Remember, US Bank owns the vehicle. You don’t. You have to comply with the lease agreement and pay what is owed under the lease whether you terminate early and return the vehicle or terminate early and purchase it. If US Bank can sell the vehicle for more than you owe, you’re not entitled to receive the difference. However, in this instance, you should owe nothing. On the other hand, if you owe more than the realized value, then you’re only liable for the difference. Once you turn it in, US Bank is entitled to do whatever they want… it’s their vehicle.
Below is an excerpt from a US Bank Lease Agreement referenced in the following post…
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What you see below is US Bank’s Early Termination language or the equivalent thereof, found in every lease agreement that I’ve seen, captive or otherwise. Mathematically, your ETL amounts to:
Early Term Fee + Unpaid amounts due/past due + Official&Taxes + Prep fees + Lease Bal. - RV
Makes perfect sense to me. You may want to re-read the early termination criteria very carefully because, IMO, you don’t have a leg to stand on. Questions? Let me know. If you like, I can calculate your most of your early term charges, including lease balance, so you can compare them with those of US Bank. Just PM me. Hope this helps.
- EARLY TERMINATION
LESSEE’S RIGHT TO TERMINATE EARLY. You may terminate to« Lease before the end of the Lease Term. If you do not exercise your purchase option, the charge for such Early Termination Is the Early Termination Liability defined below. You must send us written notice of your early termination by registered mail 30 days before the date of termination.
LESSOR S RIGHT TO TERMINATE EARLY. We may terminate this Lease before the end of the Lease Term if you are in Default. If you do not exercise your purchase option, upon such termination we shall be entitled to the Early Termination Liability defined below.
EARLY TERMINATION LIABILITY . The Early Termination Uablity is calculated as foflows:
1 The Termination Fee; plus
All unpaid amounts that are due or past due under this Lease; plus
Any official fees, taxes and other charges related to early termination; plus
All expenses related to recovering, obtaining, storing, preparing for sale and selling the Vehicle, including reasonable attorneys’ fees to the extent not prohibited by law, plus
The Lease Balance; plus
The Residual Value of the Vehicle; minus
The Realized Value of the Vehicle.
D LEASE BALANCE. The Lease Balance is equal to:
(1 ) The Base Monthly Payment times the number of Monthly Payments not yet due; minus
(2) Unearned Rent Charges included In the Base Monthly Payments not yet due calculated according to the Actuarial Method.
The term "Actuarial Method’ means the method of allocating Base Monthly Payments between, (i) the reduction of the Adjusted Capitalized Cost to the Residual Value over the Lease Term; and (*) Rent Charges. Under this method, a Base Monthly Payment Is applied first to the accumulated Rent Charges and any remainder is subtracted from, or any deficiency is added to the balance of the Adjusted Capitalized Cost.
NOTE: The early term fee is generally the same as the disposal fee. The lease balance is just the sum of the remaining depreciation payments (sum of the unpaid principal). Adding this sum to the residual value (RV) gives the adjusted lease balance.