I need some advice or input on how you all would handle this situation:
We leased a 2019 Highlander Limited, 36 mo term which matures in Feb 2022. The lease was supposed to be for 15K/year. My wife and I signed at different times (I can almost be certain it said 15K on the screen I was signing) but it turns out the final paperwork is 12K per year. I reached out to our salesperson who then reached out to SETF (I have a copy of this email, but this was a way back) to get it corrected. That sales person was let go and we dropped the ball after that so nothing ever happened. All my fault and I understand that.
Current day, thanks to COVID, we may exceed the mileage a bit or be right at the 36K at maturity. Not a huge concern right now and I understand that if we don’t do anything about it, we effectively signed a worse deal than agreed to. My question comes to a Toyota dealer buyout of the lease, which I believe SETF is allowing? I assume the buyout is higher based on the difference in residual. Can I calculate what that difference is based on an estimate of the RV change and money factor? The dealer is a client of ours and the owner a good friend of our company so I think I can make something work to where we are made whole but I want to understand what that should look like if we can’t correct paperwork this late in the game. We may decide to let it go before maturity, if possible, which is what has raised this question.
Correct. With an asterisk. Some financial services are refusing third party buyouts, only letting their own dealers do buyouts, or charging market value. I believe you will be fine with a SETF dealer/Toyota dealer but this may be incorrect.
This is like way out of the question. By a year at least.
Okay, so you need to figure out the value of your car and your buyout. Your dealership/client can help you do both. Asses their value against other offers from carvana, or other dealers to find a true market value.
If the lease paperwork ended up being done with 12k miles/year then the residual should have automatically adjusted to reflect that since the residual value is locked by the bank based on length of terms and miles. So you shouldn’t need to do anything to “be made whole” unless for some reason your lease paperwork shows the residual for the 15k miles instead of 12k miles.
Actually sounds like it may have been a serendipitous mistake since you think you’ll end up at or close to 36k instead of 45k.
The issue is that the payment amount remained the same, regardless of the change in mileage and RV. I assume to make that work they just had to incur less of a discount on the vehicle.
Running quick numbers from Carmax shows a purchase price of $37K for the vehicle and the current buy out at $32,100. I will run the others and see where we are at and then, assuming we want out, push for the market value buyout with the dealer. The remaining $830 would then be the portion “to make me whole” in this.
Just to explain the formula used, essentially a 15k lease has an RV that is 2% lower than a 12k lease. Your buyout is lowered monthly by the base payment (taxes and rent charge don’t reduce the value), so your total buyout at lease end would be 2% lower, but because it’s up in Feb 2022, you’ve probably made 32 of the 36 payments required (obviously this number will vary if you did a 39 month lease or something like that, or because of when in the month it is, you’ve actually made 31 or 33 payments).
2% of MSRP is the RV delta, 32/36 is the amortized amount that’s been applied.
This lease began in Feb 2019? One would think that would have been the time to be “made whole.”
If you don’t have anything beyond an email by a former salesman to prove the lease “was supposed to be” 15k/yr (while all the signed paperwork says otherwise) then you are probably wasting your time.
