Auto Lease Problem - Need serious help!!!

[mpweaver4]

I need some advice in regards to an auto lease and I will be as brief as possible. I am trying to help my brother out who is financially under water and cannot afford to pay his auto lease monthly payment. He has a significant amount of negative equity on this truck and needs to get rid of this truck and this lease somehow. Here are the grim details:

- Lease Payoff principle = $32,071
- Monthly payment = $747
- Monthly auto insurance payment = $245

There are 2 yrs left on this 3 yr lease. My mother co-signed on this lease for him and my brother DESPERATELY wants to keep her out of this if at all possible. He works close enough to work where he can get by without a vehicle for a few months if necessary. I've been researching early termination options for leases but don't know how such high negative equity affects these options (i.e. swapping the lease)

The KBB value of his truck is about $18K. Other financial details that may help any of you gracious advice givers:

-$35K annual salary
-Rent = $500 / month (includes utilities)
-CC debt = $3,500

THANKS

[ScrimpAndSave]

Sell it.

[disneysteve]

Originally Posted by mpweaver4

- Lease Payoff principle = $32,071

There are 2 yrs left on this 3 yr lease.

The KBB value of his truck is about $18K.

-$35K annual salary

Wow! I just want to make sure I understand this.

He earns $35,000.
He bought a truck for nearly that amount.
That $35,000 truck, one year old, is only worth $18,000. How is that possible?
Your mother, in a moment of temporary insanity, cosigned the lease papers.

He can check out sites like swapalease.com, leasetrader.com, takemypayments.com and see if he can find a taker for his lease.

I hope your mother gets out of this okay and has learned her lesson and will never cosign anything for anyone ever again.

[mpweaver4]

Disneysteve you are correct. The truck may be worth slightly more than that, but he had rolled a previous loan into his current one. Not a good idea obviously, but now he's trying to figure out the best way manage this situation without filing for bankruptcy.

If swapping isn't an option.....Can he trade the vehicle in, pay the early termination fees, and assume responsibility for the remainder of the loan??

[disneysteve]

This is going to be a mess no matter what, especially for your mother.

I don't know the lease terms. I think he needs to call the lease company and find out what his options are. Is it possible to pay an early termination fee? What would that cost him? How would that affect his and her credit ratings?

Personally, I think his main concern should be to get your mother out of this deal.

[mpweaver4]

I agree. I believe today he is going to write Chrysler Financial a letter explaining his situation in detail in an effort to get lowered monthly payments or early termination guidelines. To me that seems like the best place to start.

[disneysteve]

Originally Posted by mpweaver4

I agree. I believe today he is going to write Chrysler Financial a letter explaining his situation in detail in an effort to get lowered monthly payments or early termination guidelines. To me that seems like the best place to start.

If I were him, I'd be on the phone to the lease company today, or going in person if they have a local location. Why delay it by going through the mail? He needs to fix this ASAP.

[maat55]

Originally Posted by mpweaver4

I need some advice in regards to an auto lease and I will be as brief as possible. I am trying to help my brother out who is financially under water and cannot afford to pay his auto lease monthly payment. He has a significant amount of negative equity on this truck and needs to get rid of this truck and this lease somehow. Here are the grim details:

- Lease Payoff principle = $32,071
- Monthly payment = $747
- Monthly auto insurance payment = $245

There are 2 yrs left on this 3 yr lease. My mother co-signed on this lease for him and my brother DESPERATELY wants to keep her out of this if at all possible. He works close enough to work where he can get by without a vehicle for a few months if necessary. I've been researching early termination options for leases but don't know how such high negative equity affects these options (i.e. swapping the lease)

The KBB value of his truck is about $18K. Other financial details that may help any of you gracious advice givers:

-$35K annual salary
-Rent = $500 / month (includes utilities)
-CC debt = $3,500

THANKS

Is there some kind of balloon at the end. 747 times 24 equals 17,928. In any case, if he is able to borrow the difference + 2k, he can eliminate a lot of debt and buy a beater. The stupid tax is going to be heavy on this one. Also, getting out of this truck will lower his insurance costs.