While talking with Chrysler Capital about terminating my lease early, they mentioned it would hurt my credit to do so.
I understand that I will owe the early termination fees and my remaining lease balance, there is no issue with making the payment once the return is complete. But if I pay, would it really hurt my credit? Anyone familiar with this?
For context, we are about up on our mileage and I would rather pay the ETF than the insurance for the remainder of the term, but if it is going to hurt my credit I would reconsider.
I don’t know the exact answer to your credit question. Maybe @trism@jeisensc et al might.
But you should consider the premise driving your early termination decision.
Do you no longer need a car? If you do, the cost of the replacement car plus its insurance plus the ETF should be compared to keeping the existing car and paying the mileage charge.
As long as you get out of the lease in a way that’s enumerated in the lease agreement (and pay all money that’s due in a timely fashion), there’s no negative impact to your credit.
Defaulting on the agreement is the road to credit perdition.
I think the problem is your specific use of the words “terminating my lease early.” If a CCAP representative hears those very specific words, then they are likely assuming you are trying to terminate a lease more than 90 days from the maturity date without paying off the account or without paying the remaining payments.
I think what you’re really trying to do is what CCAP refers to as a “customer payoff”. While they may sound similar (you’re getting out of the lease), the early termination option may actually harm your credit since the early termination process is much more involved and will be affected by what the car is sold for auction.
If you call CCAP back, make sure you’re 100% clear that you simply want to do a customer payoff; and you want them to tell you what is the amount owed under that option. Avoid using the phrase “early termination.”
You can see here in their fun little matrix that the Dealer Buyout (with double asterisks) tries to differentiate itself from a true “early termination”
Thanks for responding. As you noted, we have reached our mileage limit. So, we have been driving the car I had before leasing this one. We will not be leasing or buying another at this time and I will be continuing to drive the old one (I work from home and don’t need a fancy vehicle). If we fulfill our lease term, the leased vehicle will be sitting and not used. I would hate to pay the insurance for it during that time (250month/2000 total) and was thinking it would be a better financial option to return it early, pay for the remainder of the lease and the early term fee.
Thank you for your response. I had a hard time understanding why it would hurt my credit when I would be following their terms for early return. I plan on paying the full amount ASAP when the final bill comes out. I don’t want to make the situation worse by doing something I thought was a good idea and have it hurt in the long run. Thanks again!
Oh my, I am so glad you responded. My wording probably almost cost me. I intend on paying off the account and customer service says I can’t pay it ahead of time and have to wait for the final bill. I intend on paying it as soon as I get it.
So it is a customer payoff even though I am returning the vehicle? On your lease end grid, would it be more along the lines of the Market Value Price section?
My jeep is worth (26k-ish) a considerable amount less than the residual value (38k). Without purchasing another vehicle, I am sure the dealer won’t want to absorb any of my fees.
You’re treading into new territory since the vast majority of people who get a CDJR product end up lemoning out their car before lease maturity (this is sarcasm).
I think the closest line item on that matrix that you’re trying to do is called “Dealer Payoff” but with the caveat that you want it as a “Customer Payoff”.
It’s more likely than not you’ll need to have a dealer involved to inspect/ground the vehicle and also punch stuff into ChryslerDirect to identify the total sum of payments (including sales tax) you owe plus any fees. The dealer would take possession of the vehicle but the title remains with Chrysler Capital.
You’ll likely be invoiced by “Openlane” instead of paying the dealer. But this is where I’m not terribly certain on this since there’s a chance you have to pay the dealer so they can then pay the Openlane invoice. I suggest you make 100% certain the flow of funds before you complete this “Customer Payoff.”
Also to be 100% clear, you DO NOT WANT to do the “market value” price or purchase. You don’t want the title. And I don’t think the dealer wants the title either.
