Lease payoff question?

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1

Hi Leasehackrs, Im new to understanding leasing and wanted to know how a lease payoff is calculated?

Disclaimer: (I haven’t leased yet)

Ive read some people say the payoff would be residual + remaining payment, is that right?
Ive always wondered if i lease a car and ex.(if the cap cost is $50,000) and i wanted to buyout or sell the car next day, will be the same amount or would it be residual + remaining? Or if it is the cap cost ex.($50,000) and after a month by making a payment would the payment- interest amount would bring down the payoff every month?

Thank you guys in advance!

2

There has been some debate over this lately. In my Honda passport lease, the pay off is the residual plus the depreciation sum of the remaining payments and does not include interest/rental charge. That’s to say that the payoff is significantly less than the residual plus the sum of my remaining payments.

It’s important not to confuse pay off with termination amount if you turned in the lease early which is usually the sum of the remaining payments plus the disposition fee.

3

Also if your in a full tax state you would essentially be paying sales tax twice… your lease incentives would have to be greater than purchae incentives to cover the difference once factoring acq fee, gov fees, sales tax on the intial lease deal.

4

Is this different for all manufacturers? Or does it depend on the state? I am not in a full tax state, so then that would probably mean my dealer payoff would be LESS than the residual plus remaining payments?

5

You’ll pay tax on the remaining payments and the residual, the government always gets it’s cut.

6

Okay, then what is all of this that I’m hearing about how the actual dealer payoff will be less than that? That taxes aren’t taken into account because the dealer doesn’t pay taxes? I am just trying to figure out in my head if I’m going to be in the hole or not. I have one current offer of $15,000…and if I consider a payoff amount being my residual on my contract plus all my remaining payments than it would be around $16,145. So I am trying to find out if that’s the number it would be, or if it could possibly be much lower than that.

7

Don’t try to calculate your payoff. Get it from the lender.

8

Also, make sure that your payoff amount includes sales tax. Some do, some don’t, and you don’t want to be in for a surprise.

9

I am trying. Hyundai refuses to give it to me. Says it HAS to be requested from a dealer. So I went to CarMax Saturday and got an offer from them. STILL waiting on them to call me and tell me what my payoff is…told me they’d call me Monday. Now it’s Friday.