ChadFeldheimer
Member
My (Illinois) lease has an early termination clause.
The gist of it is that you pay:
(1) an early termination penalty (1-2.5 months worth of lease payments, depending on how much time is left on the lease)
and
(2) the difference between the wholesale value of the car (or the insurance payout if you are terminating the lease due to a total loss) and the remaining loan capital
You might ask your salesperson for an example (California) lease agreement to examine for yourself.
I'm surprised that they are adjusting lease residuals upwards! I thought the residual on my lease was rather optimistic (even after deducting the $7500 federal tax credit). But that's great news for new leasees =)
EDIT: the lease does state that one is responsible for paying the remaining lease payments (minus unearned interest) - but it continues to add the residual to that sum and then subtract the wholesale value of the car. So if you read that one clause of the contract without reading the rest (admittedly it's not exactly exciting reading material), it's easy to interpret the contract as your salesperson did.
The gist of it is that you pay:
(1) an early termination penalty (1-2.5 months worth of lease payments, depending on how much time is left on the lease)
and
(2) the difference between the wholesale value of the car (or the insurance payout if you are terminating the lease due to a total loss) and the remaining loan capital
You might ask your salesperson for an example (California) lease agreement to examine for yourself.
I'm surprised that they are adjusting lease residuals upwards! I thought the residual on my lease was rather optimistic (even after deducting the $7500 federal tax credit). But that's great news for new leasees =)
EDIT: the lease does state that one is responsible for paying the remaining lease payments (minus unearned interest) - but it continues to add the residual to that sum and then subtract the wholesale value of the car. So if you read that one clause of the contract without reading the rest (admittedly it's not exactly exciting reading material), it's easy to interpret the contract as your salesperson did.