messy situation

[kj228]

Hello,

Been wanting to gather some opinions from more people on my current situation since I am quite lost at what to do.

I decided to enter a lease 19 months ago for a car that I thought I could afford at the time. I was expecting my work to go welll at the time and took a risk on how I setup the deal with the company. I did not qualify for a finance with any creditors since my credit history was not good enough so instead we setup a lease that is structured like a finance but still a lease. Basically I put a $50000 down payment on the car and setup monthly payments of $3500 a month over 24 months with a buyout at the end of $4000. Although it was for two years we had an agreement that I would be able to buyout of the lease within a year of payments so the interest I was paying to burrow the money was within reasonable at the time for me.

Over the past year and half my work has not gone very well and over the summer I have built some credit card debts to keep everything afloat. I have only 5 months left on my agreement before the car's title will be transferred to me. Frankly at this point I can't handle the payments for much longer and would like to sell this car in anyway possible to recoup my finances back into the green where I can get a fresh start again.

I don't have a lot of options in burrowing anymore credit to keep myself afloat and it's a sticky situation to not be able to complete my the remainder of my contract.

I would hate to lose this car with having paid 80% of it's value but I am running out of options in this very sticky situation. I'm generally not the type to ask friends/family for help with financial situations so trying to leave that as a last resort. Any advice would be appreciated thank you!

[RetireEarly]

If your numbers are accurate, why don't you sell your $130,000 car and buy something a little less expensive...

[Ima saver]

How much was the car??

[disneysteve]

I decided to enter a lease 19 months ago

we setup a lease that is structured like a finance but still a lease.

I have only 5 months left on my agreement before the car's title will be transferred to me.

This doesn't make sense. Is it a lease or a purchase? If it is a lease, at the end of 24 months, the car goes back to the seller. The title doesn't get transferred to you, unless you pay the residual value to purchase the vehicle.

Also, I'm guessing you typed your numbers wrong. Did you mean to say $5,000 downpayment and $350/month payments?

[Scanner]

DisneySteve,

You can arrange for close-ended leases where a pre-determined buy-out price is negotiated at the end.

There are companies where you can get people to assume leases for you - transfer them for a fee, as one solution to this dilemma.

[disneysteve]

DisneySteve,

You can arrange for close-ended leases where a pre-determined buy-out price is negotiated at the end.

So could OP just make the remaining 5 payments, forget the $4,000 buyout and give back the car like you would with a typical lease?

[Scanner]

DisneySteve,

That's the way I understand it.

Let's get one thing straight - you always get screwed on the lease. When you break down the interest rates, it usually comes in around 15%-18% over the life of the lease whereas a vanilla auto loan probably runs around 9-10% over the life of the loan. Owning my own business. . .I can't even justify the write-off knowing how loaded the deck is against you.

Close-ended leases (from what I understand) are where you negotiate with the dealer a monthly payment and an agreed upon buy-out. This will usually be lower monthly payments.

Open-ended leases are where there is no agreed upon "option" to exercise buying the car. So. . .usually, the monthly payments are higher because the owner of the car, the leasing co., doesn't know what they can get at the end.

You could negotiate something at the end. You could say, "I'll give you $4000 to keep the car." They may bite or they may just try their luck taking back posession and reselling the car.

I'm not sure what to suggest for the OP, if he can't get capital to buy-out the lease.

[Exile]

If this is a lease, you can't sell the car. The best you can do is try to get someone to take over the lease (perhaps via a classified ad) and the 5 remaining payments. That would be a shame having come this close to the end of the contract, but it sure beats a repo.

As an alternative, you can swallow your pride and ask family for financial help in order to keep up your remaining installments. And speaking of help, if those numbers are correct, you need to rethink your priorities and get credit counseling in the worst way. Why on earth would you spend that kind of money on a car in the first place? And using your credit cards to finance your living expenses only added fuel to the fire. Again, please get counseling.

[m3racer]

What kind of car is this?

[InDebtInDC]

Please read the lease contract carefully for the terms and conditions. Don't make assumptions based on what people tell you. Read the contract.