How negotiable do you think they will be on the pay off amount? Let’s assume I have somewhere in the ballpark of a 175000 and up to 300000 miles when i attempt to buy out the lease, do you think they will be negotiable at all?
I’m assuming they wouldn’t be at that point because I would have racked up so many miles on the car I’d been a very badd situation, but I’m just wondering if there’s any creative ways of negotiating the buy out with them even though I have high mileage?
I appreciate everyone’s feedback by the way! Thank you!
If you have debts you can’t pay then saving money now that is likely to be taken from you later doesn’t make sense. Especially as that would then just leave you with a vehicle with $30k negative equity, a lot of repairs/maintenance along the way, plus whatever other debts you have.
Find a good financial advisor as you may well be delaying the inevitable, while running yourself and your vehicle into the ground.
Doubtful they will cut you a break on the buyout price when it comes to that point, but you don’t know without asking either, and the worst they can say is no.
I would be careful what information you share with Lexus Financial regarding your current mileage overage situation. My suspicion is that using the vehicle for commercial transportation violates the terms of the lease.
If you tell them that the car has 130k miles on it now, that is going to raise a flag and I could see any number of scenarios coming to fruition at that point, including invalidating the lease and making the full amount payable that day.
What would happen if he just turns it in with whatever mileage he went over and just didn’t pay for the overage? If his credit is ruined and creditors are already after him, why not add Lexus to that list already when they ask for the overage payment? Depending on if he qualifies for bankruptcy protection, this along with the other creditors will be wiped clean maybe?
There’s a chance Lexus/Toyota would sue him for the deficiency. If he goes through BK without discharging a car lender, it won’t be too difficult for him to get another auto lease/loan post-discharge. However, since dealers use auto-enhanced FICO scores, discharging an auto lender in BK would significantly impact his chances at getting another car loan/lease with favorable terms. Maybe that’s not a concern of his, I don’t know. But its something to consider.
I mean we’re talking about $60k in overage fees…that’s nuts! If he buys it out, it’s still a crazy amount to pay over the value of the car not to mention the maintenance.
Auto-enhanced or not, bankruptcy will ruin his chances of getting any type of loan with favorable terms in the future. If planning for bk anyways, throwing out thousands of $$ for the slim (to none) chances of getting a better deal in a car loan in the future does not make sense.
If he doesn’t discharge an auto tradeline, I wouldn’t say his chances at favorable are ruined. There are car companies out there who will gladly offer credit to a post-BK customer with semi-favorable terms simply to make the sale. Mitsubishi and Nissan come to mind, Chrysler as well (their in-house lender is a major subprime lender). Will he be driving anything desirable? Probably not. But he won’t be hit with a 24.99% APR either, maybe closer to 11-14%. You’re right that it’s not favorable compared to what we see here, but there are worse outcomes.
Would those lenders offer better terms just because he did not throw Lexus Financials under the bus, but pretty much every other creditor? I find it hard to believe.
This is pretty accurate. The best bet in the event of a BK filing is to keep the payment current going into the BK and simply not reaffirm the debt. The tradeline will report current up to the filing and then simply state “Chapter 7 Bankruptcy”. It basically will be neither positive nor negative. It will just show as a closed account. OP will likely not be able to finance again with Toyota/Lexus for about 10 years (or longer) but it won’t have the effect of a repo or charged off balance.
Frankly there is no ideal scenario in this situation, with or without BK.
Well, if it was small money, then I would say go for it. In his scenario, we are talking about $1800/month additional throughout the end of his contract. I am sure he can make better use of that money including investing on a used car in cash, continue working in transportation and get himself out of debt.
