Hey @Trevor to help with the education around here on this forum, would you mind first sharing what your assumptions would be around totaling a car where you’ve done a one-pay lease?
It would be interesting if you could show your thought process here, so the people with the answers can more precisely answer for you.
For example, if you did a $30,000 one pay lease for a 36 month term. What are your honest expectations as to what would happen if the car was totaled in the first month?
Hi,
The dealer has asked me to return my vehicle due to 'unable to assign the lease". I don’t know much about the financials on the back-end, but I assume this is something similar to “sell the loan note” or “get bank approval for your loan”.
My question is: for a 1-pay lease where I paid upfront, is this still possible? Why wouldn’t Hyundai Lease Titling Trust approve a loan where all payments are already done at the start?
Or,
Is the dealer just using this as an excuse to cancel my lease agreement? But, why would the dealer want to do that?
(Probably unimportant but to save time if someone asks: I’m in California, my credit score is 800, the vehicle is an Ioniq5, dealer took off 2500 from msrp and included a 10500 cap cost reduction.)
On a one-pay lease, you still have the lessor’s asset. You only paid for the depreciation plus finance charges.
So the lessor still has the risk that you won’t return the car at the end.
Ask for an explanation for why HMF declined to fund it.
There’s one huge payment not made at the beginning of a one pay that remains on the books. Its the one you pay for with the car at lease end.
If the dealer is asking for the car back, then they did not get funding due to issues on the credit app
You are legally liable to return the car and get back your money
NOW what can happen
They present you a new agreement which corrects the issues with the previous app and TRY to hide in new pricing to cause you to payout more. Keep an eye on things like ‘Cash Due at Signing’ and Monthly Payment to make sure they don’t slide one under you.
Dealer says, “Error due to ransomware attack, we just need to redo the contract but your payment won’t change, come back tomorrow to re-sign.”
Thank you – I’ll watch for changes to the Turn-in Fee.
Thank you – that’s a great point that I make a big 4698-lbs payment by returning the car at the end of the lease.
Turn in fee charges (aka Disposition) don’t change as they are fixed.
Make sure they don’t change the leasing company as that is pretty huge
But also keep an eye on Cash Due and Payment (In your case 1 and the same)
And it sounds like their F&I checked the wrong box or didn’t fill in the right square on the manual form.
So GM will refund any difference in a Total Loss, nice.
Most of the people here who post TL are usually driving beemers or mercs and I believe they still take the TL difference.
BTW, in case anyone was wondering about the result:
About two weeks after signing, the dealer called me back in to re-sign. The re-signed papers have very slightly different numbers (the MSRP increased by $60) but all of my payments and fees (and future fees) remained the same.
New here, so apologies if I’m posting in the wrong place: I have a pretty basic question about one-pay leases: BMW is currently offering lease incentives with a MF which equates to a 2.7% APR. The one-pay MF (converted to APR) discount is a bit over 1%. The various one-pay guides I could find (including here) say that if you have the liquidity to pay up front, and subject to risk of vehicle loss, this is a good thing to do because you’re reducing the MF rate and the total cash outlay over the lease period.
Makes perfect sense for an arms’ length lease MF, but here, the MF is itself an incentive rate. Say I can invest the one-pay amount risk free at 5%, aren’t I better off doing that and making a 2.3% interest spread over the course of the lease, rather than selecting the one-pay? Every discussion I’ve found on this topic seems to ignore the opportunity cost of investing the initial payment.
You have to keep in mind that the rate of return for the one pay is not the difference in apr. Youre saving 2% against the whole value of the vehicle, but only putting out a small percentage of it. You need to calculate your actual equivalent rate of return and then compare that to the post-tax potential rate of return on a separate investment.
Thank you…your point on post-tax returns is right and makes it simple. Post tax, that 5% is close to the implied lease financing cost, so any savings (in this case $4,000) is additional present value created by the one-pay. (I think). I may nerd out and lay this out in excel so I can better understand how the math would work: if I had a 10% post-tax return on riskless investments (to take an extreme example), presumably the opportunity cost of that one-pay outlay would outweigh the nominal dollar payment savings.
If you are set on the specific car you can calculate the delta between the 1 pay total cost vs the 36 month total cost
Then compare that to how much your risk free investment is raking in
Matt shared an example once upon a time
What tax-free / risk-free investment were you thinking guarantees that rate over this term, today?
Man, dug that one up from the abyss
I have general question about one-pay vs DAS/Monthly.
If total one-pay is 10% less than total of my DAS + Monthly for 24 month, does it make sense to do one-pay?
First time leasing, so no idea what are pros/cons of doing one-pay.
Thanks.
Lots of threads if you search, and knowing which brand(s) you’re looking at would help
Assuming you get a prorated refund if lease ends early (eg crushed by a meteor while empty in a parking lot) - if this is the car you are leasing, AND you have the funds, do you want to pay the absolute lowest total cost for that rented utility, or do you prefer to make payments??
Generally MSDs are somewhere in the middle, tie up some funds for less rent charge. If one pay is offered, it usually has the lowest total lease cost since the captive never has to worry about the car again until disposition.
Just out of curiosity. What’s the lease transfer process for a OnePay lease?
Typically who ever is taking over the lease will pay you pro-rated amount left on the lease balance (+-) whatever it incentive you offered or DAS your asking for. Just do the math so that both sides are in the same page in terms of amounts.
