US Bank (3rd party buy out) Now Early Termination Issue

[delta737h]

Here is your entire post…

@JTLoh

@delta737h

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.

I understand US Bank owns it and can sell it for profit, etc. And I would agree the last part of my post (what you quoted) is a stretch, in that US Bank will claim the customers didn’t give 30 days notice, therefore weren’t exercising the early termination clause in their contract. However, if you call US Bank, they are deceitful, in that they don’t tell you that’s an option. I’m guesstimating here, but I would assume over the last few years (when wholesale values were high) there have been many, MANY US Bank customers who turned in there lease a few months early and were charged those couple months, plus termination fees, who would have actually owed nothing by exercising the early termination clause. Just seems very deceitful on their part. If I called in and said “Hey, I got three months left on my lease, what are my options to exit early?” US Bank should say, Well, we (the bank) know the estimated realized value is XYZ (They know it because that’s the price they use to set what they would sell it to a 3rd party for) and since that’s greater then your liability, you can exercise the early termination clause and owe us nothing. But they don’t do that out of pure greed. (Which isn’t surprising, they are of course a bank) They say, you got to pay for the rest of the lease, only option you have. Then turn around and sell it for max profits. Double dipping if you ask me.

But really that last part is just an observation and isn’t relevant to my claims. As I 100% sent them 30 days notice and I’m not going to accept them just charging me the final payments + fees.

What I was responding to is the part in BOLD. YOU NEVER MENTIONED ANYTHING ABOUT AN APPRAISAL IN THIS POST. I have taken into context everything you said in this post BUT NOT THE ENTIRE THREAD. No rational thinking person is going to look for context within an ENTIRE THREAD.

[JTLoh]

@delta737h

No rational thinking person is going to look for context within an ENTIRE THREAD.

That’s fair, but you still have to take the original, first post in context. That’s the whole subject matter.

Section 25(E)(2) of the lease agreement states:

‘Within 10 days of early termination, you may obtain, at your own expense, from an independent third party agreeable to both you and us, a professional appraisal of the wholesale value of the Vehicle which could be realized at sale. The appraised value shall then be used as the Realized Value.’

So when I realized I owed $31000 and it has a wholesale realized value of $34000, I decided it was good for me to just do an early termination, as I just wanted out of the lease to buy a new car. The only way I could get the equity out would of course be to purchase the vehicle (pay sales tax), wait for title, then sell it. With such small amount of equity, this wasn’t worth it.

So I notified them in writing that I would be doing the early termination and if they could let me know on an agreeable 3rd party to do the appraisal. Well, they just ignore this request over and over. (Written request has gotten no response) If I call about it, they just say, I’m wrong, that’s NOT in the lease agreement (even though I’m looking right at it) and that I have to turn the car in, they will auction it off, then I’ll be responsible for the difference.

[JTLoh]

@delta737h

Well, geez, this is a new revelation. I was adhering to the US Bank contract. How would I know that’s their policy with little time remaining on the lease? I don’t have a crystal ball and can’t get inside their head. However, that’s very nice of them given that they don’t have to do that per the contract.

Hey, clearly you are a very smart guy. Lets start fresh. Clearly we are having some miscommunication issues. Perhaps some of my stuff isn’t clear.

I 100% agree with you that US Bank should just follow their contract if you turn in a lease early. However, I do believe they have a legal obligation to mitigate damages. So, they sort of have to accept the remaining balance on the lease over the early termination fees if they are less. Which is what I was expressing to you, they seem to be doing in my case. And while you think that seems nice of them and they are doing me a solid its really not. Because of COVID and used car prices skyrocketing (sort of an unprecedented event) they are now faced with a situation where the RV > liabilities under early termination clauses. Thus, if they followed through, 100% of the time, with the calculations you’ve put out there, then they in theory wouldn’t be collecting money when someone turns in a lease early. Now, I’m speculating here, but I feel they are ignoring the early termination clause on purpose, because that way they CAN actually collect (legally) the balance due. That’s all I’m saying.

[delta737h]

@JTLoh

You only include a single mention of Termination Fee and I assume you are referring to the actual Termination fee, not the Early Termination Fee (Actually called an Early Termination Administrative Charge) So there are TWO Termination Fees involved, yet you only cite it once.

AGAIN, I was speaking in generalities based on an excerpt from a US Bank Contract. (see below) How in the hell would I know anything about an early termination Admin Charge UNLESS I SAW YOUR Contract? What the heck is the difference between an early term fee and an early term admin charge? At any rate, I never make early term calculations for anyone unless I see their lease contract. So, I’m not going to make a mistake.

FYI- I’ll repost what I posted above regarding the US Bank excerpt…

C. EARLY TERMINATION LIABILITY. The Early Termination liability is calculated as follows:
1 The Termination Fee; plus
2. All unpaid amounts that are due or past due under this Lease; plus
3. Any official fees, taxes and other charges related to early termination; plus
4. 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
5. The Lease Balance; plus
6. The Residual Value of the Vehicle; minus
7. The Realized Value of the Vehicle.

No mention of an early term admin fee!

[delta737h]

@JTLoh

That’s fair, but you still have to take the original, first post in context. That’s the whole subject matter.

No, I don’t! ONLY THE POST, NOT THE ENTIRE TREAD.

@JTLoh

Section 25(E)(2) of the lease agreement states:

‘Within 10 days of early termination, you may obtain, at your own expense, from an independent third party agreeable to both you and us, a professional appraisal of the wholesale value of the Vehicle which could be realized at sale. The appraised value shall then be used as the Realized Value.’

This was NOT in your post!

[JTLoh]

@delta737h

No mention of an early term admin fee!

No biggie. It appears you just have an older contract. This should help you in the future…

Returning a leased vehicle early | U.S. Bank

[delta737h]

Thanks for posting that… it does help. I did call US Bank and spoke with a few folks in the leasing department. None of them could confirm that a lessee would owe nothing in the event that the realized value exceeds the early term charges. Logic is on your side in that you would owe nothing. It makes perfect sense. If the balance owed is 0 or less than zero, it’s pretty clear to me that you owe nothing.

GOOD LUCK!

[JTLoh]

Hey everyone, I want to say thank you to everyone who posted here. Your help was greatly appreciated.
My matter with US Bank has been resolved. I’m Happy. Couldn’t have done it without you. Thank you.

[JTLoh]

Hey everyone, I want to say thank you to everyone who posted here. Your help was greatly appreciated.
My matter with US Bank has been resolved. I’m Happy. Couldn’t have done it without you. Thank you.

[mllcb42]

@JTLoh

It does not state anywhere that I don’t have the right to sell to a 3rd party.

I would be willing to bet that youre overlooking the language that says this because it is phrased differently than explicitly saying “you do not have the right to a trade in”

[delta737h]

@JTLoh

So when I realized I owed $31000 and it has a wholesale realized value of $34000, I decided it was good for me to just do an early termination, as I just wanted out of the lease to buy a new car. The only way I could get the equity out would of course be to purchase the vehicle (pay sales tax), wait for title, then sell it. With such small amount of equity, this wasn’t worth it.

I early termed my Buick Envision in Feb 2022 with 8 months remaining on the lease. I traded it for a Chevy Equinox. The dealer paid off the lease balance (remaining depreciation payments plus the residual value- no taxes since it was a trade) and was willing to give me $3,000 more than what I owed. So, they cut me a check for the $3,000 of equity. This was a GM Financial lease. I’m sure you can do the same thing. Check your purchase option in your contract…

The US Bank contract excerpt that I have reads as follows regarding purchase option…

18. PURCHASE OPTION
    A. END OF LEASE TERM. At scheduled Lease termination, you have an option to purchase the Vehicle AS IS as set forth in Section 10 of this Lease.
    B. PRIOR TO END OF LEASE TERM. At any time prior to scheduled Lease termination, you have an option to purchase the Vehicle AS IS. The Purchase Option Price will be a sum equal to: (1) the amount set forth in Section 10: plus (2) the Early Termination Liability set forth in Section 22(C). excluding the items set forth in Sections 22(0(1). (0(4). (C)(6) and (0(7).
    C. TRUE LEASE. This is a true lease and you will not own or have any equity in the Vehicle or its replacement parts unless you exercise the option to purchase the Vehicle.

If your contract reads the same, then your payoff is just the remaining depreciation payments plus the residual. The dealer payoff may be more. If they have an agency agreement with US Bank, then it’s possible they won’t have to pay more.

So, it appears that selling your vehicle and then, selling it, isn’t the only way that you can access the equity. Trading it (3rd party) is a viable alternative. To wit…

This is from what you posted above.

Car leasing service | Managing your car lease | U.S. Bank (usbank.com)

Yes. You may purchase the leased vehicle at any time during the lease. Please call us at [800-USBANKS] (tel:8008722657) (if more than 12 months remaining on the lease) or 866-250-3147 (if less than 12 months remaining) for pricing information. The payoff amount is good for the lessee only. We cannot process third-party sales (to friends, family members, etc.). **The vehicle may be traded into a dealer as part of a purchase or lease of a new vehicle. The dealer will need to call us directly for payoff information. **

This is directly from US Bank’s website.

EDIT 1: IF you do an early term without purchasing the vehicle and if the realized value exceeds your early term liability, you are NOT entitled to receive the excess. It’s NOT your vehicle (i.e., you’re not entitled to any equity). In this instance, you will receive nothing, and you will owe nothing.

EDIT 2: There was also this from the US Bank website…

You may choose to purchase or trade your leased vehicle. If you’re interested in purchasing the vehicle, call 866-250-3147 for specific pricing information and possible financing options. If you wish to use the vehicle as part of a trade on a new vehicle, the dealer must call us at 866-250-3148 for pricing information. We accept relay calls.

[JTLoh]

Hey everyone, I want to say thank you to everyone who posted here. Your help was greatly appreciated.
My matter with US Bank has been resolved. I’m Happy. Couldn’t have done it without you. Thank you.

[JTLoh]

Hey everyone, I want to say thank you to everyone who posted here. Your help was greatly appreciated.
My matter with US Bank has been resolved. I’m Happy. Couldn’t have done it without you. Thank you.

[delta737h]

@JTLoh

Are you seeing this on the US Bank website?

Yes. Click on the link in my post and scroll down to the Q&A’s.

@JTLoh

I just want them to use this Early Termination Clause if the calculations come out that the RV > liability.

What are your intentions? Do you intend to buy it, trade it, or just turn it in? RV is NOT relevant IF you’re doing an early term trade or if you’re purchasing it for yourself.

@JTLoh

If it says anything like that EDIT 1 above on the website, I could definitely use that.

EDIT: It does not. Edit 1 are my words, not US Bank’s word.

[JTLoh]

Hey everyone, I want to say thank you to everyone who posted here. Your help was greatly appreciated.
My matter with US Bank has been resolved. I’m Happy. Couldn’t have done it without you. Thank you.

[JTLoh]

Hey everyone, I want to say thank you to everyone who posted here. Your help was greatly appreciated.
My matter with US Bank has been resolved. I’m Happy. Couldn’t have done it without you. Thank you.

[delta737h]

@JTLoh

IF you do an early term without purchasing the vehicle and if the realized value exceeds your early term liability, you are NOT entitled to receive the excess." or anything close that, where it says very similar.

It does NOT say that… those are MY WORDS.

[delta737h]

@JTLoh

@delta737h

EDIT 1: IF you do an early term without purchasing the vehicle and if the realized value exceeds your early term liability, you are NOT entitled to receive the excess. It’s NOT your vehicle (i.e., you’re not entitled to any equity). In this instance, you will receive nothing, and you will owe nothing.

Are you seeing this on the US Bank website? If so, where? Or is this just what your communicating to me?

This [is] what I’m communicating to you. Sorry, my mistake.

[JTLoh]

Hey everyone, I want to say thank you to everyone who posted here. Your help was greatly appreciated.
My matter with US Bank has been resolved. I’m Happy. Couldn’t have done it without you. Thank you.

[delta737h]

@JTLoh

Yes, I am 100% doing early termination. I made sure to follow the lease agreement and gave them written 30 day notice of my intentions to do so. I don’t expect any money back. But I could definitely use something from the US Bank web site that says my liability would be zero if RV > liabilities.

So, I assume you’re just returning the vehicle. There is nothing on their website that says your liability is zero if RV exceeds your early term liability. That’s why I called US Bank and was told that they didn’t know. Remember? However, logic says that you owe nothing. Consider what would happen if the RV = early term liability charges. YOU WOULD OWE NOTHING. So, it’s logical to conclude that if RV > early term charges, then you would owe nothing as well. Again, it makes perfect sense. I think involving an attorney will only result in disappointment and, perhaps, an expensive lesson. Hope I’m wrong.