2023 Mercedes GLC300 Early Termination Clause Wording

Ask the Hackrs
1

Hi LH community,

I have a 36-month lease that I am 8 months into, and I am being forced to consider early termination options. I’ve read several early term posts but didn’t see an answer that addressed what I am confused about with the way my early term options are written.

Here is the early term clause in my contract:

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In reading Calc A, it does not read as “Negative equity balance after auction” as I’ve read in other posts. I want to know if anyone else reads Calc A as providing an out of the lease without paying all the remaining payments?

I read Calc A as:

A(1) “All unpaid Monthly Payments that have accrued up to the date of termination” – This should be all the payments that are due before the day of termination, right? This should not address remaining payments on the lease since remaining payments is defined explicitly in other language in Calc B(1).

A(2) “All other unpaid amounts, other than excess wear and use and mileage charges, due under the lease” – This is the one that is confusing me. I read this as whatever other costs are due under the lease, but I don’t think this can be read to mean it includes all the remaining payments because they list that separately from when they talk about this same thing in Calc B. In Calc B(1) they say “All Monthly Payments not yet due under the lease” which I take to mean all the remaining payments. They also say in Calc B(3) “All other unpaid amounts due under the lease”…and by listing these two things separately and explicitly I think that a reasonable person would expect that “all other unpaid amounts due under the lease” does not inherently include “all remaining payments”.

A(3)…not worried about this. I just assume I’ll pay it.

A(4) …not worried about this. I just assume I’ll pay it.

A(5)…I assume this is not an issue and I won’t owe anything on this since the fair market value should be higher than the “remaining payments * number of months”, right?

A(6)…not worried about this. I just assume I’ll pay it.

I assume Calc B is a non-option since paying $27K to get out of the lease is not going to happen.

The lease is in good standing. Lease details:

  • 2023 GLC300
  • 36-month lease, 10K per year
  • 27 months remaining
  • Monthly pmt 1045.01 (I didn’t put any cash down)
  • Monthly use tax 87.52 (Nevada)
  • Estimated fair market value right now 41000
  • Gross Cap cost 62997 (includes dealer and acq. fees + $2307 prepaid maintenance)
  • Lease charge 37621
  • Residual value 35480

Is there a calculator or formula that would let me figure out the cost to early term?

I can’t imagine this can be transferred but if you see a trade/sell option that I don’t, I’m all ears there. :blush:

2

This stuff can get hella complicated. One “easy button” approach is to go do the following:

  1. Submit your car’s VIN to some of the vehicle-purchase-sites like Carvana or GiveMeTheVin.com or others. See what cash you could get for your vehicle assuming you had the title.

  2. Go to MBFS.com and after logging in, scroll down and click this blue button. Tell us what it says under “payoff amount”
    image

Assuming #2 is greater than #1, … if you are mentally ready to foot this approximate difference, that’s the way out of your lease (there are some steps I’m leaving out, but you get the idea of where this is headed). Once you give us the values for #1 and #2 we can explain more.

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3

Oh, wow, I have no idea, and I don’t think I’ve ever seen this discussed here. There was a /reddit thread from a few yrs ago on the subject, but no one ever gave an “official” answer (and OP never followed up).

IANAL, but I imagine MBFS will say that A2 allows them to assess all remaining lease payment, regardless of what is written in B.

Maybe call MBFS to ask?

4

“Unpaid” in this case is a bill that is due but hasnt been paid. Not a future lease payment that isnt due yet.

5

Aside from the accrued monthly charge mentioned in A1, what else would would be unpaid?

Would your interpretation be that OP would be able to use Calculation A?

6

I would assume language like that would be for covering things like late charges, impound fees, any toll charges that got allocated to the owner of the vehicle, annual property tax that hadnt been paid, etc. Those weird abnormal corner cases that could pop up in rare cases.

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7

I would not necessarily trust MBFS to be honest or forthcoming about the options here. I believe the last time I called them and asked, the only thing they would tell me was the lease payoff quote.

As of today that is ~59600

8

I also read this as a payment that is due, and has not been paid yet, rather than all the remaining payments.

9

I am waiting for offers on the car per your advice. Prior to that, KB seems to indicate that the highest I’m likely to get it somewhere around 45,000.

The payoff required me to call the dealer, and they gave me a quote of 59,600 as of today.

I understand that I could pay somewhere around $15,000 as the difference here to get out of the lease, But it seemed to me that the early termination option, through calculation a May provide a lower cost option, assuming that all future payments are not also due.

10

Of course they will say what is in their best interests but, unless you plan to sue them, they would be the final arbiter of which calculation is used, no?

If you do push for Calculation A, let us know how it turns out (a genuine request, since it would be helpful for us to know).

11

Your early termination cost probablu will be somewhere around there too though, since youre responsible for the difference between the current buyout and wholesale plus a ~4% penalty

12

Contract says any “positive” amount when wholesale is subtracted from adjusted lease balance. Isn’t that value likely to be negative, much of the time (except in the case of, say, an EV w/ a super inflated RV, very early in the lease)?

13

Exactly. I am saying that since the lease balance is likely to be less than the fair market value, I would not owe anything for Calc A(5).

14

The calculation clauses A and B don’t indicate that I am responsible for a difference between buyout and wholesale…only Clause 5 of Calc A says that I am responsible for any positive amount of adjusted lease balance minus the fair market value.

Since the car is always likely to be worth more in fair market value than the adjusted lease balance, I don’t see how I would owe anything on this clause.

For example, if KBB or whoever says the car is worth 45000 and the adjusted lease balance (remaining months * payment) is 27000 ish, then there is no positive amount here. Right?

15

Buyout right now is like $59k and kbb is $49k. I bet kbb is over mmr

16

I’m afraid you may be in for a rude awakening when you get a FMV on a 2023 GLC300 with 6k on the odometer.

Did you try the “get a price” thing I recommended above?

17

Thats not the adjusted lease balance. You buyout is ~ the adjusted lease balance.

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18

Yes, thank you for that advice. Requested and pending responses from givemethevin for a couple hours now, and all I am getting is non-offer text messages asking me how much I want for it. I do need to finish submission to carmax as well. Hoping that comes through quicker.

As long as FMV is above the adjusted lease balance ($27K I think), it shouldn’t matter what FMV is since Calc A only uses it in subclause 5, where it says any positive amount from “lease balance - FMV” has to be paid. Or am I misunderstanding that?

19

Your adjusted lease balance is not $27k. Youre off by $30k+

20

You’re mixing up your lease liability with the lease buyout.

You have a $27k liability remaining if you run out your lease.

You have a $59k buyout if you attempt to take over your lease asset right now.

Since you’re trying to exit your lease early (effectively buying the asset value then disposing of it in one step), the $ you really care about is basically the difference between the fair market value of the vehicle and the $59k.

The 4% and other fees are just more small turds that will add to the shit sundae.

Sucks about give me the vin… they used to just quote you a vehicle value. tell them you want $59k for this GLC300 and see what happens.

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