Lease started June 2021 for 36 months $390. Good rate. Lease in company name; I am co-lessee as guarantor of lease. I use vehicle. I am retiring; I am indifferent as to whether I continue to drive this vehicle or not ; although I am willing to make lease payments. since I will be off payroll so business partner understandably does not want the liability of me driving vehicle since I will no longer be on payroll. I would be willing to continue lease in my name only but not surprisingly Ally will not allow this. . What are the options for the company other than continuing the lease payments till mid 2024? I am thinking buyout will not be worth it to the company. Thoughts?
Buy it and get a normal loan on it?
Need to know the numbers. What’s the dealer buyout and the lessee buyout?
What did the selling dealer or any other Ally-affiliated dealer offer?
Can anyone buy it? Toyota in 2021 did allow third party buyouts not sure if they still do but your lease is through Ally, do they allow it? I am surprised they are not allowing you to take the lease since you are already on it
Assuming Ally does allow third party buyouts at the same price and there is no prepayment penalty, then get estimates from Vroom, Carvana, Carmax and some of the others and see what it is worth.
$390 is a good rate and not something you can easily replicate in the current market but who knows in a few months what will happen
. I leased it as a company lease but now come to find out that the way Toyota/Ally did the lease was as a personal lease with the company and myself being co-lessees. Vehicle has been insured thru company. I am co-owner and retiring. My business partner does not have use for the vehicle and understandably does not want me driving it since I will no longer be an employee(i.e does not want liability in case of accident). Ally says we can pay $5082 to turn it in early which is less than lease payments left. Only other option per Ally and Toyota is to have dealer buy the vehicle at $33,911 plus taxes and dealer fee which comes to a total of $36,683. Carvana would pay $34,770; Vroom $32,174. I do not believe third party buyouts are allowed by Ally/Toyota. Seems like right now we would be upside down no matter what we do? I will see if my personal insurance company would insure it and then I would take over lease payments. However,since the company would still be on the lease, in an accident, a claimant would go after not only me but also company which is a concern of my current (soon to be former) business partner. Bottom line: assuming we want out of the lease, what is the lesser of all the evils?
Saphire…thanks for your response. My goal would be to get the company off the lease altogether and have it in my name only. so my company does not have exposure when I am no longer an employee/owner. But Ally does not seem to be willing to do this.
No leasing/finance company allows names to be added/removed from the contract without a refinance (that I’m aware of anyways). Since it is a lease, they won’t touch it. Only option is to ground it, and pay any remaining payments, sell it as if they owned it (if there is any equity in it; if not, if the value is less than remaining payments, they could pay that instead), or to refinance into traditional loan and sell when it breaks even.
Saphire…your answer has confused me. Just want to be clear. You say to " ground it and pay remaining leasing payments." We can get out the lease now paying the $5,082 and return the car. Is that what you mean?Other option is to have Toyota buy it for the $36K and possibly turn around and sell it to a company like Carvana for $34K, which would be a $2K loss. Probably the lesser of the two evils, right? What do you mean when you say “sell it as if they owned it (if there is any equity in it; if not, if the value is less than remaining payments, they could pay that instead)”? Who are the “theys”? Please explain. BTW I am indifferent as to having the car for personal use and really do not see refinancing into a traditional loan and making those payments.
Yes, that’s option 1
No, that’s not an option. If you sell it to a Toyota dealership, it is now their car. You’d have to buy it from them at that point, pay the sales tax and then resell, which would make -0- financial sense. You could sell it to them and pay the difference in cash between what the dealership buys the car from you at vs the remaining balance owed to Ally. If you wanted to sell the car and Ally doesn’t permit selling to a dealership, you’d have to buy the car outright from Ally, pay sales tax, then sell to Carvana. OTOH, if Ally allows you to to sell the car to anyone, just sell it to Carvana/Vroom/et al. directly, and whatever amount you still owe, you’d have to pay Ally in cash to cover the deficiency. It still may work out cheaper in this way than to pay remaining 5.1k owed to return it (ground) now. You’ll have to do the math.
Yes, you can sell it as if you owned it (assuming that Ally permits it). You have a retail payoff number that will satisfy the balance owed on the car as if you financed it from the outset. The “theys” in this case are you and your business partner since both of you are on the lease. The reason I referred to you as “they” is because I was answering Saphire in regard to their confusion Ally wouldn’t take the business off the lease easy-peasy. It doesn’t work that way.
Toyota isn’t involved if the lease is through Ally. Toyota has no financial interest in the car whatsoever. It’s 100% Ally’s car. I assume you mean that you talked to a Toyota dealer, and they told you what the payoff would be.
Now, if Ally is forcing you to sell to a Toyota franchise dealership, that might be an issue, as they will likely underpay for the car knowing you just want out, unless they’re desperate for vehicles on the lot.
So I have just spoken to Ally and Toyota again to clarify. Ally customer service rep tells me if I am buying the car at 36K(quoted by dealer since Ally would not tell me a buy out price), then I am buying it from the Toyota dealer who has to buy it from Ally. Toyota is saying that is not true. That the 36K quoted me (by the dealer) is for buying it from Ally, not the dealer! I asked the Toyota finance guy what is in it for Toyota dealer?. He says nothing other a $899 dealer fee for handling it. Finance guy told me that the dealership would not buy it from Ally since Ally wants the dealer to pay 42K. By the way Ally says I can go to any dealer to do the buy out, including carmax. Toyota is saying that no matter what dealer I go to, the buy out price is not negotiable and is specified by Ally. Does this make sense?
mp11477. I misstated in talking about Toyota buying the vehicle. Toyota does not seem to have an interest in doing that. All I know is I or my partner (who remains in the business) can buy the car for 36K total by going to the Toyota dealer to consumate the deal. Once one of us has ownership of the car, the owner (he or I) certainly can sell to whoever one wants. I
not true. The Toyota dealer facilitates the purchase between you and Ally. They are simply a middleman. You would be buying it from Ally. The Toyota dealer would simply be processing the transaction, and collecting a doc fee (presumably the 899 you referenced). You WOULDN’T be buying the car from the dealer…You WOULD be buying it from Ally. You WOULD be using the dealer as a facilitator of the transaction.
That’s likely true. The 36k is your buyout price. If a 3rd party were to buy it, many leasing companies will charge a “market rate” to the vehicle, which is likely the 42k the dealership is referencing.
Yes, this makes sense. You will likely hear the same 42k figure being thrown around if you go to Carmax, Carvana, Joe’s Lot o’ Cars, etc… It, in fact, is not negotiable, and it is what Ally will sell a 3rd party the vehicle for. The 36k is YOUR price…not the 3rd party price.
Yes, this is true, as you would be the owner now. That said, you would also pay sales tax on the 36k to buy it, so your probably in the hole another 2k or so + title and doc fees, so add another 1k. Now, you’re up to a 39k payoff. Looking back at the offers you received, you’re now in the hole about 5-7k.
So it might be a wash with regard to just paying the 5.1k Ally wants from you to turn it in early and be done with it, and without all the hassle. Unless you want to pay it down for a year or so and continue to own/drive it, and revisit your options next year with regard to getting rid of it. However, you’re likely still going to be behind as the vehicle will continue to depreciate, you’ll be putting miles on it, etc…and who knows what the used car market will look like next year with regard to values. If Carvana files for bankruptcy, and floods the market with used cars, coupled with slowing and slowing demand, and repos on the rise, it could be ugly.
I’m not a tax expert, however, as a business owner, would you be able to write down the 5.1k Ally wants to dump the car off today?
Since this is an Ally lease, unfortunately you have few options.
- Call Ally and pretend to be a dealer and ask for the dealer pay off, and for the buy out/pay off for you (your customer). The dealer pay off could be 40k, but the personal buy out to the “customer” could be 30k for instance.
- Log in to Ally website and find the early term turn in price. It’s usually less than the remaining cost of your lease payments, and is basically grounding the lease, BUT, you can still be dinged for disposition fees, damage, excess wear and tear etc.
- Find a “certified” Ally dealership (which is damn near impossible to find as Ally won’t tell you and any dealership you reach out to has no idea what you are talking about) who can buy your car for a reasonable fee over “your buyout”
- Reach out to a broker here on the forum- DSR leasing. They can buy out Ally leases at affiliated Ally dealership prices. Text Anthony at 949-544-1669
Good luck!
1 Like
My rental car company is willing to take over the lease
Ally does not allow lease transfers, so you cant take over the lease.
Since when? We have always done it…
Covid casualty
This topic was automatically closed 60 days after the last reply. New replies are no longer allowed.