder of the value of the vehicle and owning it.

The best thing you can do is go print out a payoff letter from your account, that will be the exact amount of what the dealer needs to send to Ford credit to pay off your vehicle in full and transfer the title to you.

My lease is for 48 months with a total mileage of 100,012 KMS (62,000 mi). The residual value at lease end is $19,158.23. This is the figure in the contract and will not change. It was the same for the 3 Highlanders I had leased before. The residual value was based mainly on the anticipated mileage and the vehicle model. So if I wish to buy it at lease end, the cost will be $19,158.23 + tax and any documentation fee.
The actual value of the Ex will likely be higher since I anticipate there will only be about 30,000 kms (18,600 mi) on it by then given my current driving habit.
The only way the buyout price would change is if I decide to buy it out before lease end as I will save on interest.
The fine print on the lease contract also says the vehicle is to be returned to the leasing dealership.

Peter

 

[alexk]

Call ford motor credit and ask them for a payoff and have them fax it to you. On there should be all fees necessary for you to pay and instructions on where to send the exact amount due.

 

[fe298]

This is all about trying to keep you in a Ford product and its BS. I just went through this with a Fusion I had leased. A few months back I was going to trade it in because it was over on miles and I was looking at a few different vehices Ford and non Ford. I was told by Ford credit that I had to return to the selling dealer and they would only sell the vehicle to me. I could not trade it in or sell it on my own my only choices were turn it in or buy it. I ended up buying it and I am just going to keep it for a while and run the miles up. I had traded in leases before and never had a problem even one Ford in the past, but Ford has a different policy now. I learned and I would never lease a vehicle of any kind again anyway so it doesn't matter going forward.

 

[scoobycarolan]

Guys, I did that. I have the buyout letter. Ford Credit told me that ultimately you do not pay them, you pay the dealer. Ford Credit is just holding the note on the dealers behalf. I've leased plenty of cars, and like I even described VW/Audi uses the process that we've come to expect. It's Ford who's changed the game up.

Also, any buyout price is usually locked for a week or two once you request it. To avoid this sort of thing. Go ahead and call Ford Credit, tell them you're trading to another dealer & see what happens.

 

[spitfisher]

Ford's policy of forcing owners to pay taxes


Forcing owners? Think again or re-word that. Terminating a lease and using the car for trade is effectively buying that leased car, when ever you buy, you have to owe a sales taxes. IMO there should be no surprise here.

 

[RonJrSVCMGR]

Spitfisher, correct. No different than buying a used car. Just think, the taxes would have been higher if you bought it outright. You can still walk away and buy a new one.

 

[spitfisher]

Spitfisher, correct. No different than buying a used car. Just think, the taxes would have been higher if you bought it outright. You can still walk away and buy a new one.

Agreed, Ok so he pays for his sales tax on his now off lease ( audi) ready to trade "used" car. For the sake of exlanation, lets say the tax is 2500 on his 30k now used car. And lets say his new explorer sticker price is 45k, he should be paying tax on the difference of 45k less the trade amount, not on the full 45k

On a semi unrelated subject, i have found that the buy out price at lease end can be negotiated even though you signed papers at the begining of the lease. Most financial institutions do not want the car back, they would prefer you to refi. or payfor it. Put together a reasonable offer of what you want to pay for the car to keep and what interest rate & term you would prefer to on the new car. Tell them you can borrow money from anyone, you would like to give them the opportunity first to keep your business. Again never hurts to ask and again most banks don't want a car and want to loan you more money. Its kind of funny now adays most people try to negotiate the car with dealer, but rarely negoitiate the financing as well.

 

[peterk9]

Spitfisher, correct. No different than buying a used car. Just think, the taxes would have been higher if you bought it outright. You can still walk away and buy a new one.

I believe you mean if you bought it initially instead of leasing, the taxes paid would have been higher. That is true as far as a lump sum tax payment but don't forget that if you buy it out on lease you pay a lower lump sum tax but you have still paid tax on your monthly payments. It is just spread out over time.

Peter

 

[RonJrSVCMGR]

I believe you mean if you bought it initially instead of leasing, the taxes paid would have been higher. That is true as far as a lump sum tax payment but don't forget that if you buy it out on lease you pay a lower lump sum tax but you have still paid tax on your monthly payments. It is just spread out over time.

Peter

Exactly what I meant, Peter. Thank you.

 

[peterk9]

Guys, I did that. I have the buyout letter. Ford Credit told me that ultimately you do not pay them, you pay the dealer. Ford Credit is just holding the note on the dealers behalf. I've leased plenty of cars, and like I even described VW/Audi uses the process that we've come to expect. It's Ford who's changed the game up.

Also, any buyout price is usually locked for a week or two once you request it. To avoid this sort of thing. Go ahead and call Ford Credit, tell them you're trading to another dealer & see what happens.

My experience with my Highlander leases was the same. You pay the dealer who then pays off the credit company. With Toyota, I was free to sell the vehicle on my own but the actual transaction had to go through the dealership. Any money from the sale over and above the residual would be given back to me.

I assume that you are speaking about buying your vehicle before the lease is up. Otherwise, your residual (buyout) should be shown in your lease contract and that is all you should be obligated to pay. Fees for mileage overages are another matter.

As I mentioned in my previous post, the only time the buyout price should differ is if you want to buy it before lease end. That is because of the interest calculations on the amount left to pay off on your intial lease period. That is why the cost changes over time.

Peter

 

[Joe Dirt]

Agreed, Ok so he pays for his sales tax on his now off lease ( audi) ready to trade "used" car. For the sake of exlanation, lets say the tax is 2500 on his 30k now used car. And lets say his new explorer sticker price is 45k, he should be paying tax on the difference of 45k less the trade amount, not on the full 45k

Not here- if you trade, you pay sales tax on the full new vehicle purchase price before your trade is considered/subtracted.

 

[scoobycarolan]

at the end of the day, Ford took my trade directly. Paid no taxes & the title never crossed my hands. What they are saying is they refuse to release the car directly to a 3rd party, even though they gladly do it to get you to trade in to them.