Single Father with Negative Equity in a leased vehicle, looking for help!

Single father in California looking for some help. I am currently in a lease with the following:

  • 2014 Toyota Camry Hybrid LE, 36 month term, 36,000 miles (12K/year)
  • The residual is $16.468, Disposition Fee is $350
  • I am over miles by about 10,000 and the mileage penalty is $0.15/mile, so about a $1,500 penalty
  • I believe the vehicle is in “good” condition with minor wear and tear

I am coming to the end of the lease and need to decide what to do. I have an appraisal from Edmunds showing me a private party sale of $13,748 and a trade in value of $11,438, so it appears I will have negative equity in the lease.

I am looking for some help on what my best option is and have some questions:

  1. If I simply turn in the car, I understand I will be responsible for the overage on mileage ($1,500), the disposition fee ($350) and any charges for wear and tear above “normal”. I am also responsible for any negative equity?
  2. How accurate or reliable is the appraisal from Edmunds? Should I obtain quotes from other dealers in my area to see if I can get an offer closer to the residual?
  3. Do I need to get quotes only from Toyota or should I try other dealers?
  4. Is there anything I can do to offset the overage on mileage and/or negative equity in the car?

I would greatly appreciate any help you can provide.

Thank you,

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You are not responsible for negative equity. It’s Toyota’s headache now. Just return the car and swallow $1,850. You won’t get anything close to your pay off, no matter where you go. If you get another Toyota, they may even “forgive” some of this $1,500 and will not charge you $350 disposition. But think twice about leasing again or get 15K/year.
For your peace of mind, try this:

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Why don’t you buy the car and get a loan to cover the cost? You still need a car right? Toyota Camry’s are good cars and should last a long time, plus you know the car’s history already. You could refinance a $16K loan for about $300/mo for 60 months. There is no penalty if you buy it out.

Because he’d have to pay $16,500 for a $12,000 car.


Try to get a dealer to forgive the whole wear and tear overage with a new Toyota lease. Get the best leasehackr deal you can and then look to swap out of the lease to get out cleanly.

This may even work on a new Lexus lease (e.g. CT200H).

Call your lease company and see if they will negotiate the buy out or the overage/wear fees if you lease from them again.

Thank you all for responding, I really appreciate it! How should I approach my current dealer and/or leasing company to try and get them to “forgive” the mileage overage, wear and tear, and negative equity? Is it worth it for me to “shop around” on lease deals in my area and use the lowest capitized cost, money factor, etc as leverage against my current dealer or lease company? I guess I’m trying to understand what’s in it for the dealership and/or lease company, other than keeping me as a customer.

Thanks again!

there’s really no such thing as “forgiving” overage. If you agree to lease a new car from them, they might agree to charge you less or not charge you anything but it’s in return for taking a new car from them. You have 3 days to get a new deal if you’re going to go with another lease as it’s the end of the year and the best time to get into a lease. However you drive too many miles so if you continue like this all you’re doing is delaying the inevitable.

if you decide you want another lease, get one with 15k mi for sure. You need to get the inspection done that way you know if there’s really any wear costs. If there isn’t, i’d go negotiate a new car and have the dealer fight with toyota financial to let you off the hook, it’s easier that way, they have an incentive to get it done by putting you in a new lease.

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@305Hackr just said what I was going to say and what I really meant by “forgiving” - they will not actually “forgive” overage/excess wear & tear, but may charge you less. If you lease/buy from them, they may make it less painful for you. Start conversation with your dealer ASAP and see what they offer, but be prepared before jumping on any deal. Shop around with other Toyota dealers, they are all motivated now.
Not sure if you even need an inspection if a Toyota dealer takes your car.

In your situation i would just finance it and keep it for 5 years. Usually these cars run forever. With 5k-6k in negative equity is almost 150-180 increase in your monthly payment for any lease you get add that on top. Again, this is my opinion. At least in 5 years you got some equity. Plus the way you drive you jave to get at least 15k miles a year, which will affect residual and the payment.

As the others have said, getting another Toyota is probably your best bet to get as much of the charges waived as possible. However, this time I would recommend considering buying & financing a car. Maybe a 2014+ Corolla? It’s as big as the 2014 Camry inside. No seriously, it has more front AND rear legroom. And very fuel efficient in all but the base trim, and the Eco trim is 2 mpg more.

Otherwise, walking away @ $1,850 is better than buying it with $5-6k of negative equity. IMO

Well are 10k miles over now or expect to be at lease end, whenever that is. That will change your calculations.

Leases only make sense for people who don’t drive a lot of miles, you are better off buying a car if you drive a lot. If you roll your overage losses into another lease you’ll be in the same position again at the end of the next lease. If it’s about getting the lowest monthly payments, may be best to buy the car and finance it over a longer 60 - 72 months and then it’s yours (although you’ll have negative equity for the first few years of the loan).

If the size works for you, the Chevy Volt may be worth a look. With any luck, you would receive the $1,500 CA rebate around the same time Toyota Financial bills you for the mileage penalty. The Toyota lease should qualify you for the $500 conquest chevy rebate. If you are a Costco member, you could also qualify for the $700 gift card. If interested, several people have detailed their transactions in other threads. Most of the deals listed are for 12K miles with a 50% residual. Moving to a 15K lease drops the residual to 48% - effectively an additional $20/month ($36K sticker*2%/36 months) - even if you went to an 18K lease - the discounts achieved in other threads would result in an outstanding lease. I’ve run into the same issue “mileage anxiety” on a prior lease and found myself limiting trips due to the penalty. I only drive 12-13K miles a year, but always get 15K leases - I probably leave a little money on the table - but not really worrying about excess miles has some value to me.

Thank you all again for your input. I think I am going to try the approach of leasing a new Toyota Camry Hybrid and get the dealer to discount the mileage overage and/or wear and tear fees. I will pursue a 15k mileage per year lease and make sure I stay within the mileage limits this time.

That said, I have a few questions:

  1. Is the main goal to find the lowest “selling price”, money factor, and highest residual I can?
  2. How can I work the dealer(s) to get the lowest selling price possible? Is obtaining offers from their internet departments the best approach?
  3. In my negotiations, when is the best time to mention that I currently have a lease vehicle with mileage overage? I tend to think I should wait to mention this until AFTER I have the lowest selling price and money factor I can find. Any thoughts?

Thank you all again, I really do appreciate all of your comments!


  1. Get the lowest price. Residual is non-negotiable and you should not really care about marked up MF if the selling price is right (i.e. dealer compensates mark-up by deeper discount), IMO. Check Edmunds, TrueCar for the exact car you want and that your dealer has in stock. You can definitely do better by $1,500-2,000 then their prices.
  2. Contact a sales manager directly - something like “I’m your returning customer and would like to do business with you again”. Get a quote from them and see what it is. Would be nice to have full break down, but it’s unlikely they would give it to you straight away. If it’s lower then your target selling price, then try to get them even lower, otherwise - reply right back with your price. You don’t have much time now.
  3. I prefer to be upfront and ask them to be the same. But it’s 50/50 if you are not well prepared or maybe not so good in negotiations. After that ask them to reduce or even waive mileage penalty. I’d think the minimum you should shave off is $500.

Good luck.

Hello Ursus,
I just got a selling price offer for a 36 month, leased 2017 Toyota Camry Hybrid of about $21,000. Money Factor of 0.00001, $500 cash down. Not willing to forgive the mileage overage on my current lease, but that discount seems to make up for it. The dealer’s MSRP is $24,243, even though their website lists an MRSP of $28,738, so I 'm not sure how that can vary so much, but either way it appears to be a good deal.

Any thoughts?

Thanks again,

What’s the monthly payment? What is the $500 cash down - drive off or cap cost reduction? RV? Is it really “The dealer’s MSRP is $24,243” or their “internet sale price”? If it’s MSRP, then they are selling you a different car - not the one with MSRP $28,738. Check VIN numbers on their web site or ask to clarify. MF is close to 0 so it’s good, everything else needs clarification.

Hello Ursus,
Thank you for raising the MSRP issue up, because I just checked with the dealer and they made a mistake, the $21,000 quote was for a standard 2017 Camry LE, NOT a hybrid. I was clear in what I had asked for, they just made a mistake. I am getting a new quote and will share the details when I receive it.

Thank you again.

While you wait - go build the exact car on Truecar and Edmunds to see the ballpark selling price. You need to ask your dealer for better price, probably by $1-1.5K at least. Also ask if they give you loyalty cash (most likely they will say it’s already included in their sale price, so keep that in mind when compare to Truecar/Edmunds).