Early bird lease termination offers?

[brad]

Have any of you 2012/2013 owners been offered to terminate your lease early? Ford offers this to lessees, usually 3-4 months before the lease end date, in order to get them into another Ford. My lease ends in 11 months and I am hoping that they offer this to me.

 

[brogult]

I'm not a lessee, but I'm curious how people (and Ford) figure in the down payment on leases when you end them early. If, for example, you get a "good deal" on a 24 month lease for $250 + $2400 down, you really are paying $350/month. If you terminate at 20 months without any compensation, your rate just went up--to $370/month.

Sorry to hijack your thread if you aren't interested, I'm just curious about these details.

 

[michael]

That's among the several reasons why it's desirable to get a "zero driveaway" lease.

Also...suppose the car is totaled out or stolen the next day. Your down payment is generally lost...the leasing company gets paid off that that's it. Similarly, it is usually not a good idea to use a trade in as a cap reduction in a lease...if something happens to the car before the normal lease termination, some or all of your equity in the previous car is lost.

Volt leases have a little devilish twist in them, to the advantage of the bank. Ford, and most other lessors, treat the $7500 they get from the government as a cap reduction, as if you had paid 7500 down, and they set the residual at whatever they think is correct.

In Volt leases, the residual is set artificially $7500 high. If the lease runs to normal termination, it doesn't make any difference: the bank takes an estimated 7500 hit reselling the car, but the collected $7500 upfront so it balances. But if the lease terminates early, the insurance pays off the car PLUS the bank has already pocketed the 7500. That's why one never buys out a Volt lease...the residual is inflated.

 

[brogult]

That's interesting on the Volt lease. I think it saves about $700 in CA sales tax as well. One thing that makes leases complicated is that you pay sales tax on the payments AND on the cap cost reduction. By shifting the CCR to the residual, they avoid this. It almost seems fraudulent.

I assume you've leased all your cars? (except the Corvettes!) How did it compare to purchasing at the time?

 

[michael]

Yes, that was very perceptive of you on the sales tax...that's one advantage of the Volt approach, at least here in California...effectively cuts the monthly payments by around $20. Some states it doesn't help since, I am told, even on leases sales tax is on the entire amount.

Yes, all three cars leased, all on zero driveaways. I think leases are the way to go for EV's. Ford is exceptionally easy to deal with in that they offer leases up to 19,500 miles per year, and I am told they even allow you to pre-buy additional miles beyond that which are refundable if not used. Chevy was inflexible, 15,000 being the highest but plenty for me since I use the FFE for the long daily commute (80-100 miles daily). Only better deal was the one my friends got on a Rav-4 EV...unlimited miles. They've gone 15,000 miles in 7 months.

Since I didn't buy the extra miles, I know I'm done with this car at 58,500. At my present burn rate, I will hit this a few months before the lease ends. I don't know whether to shift some of the miles over to the Volts to get it to last right up to 36 months, or whether to turn it in whenever I hit the miles. I presume I will need to pay off the remaining payments, but at least I will save insurance for a few months. Still don't have this one worked out.

I like the way leases deal with the $7500 in that it's for-sure and happens right away.

I was at first suspicious of the "zero driveaway" talk at the Ford dealer, figured they were going to somehow ding me for tax, license, something.... The sales manager resolved my concern by saying, "You give me exactly zero dollars and I give you the keys. You write Ford 35 monthly payments and give me back the keys". They were equally straightforward at Chevy and Toyota.

 

[Yellowzx5]

Have any of you 2012/2013 owners been offered to terminate your lease early? Ford offers this to lessees, usually 3-4 months before the lease end date, in order to get them into another Ford. My lease ends in 11 months and I am hoping that they offer this to me.

I'm going into my 8th lease with Ford, and I have never been offered an early termination. I was hoping to have one for my C-Max Energi to get my ffe but nothing yet.

 

[brad]

I'm going into my 8th lease with Ford, and I have never been offered an early termination. I was hoping to have one for my C-Max Energi to get my ffe but nothing yet.

Thanks for your input, Yellowzx5. With that many leases, perhaps they are presuming that you're going to lease another Ford.

 

[Yellowzx5]

I'm going into my 8th lease with Ford, and I have never been offered an early termination. I was hoping to have one for my C-Max Energi to get my ffe but nothing yet.

Thanks for your input, Yellowzx5. With that many leases, perhaps they are presuming that you're going to lease another Ford.

True, but sometimes it would be nice to get out a few months early. Especially now granted I can't get my new car till it comes in.