Lease Return Early termination & Notice of Sale

Ask the Hackrs
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1

This is for GM Financial in California

I had a previous lease with Mercedes, so I didn’t think anything of the following when I returned my 2018 Volt to the Chevy dealer.

  • Single-Pay 36 Months, 36,000 Miles Lease on 6/17/2018
  • Turn in 3 months early and driven only 27,907 miles of 36,000 miles
  • No issues with pre-inspection. It was in perfect condition

I asked the dealer on the phone if there would be any issues on returning the lease early because I had already paid off lease terms in full. (My fault for not going back to my lease agreement after reading)

I received a letter of early termination from GMFinancial today explaining …Because your vehicle was returned early, CA law requires us to tell you that the Gross Early termination Amount is $XX,XXX.XX. We are not asking you to pay this amount now. After the vehicle is sold, we will use the Gross Early Termination Amount to figure the amount you owe.

After receiving that notice, I found the following
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=2987

The letter says they will sell the vehicle at a private sale no less than 10 days after the Date of the Notice. Even though I just received the letter today, the date of the notice is 3/1/2021. So I have a day before they can sell.

Has anyone else gone through this and have any recommendations on options I have? I have already paid the lease so there is nothing left to pay. I will definitely call in the morning and ask for clarification and see if I can receive some kind of waiver if that is possible. Or is it too late to take back the car and continue the lease for the last 3 months? I had dropped off the lease on 2/26.

I’d appreciate any help/advice.

2

What is the residual on the contract? You will be responsible for the difference between residual and what they can sell for. Hoo boy! That’s how to snatch defeat from the jaws of victory.

3

I was afraid of that. Th RV is ~$16,800.

I’m hoping for some kind of miracle while I wait on hold.

4

yes. The contract ended when you signed the odometer disclosure and handed them the keys. They won’t restart the contract now, especially since they paid to have it sent to the auction.

Your only hope is to find someone at GM willing to do a goodwill adjustment should you end up with a bill. Or, the car fetches a premium at auction, wiping away your responsibility.

5

Someone posted a similar letter before, the one that came after the car was sold at auction.

It said the lessee owes the lesser of (A) remaining payments + end charges or (B) negative equity.

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I just got off the phone with someone at GMFinancial. CA requires that if a lease is turned in more than 30 days early, they have to first sell the car at auction, then apply the amount they sold the car for to the cost of ending the lease.

If the amount they get for the car is GREATER than the lease termination, they then credit the extra as part of ending the lease.

But if the car sells for less that the RV, I will only be responsible for the Disposition Fee, applicable taxes, and items found during the pre-inspection.

Wish there was a better method of sending this disclosure. It scared the bejesus out of me.

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