Hi Everyone so my mom has a Mercedes lease that is ending in December this year(in 3 months). However during covid she did the deferred payments($4,390 in total unfortunately) and also she went 12,000 miles over her lease mileage. So im trying to help find the best way out for her. With this scenario is there any advice you could give me that would help? Should she go into another lease? should she buy a car instead? Is there way to negotiate any of this ?
Any help would be greatly appreciated.Thank you all in advance
Her choices are to pretty much either close out the lease and pay the penalties or sell the vehicle and realize the negative equity. You’ll want to get the current buy out amount and compare it to what carvana/vroom/etc will offer to purchase it. Go with the option that costs the least.
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Okay thank you so much for the advice. she also told me when she talked to the dealer about getting into another lease they said they will help take care of the deferred payments. do you think that normal or there not telling the truth about something? it didn’t sound true to me. I feel like they are probably charging more In lease payments Instead balance it out
So you cant pull-ahead deferred payments. So they are probably rolling it into the lease.
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I’m sure what they’re doing is just rolling it into the next lease. Then she gets to pay tax and rent charge on the first lease a second time. You don’t want that.
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Other than what others said I would help her with her next lease to be very cheap and have more miles than the one before.
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One option no one has mentioned is for your mom to simply buy the car at lease end (or now, for that matter).
Obviously this option isn’t recommended in most scenarios, usually because you can buy a comparable car for cheaper than the residual.
However if the alternative is coming out of pocket $4,390 in deferred payments + $2,400 mileage overage + $595 disp fee + any wear and tear, then it could be the path of least resistance depending on Mom’s financial situation.
But as mentioned above you really need to get the current payoff and offers from Carvana, Vroom, etc. to see how much negative equity you have, and compare that to just turning the car in and writing MBFS a check for $7k+.
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I agree with Jeff above, purchase might be the path of least resistance, (i.e) the least money out of pocket, and depending on the credit situation the payment could be adjusted, you would have the flexibility to decide how many years to finance it over. But all of that would be much clearer if you know what your buyout is and also it would not be a bad idea to get the offers from vroom, carvana etc.
Purchasing the car is going to require paying the $4,390 in deferred payments.
Either it is itemized or it’s embedded within a higher payoff
Okay I just found she reach out to those companies and they are giving her 18k to 19 k for the car. and subtracting from how much the payoff is it’ll be a lot more than the 7K. Do you think it’ll be just better pay that off and start fresh with a new lease?
No doubt, however again depending on Mom’s situation it may be easier on the pocketbook to roll that $4,390 into a new 60 mo loan at 3% than have to come out of pocket for the full $7k+ just to turn the car in.
What is “better” is entirely subjective and dependent on your Mom’s financial situation.
If she’s flush with cash and it’s no big deal to have to come out of pocket over $7k just to turn the car in, then yes, chalk it up as a learning experience re: leases and over mileage, etc., pay the $7k and be done with it.
However, the fact that she deferred some payments due to covid and hasn’t caught back up yet leads me to believe she’s not flush with cash. If this is the case, then just buying the car now might be the easiest/best option, as I just mentioned above. She won’t have to pay the mileage overage, disp fee, or any wear and tear, and she can roll the $4,390 in deferred payments into the new loan.
Okay just curious is it possible to roll in the 4390 into a brand another car instead of the one she has right now. Or can you only roll it into the same car that is being lease at the moment?
You should be able to roll the $4,390 into a new lease, which is what the dealer was doing above when you mentioned that they were offering to help her take care of the deferred payments.
That said, if your mom is driving that much to be 12k over mileage, and has yet to catch up on the deferred payments, I would seriously ask yourself whether leasing another new Mercedes including a bunch of negative equity is really the right decision at the current time.
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If she had to defer payments maybe getting another Benz isn’t a good plan, could time to downgrade. And if someone had to defer payments, will they even qualify for another lease?
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It’s possible: as long as her credit score wasn’t otherwise impacted by the deferral or anything else related to covid.
Roughly it would look like
- finding a lease with enough incentives to cover the deferral (not the mileage overage), and ideally a low MF
- working your best deal
- Once you do, telling them you have another lease with a covid deferral you are grounding, and asking them to cut a check for the deferral to MBFS and rolling that in to the new lease (so you’re paying rent and possibly tax on that amount for 3 years)
She’d still have to pay the dispo and mileage overage. If you want it all covered you’re likely looking at another MB.
Totally agree, maintenance and disposition are high on MB, MF isn’t always good. Just going to make a game of “bury the negative” more interesting.
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Throw it on a couple of credit cards, then get money back on the next purchase and payoff the credit card. Mom needs to take a look at her financial situation and figure what’s important, keeping up with the Jones or going into a crap load of debt. I’d tell her to consider a Bolt! You could roll it all in.
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No she really didn’t have to. She was listening to one idiot family members who told her to do it and that the leasing company would extend her lease for the same amount of months that were deferred 
If that’s the case tell her to not listen to the idiot and just pay the deferred payments and move on. She needs to be listening to you! You’re the one on leasehackr!
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