Something just doesn't seem fair...

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04/11/2006, 08:21 PM
Lease-V-cross

Something just doesn't seem fair...

SO I get a letter from my bank and they want me to refinance my VX that I am currently leasing. It also says in this letter that I can push back my first payment til' August 06. Wow!

My lease expires at the end of June 06.
I have roughly 74,000 miles on her.
So, I call the bank and ask for more details. The nice southern-accent woman informs me that I don't qualify for the "three-month break" but I do qualify for the new fixed monthly payment of $257 a month for 5 years. :confused:
I was paying $329 a month and now I can purchase the VX with an added two year warranty for only $293 a month for 5 more years??? Huh? :confused: :(

They tell me over the phone that the VX Payoff:
$10,599.53 as of 04/12/06

I talk to my Allstate rep and he says "don't do it" ...just turn the car back in because the last thing the bank wants is to have to deal with the VX being returned.
I look on Kelly Blue Book.com...and my VX is only worth about $8,315 in "fair" condition...hell...even in "Excellent" condition the VX is only listed as $8,975 @78,000 miles.
My bank tells me that the interest rate is 12% and if I go to try and buy a new car at a dealer it will be much higher due to my bankruptcy 2 years ago.
She tells me I already have an established relationship with them so why not stay with them.
I think I'm being lied to...(I know...duh)
My credit score is in the mid-sixties...not quite "fair" but not "very poor" either.
Any suggestions?
I think I'm gonna shop around and ask some dealers.
I'm not just going to make it easy on my bank and sign this new contract. I think if I tell them that I researched the actual price quote of my VX, maybe they will change the deal.
I had fun with the my VX, so its not like its a big deal if I let it go.
04/11/2006, 08:29 PM
Hotsauce

What will you have to pay if you turn it in with that many miles?

Mid sixties credit score?? you mean mid 600's right? Max score is 850.

John C.
04/11/2006, 08:32 PM
Lease-V-cross

Yeah...sorry...its late.......I'm at 640 right now.
I am way under the mileage.
According to my lease I have to return the car under 100,000...so I'm OK on that.
I think my bank is just (once again) using fear to get me to buy this VX.
04/11/2006, 08:59 PM
Moncha

See what other agencies will offer for an interest rate.. You don't have to stay with the bank you are at.
04/12/2006, 06:58 AM
Ruflyf

I think just about any bank will work with you with a 600+ credit score. That does sound like a big payemnt though, if you are truly happy with the car, let it go and start searching for one to make your own.
04/12/2006, 07:05 AM
Joe_Black

Check with some local credit unions. They're not regulated like banks and have a lot more latitude in lending. Both of our VX's were done through the local credit union we were able to join and the highest interest rate was about 6%, and that was years ago before the rates dropped. That beat the crap out the best rate the bank I work for could do, and it's one of the top-ten largest banks!
04/12/2006, 07:14 AM
WormGod

Ya, hate to sound like a loud cricket under your window at night, but that's the freefall from leasing. You simply never know what deals can be made until your lease is up, and at that point, you are simply paying for the same car all over again anyways. Never been a fan of leases. It sounds like this buyout/finacing option you have in front of you know has a very high rate. That is probably what is burning that dollar amount higher.

I recently called State Farm to talk to my agent about my buying a new WRX. Wanted to see what that would do to my insurance with having the VX as a low mileage second car. Funny thing, but he told me that when I buy it, take whatever financing they offer and then once I have the car, come back to him. State Farm will offer an automatic 5% with one of their inside financing partners. Sounds like a good deal to me if I get anything over 5%. ;) Luckily, my credit score rated at 820 when I got my house last year. Not that I am too worried about that.

Good luck with whatever you decide. :)
04/12/2006, 07:21 AM
Lease-V-cross

I just checked my credit score this morning with Transunion & Trucredit and it did go up again since last November. Thank God.
I'll just take my chances and turn my VX in at the end of June.
Good thing I didn't sign any paperwork yet.

It was a blast to drive, but I'm thinking ahead (for once) with gas prices also expected to climb again this summer...I believe I'm doing the right thing. Thanks everyone!
04/12/2006, 10:06 AM
SPAZZ

hmmm

go get a Jeep Wrangler Rubicon Unlimited...but with the 4.0L 6 cylinder not that new 3L minivan engine they are going to.

belly tuck, lift, some 35's oh yeah!!!
04/12/2006, 05:46 PM
deermagnet

Quote:

Originally Posted by Lease-V-cross

I'll just take my chances and turn my VX in at the end of June.

Please be very careful here. You need to know exactly what will happen BEFORE you turn it in. Find out if it's an open or closed end lease. Check the agreement for any expected or required residual value amount at lease end.

In an open-end lease, you are liable for the difference between the predicted residual value and the actual amount received by the lessor on the sale or auction of your vehicle at lease end. If the open-end residual value is artificially inflated to reduce the monthly payments, the shark will show up at lease end when the actual market value of the vehicle is lower and you owe the difference. (Under Federal law, this amount will usually not exceed the sum of 3 monthly payments).

A closed end lease has the residual value agreed upon in advance, which is better for you. Either way you could end up with the dreaded "excessive wear and tear" bill that you'll have to fight them on. Call the bank and talk to someone in the leasing dept. and press them on what will happen in regards to unexpectedly low residual value and any other bills they may end up sending you. You don't wanna be surprised by getting a $2,000 bill in the mail.

Be informed and don't just take your chances. You can avoid the bank entirely by trading in the VX now on your next vehicle, but they will have to give you the payoff amount for your VX.

Mark
04/12/2006, 05:54 PM
transio

Quote:

Originally Posted by deermagnet

You can avoid the bank entirely by trading in the VX now on your next vehicle, but they will have to give you the payoff amount for your VX.

But then you're getting below market value for the vehicle. How would that be better than turning in on an open end lease?
04/12/2006, 06:02 PM
deermagnet

I'm talking about a dealership giving him $10,599.53 for his VX to get him free and clear of the bank. That may not be the best option if it's a closed end lease and he ends up with no additional bills or payments toward the lease. For a dealer to give him that much with 74-78K miles, they may jam him on the price of the new vehicle. There's lots of variables here and he needs to find out some specific info on this lease.

Heck, he could privately sell right now and maybe get $11,000 or more with the right buyer and everything would be peachy. :)
04/12/2006, 07:12 PM
Joe_Black

Quote:

Originally Posted by WormGod

I recently called State Farm to talk to my agent about my buying a new WRX. Wanted to see what that would do to my insurance with having the VX as a low mileage second car. Funny thing, but he told me that when I buy it, take whatever financing they offer and then once I have the car, come back to him. State Farm will offer an automatic 5% with one of their inside financing partners.

Thanks for sharing that info! We're transferring an '04 Axiom (the last true Isuzu!) to our local CarMax for addition to the stable and are shopping financing. 5% would beat the credit union.
04/13/2006, 09:23 AM
nater

Many leasing companies will negotiate a price. If you have a lower price you'd be willing to pay, call them back and make them an offer over the phone. You'd be surprised.

Nate