QuestionQUESTION: I am currently in a '06 Pathfinder lease. It ends on 6/3/09. My mileage max is 48750 and I am currently at 42.5k. My payoff is $23k so I know I can't trade it in. I called Nissan financing directly and they told me I could "walk away" and pay $4400 after the inspection and odometer statement signature. My remaining lease payments are around $5700. I am trying to figure out if I should terminate now and pay the $4400 or if i keep it I will pay the rest of the payments ($5700) plus over mileage that I figure to be 15k x .15 a mile (2.5k, plus tires $600 and maybe some wear/tear) This would be close the the $4.4k I can pay now and get out. I am thinking if I pay the $4.4k now; I can at least utilize the $5.7k i would continue paying and put it towards a loan for ownership of a new vehicle. What are your thoughts on my analysis of the financial cons to getting out early. And do you have words of wisdom on the $4.4k quote I received to get out now. There was no indication that I was obligated to pay the remaining lease payments plus the $4.4k; it was just $4.4k to get out now and walk. They explained the $4.4k as the difference b/t my remaining lease payments and the wholesale price. With $4.4k that means the wholesale price is "very" low. Does this sound right? Any input would be greatly appreciated. Also, do you know whether I get hit for miles if I'm still w/in the contracted miles of 48750, despite the fact I turn it in early (one year) w/only 5k miles remaining? Thanks.
ANSWER: Last question answered first:
Although lease terms can vary from one company to the next, I'm pretty confident that if you read all the fine print you'll find that you're allowed so many miles per month if you terminate early. For example, if your lease is for 39 months, 48750 divided by 39 = 1250 miles/ month. If you're 28 months into the lease and you turn in the vehicle now, you're allowed 35,000 miles at this point, so you'd be responsible for paying for the additional 7,500 miles.
As for terminating now, it's something I always try to avoid because paying off the lease early means the finance company earns a whole lot of extra interest upfront. First of all, does the $4,400 include excess mileage charges, or will they tack that on when you go to turn in the vehicle? If the person on the other end of the phone never asked how many miles were currently on the Pathfinder, then I can guarantee that you'll have to come up with some extra cash. If they took pains to find out just how many miles you have now, then they probably factored that into the payoff. Regardless, this is something you need to question again and make sure where you stand.
How about an alternative: park the Pathfinder for awhile, and buy an inexpensive used car to drive until the lease ends? I do this every winter to keep my Lincoln from being exposed to rust-causing road salt, and I usually drive the "winter beater" for free or close to it. You see, if you can find a decent-running car in the $1500-$2500 price range, it's a car who's depreciation is all gone. If it's a reliable vehicle (nearly any small Japanese car, Saturn or Escort), repairs will be minimal for the next year, and you can probably sell it then for pretty close to what you paid for it. I bought a Saturn in the fall of 2004 for $1200, spent $40 on a minor brake repair, then sold it the next spring- for $1300! You wouldn't have to shell out all of the $4400 now, you'd get most of your investment back when you sell the cheap car, and you'd avoid paying the over-mileage fees at the end of the lease. Yes, you'd have to continue making payments on the Nissan (which you would get to drive occasionally, but within the total miles allowed), but it might just mean the least amount of money spent in the long run.
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QUESTION: thanks for your input. what is your knowledge about a "push forward" dealing with leases. i've been told by nissan dealer that nissan does this, but only 6 months out from lease expiration and they waive the balance of lease payments if you get into another lease. do dealers, other than the lease dealer ever do this? and if so, how would one go about inquiring about it? thx. wendy
AnswerSeveral companies offer this, but at the very least they'll require you to get another vehicle from them (Nissan to Nissan, never Nissan to Chevy or Nissan to Toyota). From there, the offer may be limited to certain vehicles (from the one you're coming out of to the new one you're leasing), and they often require you to go through the dealer from which you leased the current vehicle (unless you've moved a certain distance). If you can't find info on the Nissan website, ask the dealer for written info they have on the program from Nissan.
