What should I do?
12-03-2004, 10:40 AM
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What should I do?
My brother's getting married, and he's the one that primarily drives the FX35 that we have. The car is under both his and my name. His Fiance has a BMW that they own free and clear, so he doesn't want to keep the FX because it's an added expense. I'd love to take the car but I don't need 2 cars to pay for, not to mention my wife doesn't like it.
So I put the car on Leasetrader with a nice incentive. Based on all the FX's on the site, mine is the cheapest of all, expecially offering the most incentive and it's a loaded car with every option. So I posted the car up on Monday, I got a response on Wednesday. The guy's from Mass, he's relatively new to the country, only here for a year and a half or so, his company is a worldwide company that opened up a branch here, so he's pretty much here to stay for now. He's got a mortgage as well for like $4,000 a month, so it seemed like he should be in good financial standing and stability.
He knew what kind of business I'm in, I gave him added assurance for peace of mind. He trusted me and everything that I advised him to do. His main concern was if he would be able to get approved, considering he's relatively new in the country, he might not have strong enough credit to get the car. He gave me his personal info, I submitted it in to Infiniti Financial for a new car to see if he would get approved for it. Doing so would save me 2 weeks worth of waiting time if I started processing the lease assumption only to find out his credit might not be good enough. Fortunately his credit went through, and he got approved for a new car. That tells me that I shouldn't have a problem with doing the lease assumption, and we'd be able to get this done.
I called Infiniti Financial to ask a couple of questions, one of the most important one being if my name is still tied to the lease if he takes it over. Some banks would remove the original lessee when doing a lease assumption, so it would only be on the obligation of the new owner/lessee. Unfortunately they said my name is still tied to it, so if he were to screw up, it's on my ass to cover him, even 18 months down the line. The only way to cover my ass is if he prepays the lease, this way I know for sure that the payments are covered and I wouldn't have to worry about getting screwed, or my credit going to shit because of him. I'm already paying him an incentive of $1,300 to take the car, which drops the payments from $585 to $535 per month. He said he's willing to prepay the lease, but he wants an incentive to do it. Normally when you get a new car, there would be certain instances where if you pre-paid the lease, the money factor/interest rate would be lower, which is the incentive to do a pre-paid lease. In this case I don't think it's possible to have it done being 13 months into the lease. What would you do if you were in my shoes? give him a little more money as an incentive and let him prepay it and call it a day?
Ed
So I put the car on Leasetrader with a nice incentive. Based on all the FX's on the site, mine is the cheapest of all, expecially offering the most incentive and it's a loaded car with every option. So I posted the car up on Monday, I got a response on Wednesday. The guy's from Mass, he's relatively new to the country, only here for a year and a half or so, his company is a worldwide company that opened up a branch here, so he's pretty much here to stay for now. He's got a mortgage as well for like $4,000 a month, so it seemed like he should be in good financial standing and stability.
He knew what kind of business I'm in, I gave him added assurance for peace of mind. He trusted me and everything that I advised him to do. His main concern was if he would be able to get approved, considering he's relatively new in the country, he might not have strong enough credit to get the car. He gave me his personal info, I submitted it in to Infiniti Financial for a new car to see if he would get approved for it. Doing so would save me 2 weeks worth of waiting time if I started processing the lease assumption only to find out his credit might not be good enough. Fortunately his credit went through, and he got approved for a new car. That tells me that I shouldn't have a problem with doing the lease assumption, and we'd be able to get this done.
I called Infiniti Financial to ask a couple of questions, one of the most important one being if my name is still tied to the lease if he takes it over. Some banks would remove the original lessee when doing a lease assumption, so it would only be on the obligation of the new owner/lessee. Unfortunately they said my name is still tied to it, so if he were to screw up, it's on my ass to cover him, even 18 months down the line. The only way to cover my ass is if he prepays the lease, this way I know for sure that the payments are covered and I wouldn't have to worry about getting screwed, or my credit going to shit because of him. I'm already paying him an incentive of $1,300 to take the car, which drops the payments from $585 to $535 per month. He said he's willing to prepay the lease, but he wants an incentive to do it. Normally when you get a new car, there would be certain instances where if you pre-paid the lease, the money factor/interest rate would be lower, which is the incentive to do a pre-paid lease. In this case I don't think it's possible to have it done being 13 months into the lease. What would you do if you were in my shoes? give him a little more money as an incentive and let him prepay it and call it a day?
Ed
12-03-2004, 11:39 AM
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Tough decision considering that your name is still in the lease contract.
It is very hard to trust someone you just know for days and unfortunately I will go with the prepay option. I know you will get hammered with the incentives but think about it as an early termination fee.
It will be wise to have an additional clause notarized were you specify that the additional wear and tear of the car is his responsibillity (like excessive dings, wore down tires, etc).
The lesson with lease assumptions, those are good deals for buyers; not that great for sellers.
It is very hard to trust someone you just know for days and unfortunately I will go with the prepay option. I know you will get hammered with the incentives but think about it as an early termination fee.
It will be wise to have an additional clause notarized were you specify that the additional wear and tear of the car is his responsibillity (like excessive dings, wore down tires, etc).
The lesson with lease assumptions, those are good deals for buyers; not that great for sellers.
12-03-2004, 12:54 PM
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Originally Posted by Shoofin'TL
What would you do if you were in my shoes? give him a little more money as an incentive and let him prepay it and call it a day?
Ed
Ed
Just my
Hope it works out for the best,
Troy
12-04-2004, 07:18 PM
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Well, I increased my incentive to $2,000, he agreed to prepay the lease. IFS said the transaction should take 6-8 weeks to finalize. I called up leasetrader to ask them a bunch of questions, one of them being if there's a way to not tie me down to the lease. I wouldn't have expected them to tell me what they did, which was for them to pay off the lease and re-lease it for a shorter term to the guy. The person I spoke to said he was going to check if my car qualifies for that and call me back, which he didn't. I doubt it would qualify, the spread between the payoff and the wholesale value of the car is about $6,000. I'm probably going to go ahead with the process with the guy, but I'm going to try and see if I can have the process expedited sooner than the timing that IFS indicates it to take. My only other concern is if I'd be responsible for the excess mileage and/or excess damages that might be on the car...As for the insurance, that's all stuff that has to do with his insurance, not mine, so I'm not responsible for the insurance coverage..I'm going to work on it some more over the weekend. I already told IFS to send me the transfer paperwork...and that's where I left off..
Ed
Ed
12-06-2004, 09:59 AM
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Very cool...glad it is all working out for you....about the insurance.....i just meant if he let it lapse and got in wreck or something like that and totaled the car without coverage.....definately wouldn't want to be responsible in that case.
12-06-2004, 10:08 AM
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Originally Posted by Shoofin'TL
... I wouldn't have expected them to tell me what they did, which was for them to pay off the lease and re-lease it for a shorter term to the guy. The person I spoke to said he was going to check if my car qualifies for that and call me back, which he didn't. I doubt it would qualify, the spread between the payoff and the wholesale value of the car is about $6,000...
Ed
Ed
I will consider seeking additional info regarding your responsibilities at lease end. It seems that prepaying the lease will still have you tied with the contract.
Also, you might just wanna know, I believe that if the car is totalled, the difference of the prepayment is not reimbursed. Maybe I am wrong, but I heard if from a finance guy.
