Got a bad lease yesterday help!

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Got a 2016 Carolla LE got the price down to 16,661($18,500MSRP), put 6,000 down. Interest was quoted at 18% (wife is new to the country, no credit.) $1100 in sales tax, $299 doc fee, $299 for window tint.It should be roughly a $170 over 36 months, with $12,000 left.Signed for $257 a month for 36 month, with $12,000 left.Something doesn't add up, either he changed the price of the car in the lease, or gave a higher interest rate, or pocketed some of the down payment. I cant say for sure which yet, I dont have a copy of the lease because they needed a paystub and proof of residency before finalizing it.I am going back in today to see what went wrong, but I have already signed the initial agreements. Any advice on what I should say or do?

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This sounds very unlikely.  If you read through any of Ford's recent quarterly reports, their financing arm makes more m... (more)

Bend3r (Jul. 29, 2016 @ 8:52p) |

Thanks for clarifying.  Now it makes sense.

DTASFAB (Jul. 29, 2016 @ 9:08p) |

One page in the entire US?  Mostly over 10 years old.  The only one in Texas (where I am based) has had the Engine canni... (more)

RedWolfe01 (Jul. 30, 2016 @ 10:19a) |

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Say that you need to clarify some (incredibly) basic things. Are you buying or leasing? What are the terms of the agreement you signed?

If you are unable to get and comfortably understand these, don't sign anything else and tell them that you don't have any paystubs and are homeless.

And even if you are able to understand everything, an 18% interest rate on over $10k is ridiculous. You shouldn't be shopping for a new car, you can get many perfectly good used cars with your $6k. Revisit a new one later if you must, but only after you can pay in full or qualify for attractive loan terms.

Hold it, you signed a contract and they didn't give you a copy of what you signed?

If your out the door total is $18k, and you put down $6k cash, you still owe $12k.
If leasing, don't put $6k down. If your wife wrecks the car next week, you will have paid $6,000 a week to rent a Corolla.
If buying, 36 payments of $257 won't cover the $12k.

If you only qualify for horrible financing deals when buying or leasing a new car, don't finance a new car. Just put $6,000 down on something like this, have a mechanic inspect it before you hand over your cash:
http://detroit.craigslist.org/wyn/cto/5695374604.html 
http://detroit.craigslist.org/wyn/cto/5687497510.html 

jesta said:   Got a 2016 Carolla LE got the price down to 16,661($18,500MSRP), put 6,000 down. Interest was quoted at 18% (wife is new to the country, no credit.) $1100 in sales tax, $299 doc fee, $299 for window tint.It should be roughly a $170 over 36 months, with $12,000 left.Signed for $257 a month for 36 month, with $12,000 left.
 


16,661 + 1,100 + 299 + 299 = 18,359
Less:  6,000 downpayment
Equals:  12,359

So how the hell will you be making payments for three years and still be left with $12,000 due?  Take someone knowledgeable with you when you go back.  You clearly signed something you don't understand.

 

dcwilbur said:   
jesta said:   Got a 2016 Carolla LE got the price down to 16,661($18,500MSRP), put 6,000 down. Interest was quoted at 18% (wife is new to the country, no credit.) $1100 in sales tax, $299 doc fee, $299 for window tint.It should be roughly a $170 over 36 months, with $12,000 left.Signed for $257 a month for 36 month, with $12,000 left.

16,661 + 1,100 + 299 + 299 = 18,359
Less:  6,000 downpayment
Equals:  12,359

So how the hell will you be making payments for three years and still be left with $12,000 due?  Take someone knowledgeable with you when you go back.  You clearly signed something you don't understand.

 

  
Yeah, something was changed. That isnt what we agreed to, I'm sure they will say they made a clerical error, and try to fix it. But we all know thats bullshit, they changed it in hopes I wouldnt read the full contract. 
I agree I should have looked into it more before leaving, but I honestly thought car dealers had become more honest over the last decade with the advent of the internet and readily available information.

jesta said:   
 
Got a 2016 Carolla LE got the price down to 16,661($18,500MSRP), put 6,000 down. Interest was quoted at 18% (wife is new to the country, no credit.) $1100 in sales tax, $299 doc fee, $299 for window tint.It should be roughly a $170 over 36 months, with $12,000 left.Signed for $257 a month for 36 month, with $12,000 left.Something doesn't add up, either he changed the price of the car in the lease, or gave a higher interest rate, or pocketed some of the down payment. I cant say for sure which yet, I dont have a copy of the lease because they needed a paystub and proof of residency before finalizing it.I am going back in today to see what went wrong, but I have already signed the initial agreements. Any advice on what I should say or do?

  


 
If I try to make sense of what OP wrote then you have an
MSRP of 18500
Cap cost of 10661+1100+299+299 = 12359
Money factor of .0075 (18% interest)
Residual value of 12000 or around 65%

So your monthly depreciation is 12359-12000 = 359/36 = $10
And you monthly rent (interest) charge is (12359+12000)*.0075 = $183 (ouch!)
Your total monthly pay should be around $193
For a price of $257, it looks like the dealer added back your initial $1839 discount onto your cap cost, lol.

I would strongly recommend AGAINST a deal like that.  Use your $6000 to buy a used car instead.
 

Actually using a 65% residual the 12000 is about what the car will be worth at the end of the lease. The lease payments even under a high rate should be WAY less. Like $50/mo.

Are you certain about the $12,000 residual value?  That seems high for a 3 year old car that was under $17k new.

Even if car dealers have become more honest, it's obvious that the general public hasn't become more financially savvy.

Glitch99 said:   Are you certain about the $12,000 residual value?  That seems high for a 3 year old car that was under $17k new.
That sounds about right for a Corolla. They hold their value very well.

jayK said:   
Glitch99 said:   Are you certain about the $12,000 residual value?  That seems high for a 3 year old car that was under $17k new.
That sounds about right for a Corolla. They hold their value very well.

  Google quickly tells us Corolla residual is in the mid-50s, not 65.  We have no idea what they used, but 10 percent is a pretty significant spread.

Regardless, even if they took that 65% and applied it to the sale price rather than MSRP (giving a residual of $10.8k), that'd at least explain the discrepency in the payment.

jayK said:   
Glitch99 said:   Are you certain about the $12,000 residual value?  That seems high for a 3 year old car that was under $17k new.
That sounds about right for a Corolla. They hold their value very well.

  
Residual is based on MSRP, not cap cost.  I think 65% is pretty realistic, but it could swing a bit each way.

http://www.leaseguide.com/articles/cheapest-car-lease/  would not be a bad site for OP to read.  It does a decent job explaining.

Edit to add:  There is a current offer for the same car, obviously for good credit -- but I could not get enough to calculate exact residual based on the public list.  http://www.centralatlantic.buyatoyota.com/en/offer-detail/?offer...  

Actually it looks like $12K is the buyout. Subtract $1700 in taxes, fees, and extras and the residual would be closer to $10,300.

With bad credit should have taken that $6000 and purchased a used car cash outright.

jesta said:   I agree I should have looked into it more before leaving, but I honestly thought car dealers had become more honest over the last decade with the advent of the internet and readily available information.
  Well, no, internet hasn't changed things, because even if information is readily available and for example people in this forum will spell out for you what you should and should not do, you will just go back and get run over by the good ol' slick salesman
 

llepky said:   
For a price of $257, it looks like the dealer added back your initial $1839 discount onto your cap cost, lol.
  

That's the magic of leasing.
You can verbally negotiate an $1800 discount on a leftover 2016, and write the deal up for MSRP without the customer noticing.

RedWolfe01 said:   Actually using a 65% residual the 12000 is about what the car will be worth at the end of the lease. The lease payments even under a high rate should be WAY less. Like $50/mo.

Sometimes the official factory lenders, like Toyota Motor Credit, will offer excessively high residuals, like 65%/3 years, in order to get the monthly payment down to make the deal more attractive. But if you're planning on buying at lease end, it doesn't really help you. From shopping on Leasetrader, I found that anytime a Ford lease gave the buyout price in the listing, it was way more than I would be willing to pay for that car.

SlimTim said:   Say that you need to clarify some (incredibly) basic things. Are you buying or leasing? What are the terms of the agreement you signed?

If you are unable to get and comfortably understand these, don't sign anything else and tell them that you don't have any paystubs and are homeless.

And even if you are able to understand everything, an 18% interest rate on over $10k is ridiculous. You shouldn't be shopping for a new car, you can get many perfectly good used cars with your $6k. Revisit a new one later if you must, but only after you can pay in full or qualify for attractive loan terms.

  
But he has to keep up with the Jones! And they just got a brand new vehicle!

justignoredem said:    
But he has to keep up with the Jones!
 

And the Joneses drive a Corolla???  If I were image conscious, I think I'd aim a little higher than the Joneses then. 

Why don't the OP buy it instead of the wife with 0 credit history?

18% interest?!?!?!??!, hell might as well put it on a credit card and gotten points at that rate.  Next time go to bubble king, you could have had each got a nice roller with that dough.

Troll alert

Advent of Internet means dealers becoming more honest?  There is an old saying the country I came from:  A dogs tail will remain crooked no matter how many years it is buried in the ground. 

Let this be a lesson to everyone on FWF:  Do not sign anything until you understand what you're getting into.  Most of the times, once you sign it it's the horse out of the barn or water under the bridge or the ship has already sailed or the train has left the station or...

Me thinks at this point OP's best bet is to buy the car out from the lease and finance through a CU such as PenFed. He still got royally screwed on the price (I bought multiple Corollas for 12-14k) but at least he won't pay a usurious interest rate.

Oh, and do it sooner rather than later so you can screw the dealer out of their Toyota kickback.

Edit: Actually, DO NOT bring the documents to the dealer. Ignore them and see if they will "yo yo" the car back and cancel the deal. 

taxmantoo said:   
llepky said:   
For a price of $257, it looks like the dealer added back your initial $1839 discount onto your cap cost, lol.

 

  
That's the magic of leasing.
You can verbally negotiate an $1800 discount on a leftover 2016, and write the deal up for MSRP without the customer noticing.

 

A friend brought me to a dealer to protect her from getting screwed on a lease. We found a good price over the phone at a dealer 90 minutes away, said we'll drive up today for that price. They said you have a deal. I did the lease calculation and figured the lease payment to the penny. When we got there the dealer said, "Here ya go, the price we agreed on!" But the payment was $100/mo more than it should have been. I said I think there has been some mistake... He went in the back, came back and said there was a "computer error." The payment was still $50/mo too high. I took a calculator and said, "Look, based on the price we agreed on and the residual value and money factor..." The salesman literally ripped the calculator out of my hands (he knew as soon as I hit "enter" he would have to give us that price or be exposed as a fraud), and yelled, "You're not serious about buying a car, get out of here!"

The lesson: there are more moving parts on a lease and most people don't know if a $30,000 car should lease for $299 or $379 or $482.43. So the salesman claims he's giving you the car for $5,000 off MSRP or $10,000 off or $1,000,000 off and then just writes up the lease with whatever price he wants to plug in. (The first deal he presented to us was actually OVER MSRP.)

P.S.: Calculating a lease payment requires a calculator and some middle school-level math, you can't necessarily do it in your head but it's not rocket science either.

AlwaysWrite said:   
taxmantoo said:   
llepky said:   
For a price of $257, it looks like the dealer added back your initial $1839 discount onto your cap cost, lol.

 

  
That's the magic of leasing.
You can verbally negotiate an $1800 discount on a leftover 2016, and write the deal up for MSRP without the customer noticing.

 

A friend brought me to a dealer to protect her from getting screwed on a lease. We found a good price over the phone at a dealer 90 minutes away, said we'll drive up today for that price. They said you have a deal. I did the lease calculation and figured the lease payment to the penny. When we got there the dealer said, "Here ya go, the price we agreed on!" But the payment was $100/mo more than it should have been. I said I think there has been some mistake... He went in the back, came back and said there was a "computer error." The payment was still $50/mo too high. I took a calculator and said, "Look, based on the price we agreed on and the residual value and money factor..." The salesman literally ripped the calculator out of my hands (he knew as soon as I hit "enter" he would have to give us that price or be exposed as a fraud), and yelled, "You're not serious about buying a car, get out of here!"

The lesson: there are more moving parts on a lease and most people don't know if a $30,000 car should lease for $299 or $379 or $482.43. So the salesman claims he's giving you the car for $5,000 off MSRP or $10,000 off or $1,000,000 off and then just writes up the lease with whatever price he wants to plug in. (The first deal he presented to us was actually OVER MSRP.)

P.S.: Calculating a lease payment requires a calculator and some middle school-level math, you can't necessarily do it in your head but it's not rocket science either.

  Exactly why one must negotiate each element of a lease separately. 

If the OP isn't a troll, I question whether it's really a lease deal -- my inclination is towards a balloon payment purchase/finance. Probably didn't qualify for a lease from the captive and went with this for "the same thing" from another bank.

alamo11 said:   
AlwaysWrite said:   
taxmantoo said:   
llepky said:   
For a price of $257, it looks like the dealer added back your initial $1839 discount onto your cap cost, lol.

 

  
That's the magic of leasing.
You can verbally negotiate an $1800 discount on a leftover 2016, and write the deal up for MSRP without the customer noticing.

 

A friend brought me to a dealer to protect her from getting screwed on a lease. We found a good price over the phone at a dealer 90 minutes away, said we'll drive up today for that price. They said you have a deal. I did the lease calculation and figured the lease payment to the penny. When we got there the dealer said, "Here ya go, the price we agreed on!" But the payment was $100/mo more than it should have been. I said I think there has been some mistake... He went in the back, came back and said there was a "computer error." The payment was still $50/mo too high. I took a calculator and said, "Look, based on the price we agreed on and the residual value and money factor..." The salesman literally ripped the calculator out of my hands (he knew as soon as I hit "enter" he would have to give us that price or be exposed as a fraud), and yelled, "You're not serious about buying a car, get out of here!"

The lesson: there are more moving parts on a lease and most people don't know if a $30,000 car should lease for $299 or $379 or $482.43. So the salesman claims he's giving you the car for $5,000 off MSRP or $10,000 off or $1,000,000 off and then just writes up the lease with whatever price he wants to plug in. (The first deal he presented to us was actually OVER MSRP.)

P.S.: Calculating a lease payment requires a calculator and some middle school-level math, you can't necessarily do it in your head but it's not rocket science either.

  Exactly why one must negotiate each element of a lease separately. 

  Or just focus on the payment price.  Then the dealer really can put in whatever sale price and interest rate they want, as long as it results in the correct payment amount.  

llepky said:   
jesta said:   
 
Got a 2016 Carolla LE got the price down to 16,661($18,500MSRP), put 6,000 down. Interest was quoted at 18% (wife is new to the country, no credit.) $1100 in sales tax, $299 doc fee, $299 for window tint.It should be roughly a $170 over 36 months, with $12,000 left.Signed for $257 a month for 36 month, with $12,000 left.Something doesn't add up, either he changed the price of the car in the lease, or gave a higher interest rate, or pocketed some of the down payment. I cant say for sure which yet, I dont have a copy of the lease because they needed a paystub and proof of residency before finalizing it.I am going back in today to see what went wrong, but I have already signed the initial agreements. Any advice on what I should say or do?

  


 
If I try to make sense of what OP wrote then you have an
MSRP of 18500
Cap cost of 10661+1100+299+299 = 12359
Money factor of .0075 (18% interest)
Residual value of 12000 or around 65%

So your monthly depreciation is 12359-12000 = 359/36 = $10
And you monthly rent (interest) charge is (12359+12000)*.0075 = $183 (ouch!)
Your total monthly pay should be around $193
For a price of $257, it looks like the dealer added back your initial $1839 discount onto your cap cost, lol.

I would strongly recommend AGAINST a deal like that.  Use your $6000 to buy a used car instead.

  Where did the 10,661 figure come from?

S197 said:   
llepky said:   
jesta said:   
 
Got a 2016 Carolla LE got the price down to 16,661($18,500MSRP), put 6,000 down. Interest was quoted at 18% (wife is new to the country, no credit.) $1100 in sales tax, $299 doc fee, $299 for window tint.It should be roughly a $170 over 36 months, with $12,000 left.Signed for $257 a month for 36 month, with $12,000 left.Something doesn't add up, either he changed the price of the car in the lease, or gave a higher interest rate, or pocketed some of the down payment. I cant say for sure which yet, I dont have a copy of the lease because they needed a paystub and proof of residency before finalizing it.I am going back in today to see what went wrong, but I have already signed the initial agreements. Any advice on what I should say or do?

  


 
If I try to make sense of what OP wrote then you have an
MSRP of 18500
Cap cost of 10661+1100+299+299 = 12359
Money factor of .0075 (18% interest)
Residual value of 12000 or around 65%

So your monthly depreciation is 12359-12000 = 359/36 = $10
And you monthly rent (interest) charge is (12359+12000)*.0075 = $183 (ouch!)
Your total monthly pay should be around $193
For a price of $257, it looks like the dealer added back your initial $1839 discount onto your cap cost, lol.

I would strongly recommend AGAINST a deal like that.  Use your $6000 to buy a used car instead.

  Where did the 10,661 figure come from?

  $16,661 sale price less $6k deposit/down payment.

Holy $hit OP - Toyota is running $2500 customer cash on 2016s right now plus dealers are doing additional $1000-$2000 below invoice. You certainly got hosed!

I just picked up a 2016 Camry XLE:

MSRP: $28,200
Invoice: $25,800
I paid $23,000 OTD (inclusive of everything).
So I ended up saving over $6000 off MSRP and around $4000 off Invoice.

Also, I ended up with a premium color which normally costs $400 more.

I almost had another deal finalized 2016 Camry XLE for $22,000 OTD - but lost the car by an hour as some other dealer requested a trade and it slipped out of my hand - might have been the deal of a lifetime!

About 2 years ago someone at work - an Indian new to the country was also similarly hosed at a Toyota dealership for a Corolla also - dealer sold him a LE for $25,000 with some non-sense protection package, needless warranties, windshield protection, you name it, all kinds of stuff,for $25,000 for a Corolla!!

As someone said, go back with someone knowledgeable.

When I was finishing my purchase, another guy was driving away with his 2016 Camry LE purchase, he asked me what I was buying and when I asked him what he paid, he told me it was $25,000 OTD. He said MSRP was $23,800 and he got a good deal. I didnt have the heart to tell him, just congratulated him and let him drive on!

When you say to negotiate each element of a lease separately, there is sales price, interest rate/money factor (which was set for the month by Honda), and residual value (which is also set by Honda). There was no trade-in. So there weren't other moving parts.

So I actually disagree with focusing on the monthly price. That's exactly what dealers want you to do, because most people don't realize that a $349 payment might be over sticker, or that $25 more per month can add up to big money over the course of a 4- or 6-year payment plan.

For a lease, I would focus on negotiating the price of the car, then do the math and you will know what the payment should be. But dealers want you to focus on the (smaller) monthly price as it seems more affordable -- they love saying things like "how much can you afford per month?" ("I can afford 10x the monthly payment, but I'm still not paying over $X for the car, OK?")

You should use leasehackr.com or at least their lease calculator at:

http://leasehackr.com/blog/2016/4/17/how-to-calculate-lease-paym...

They didn't actually post any deals on a Corolla, but I disagree about the money factor, it may be higher or lower than what the manufacturer offers, that's one way that the dealer can take advantage of someone.

Glitch99 said:   
S197 said:   
llepky said:   
jesta said:   
 
Got a 2016 Carolla LE got the price down to 16,661($18,500MSRP), put 6,000 down. Interest was quoted at 18% (wife is new to the country, no credit.) $1100 in sales tax, $299 doc fee, $299 for window tint.It should be roughly a $170 over 36 months, with $12,000 left.Signed for $257 a month for 36 month, with $12,000 left.Something doesn't add up, either he changed the price of the car in the lease, or gave a higher interest rate, or pocketed some of the down payment. I cant say for sure which yet, I dont have a copy of the lease because they needed a paystub and proof of residency before finalizing it.I am going back in today to see what went wrong, but I have already signed the initial agreements. Any advice on what I should say or do?

  


 
If I try to make sense of what OP wrote then you have an
MSRP of 18500
Cap cost of 10661+1100+299+299 = 12359
Money factor of .0075 (18% interest)
Residual value of 12000 or around 65%

So your monthly depreciation is 12359-12000 = 359/36 = $10
And you monthly rent (interest) charge is (12359+12000)*.0075 = $183 (ouch!)
Your total monthly pay should be around $193
For a price of $257, it looks like the dealer added back your initial $1839 discount onto your cap cost, lol.

I would strongly recommend AGAINST a deal like that.  Use your $6000 to buy a used car instead.

  Where did the 10,661 figure come from?

  $16,661 sale price less $6k deposit/down payment.

  Totally forgot about the downpayment.  Thank you sir.

sorry for the late reply, I got out of the lease, and got my money back.

Went to another dealer, got the same care for $17837 out the door, purchased, not leased, with a 8.9% interest rate. Much happier with the deal.

AlwaysWrite said:   
So I actually disagree with focusing on the monthly price. That's exactly what dealers want you to do, because most people don't realize that a $349 payment might be over sticker, or that $25 more per month can add up to big money over the course of a 4- or 6-year payment plan.

Of course you have to know what you're willing to pay before walking in, and not blindly negotiate a monthly payment from the dealer's starting point. You're right in that the monthly payment is the most irrelevant number in terms of getting a good deal. But that's also what you are actually writing the check for, everything else is just a component of an equation. If I get my number on the check, I couldnt care less what the equation looks like.

jesta said:   sorry for the late reply, I got out of the lease, and got my money back.

Went to another dealer, got the same care for $17837 out the door, purchased, not leased, with a 8.9% interest rate. Much happier with the deal.

If you have good credit you should be able to refi into a 0.99% loan from a different bank or CU.

jesta said:   sorry for the late reply, I got out of the lease, and got my money back.

Went to another dealer, got the same care for $17837 out the door, purchased, not leased, with a 8.9% interest rate. Much happier with the deal.

  
Much better deal, could have done better by another $1000-$1500 but way better than the first losing deal they had you sign!

I am curious, how did they let you back out of the first one? 

Glitch99 said:   
AlwaysWrite said:   
So I actually disagree with focusing on the monthly price. That's exactly what dealers want you to do, because most people don't realize that a $349 payment might be over sticker, or that $25 more per month can add up to big money over the course of a 4- or 6-year payment plan.

Of course you have to know what you're willing to pay before walking in, and not blindly negotiate a monthly payment from the dealer's starting point. You're right in that the monthly payment is the most irrelevant number in terms of getting a good deal. But that's also what you are actually writing the check for, everything else is just a component of an equation. If I get my number on the check, I couldnt care less what the equation looks like.

No, you're writing X number of checks for Y amount each, where X times Y equals Z.  The only number I care about is Z.

When I signed my apartment lease, I didn't care about the application fee or the building amenities fee or the parking fee or the garbage disposal fee or the utilities cost.  All I cared about was total amount of money spent in a full year.  That number divided by 12 is the true monthly cost.

The way cell phone providers are doing leases on new phones instead of selling subsidized phones with two year agreements is like an elementary version of car leasing.  Master the art of understanding the current cell phone scams (particularly the buy-one-get-one "sort of" free on the Apple phones from Sprint and AT&T with a bunch of restrictive terms and conditions right now) and leasing a car will be a piece of cake.

You can buy several Crown Vics for $6k.

Skipping 14 Messages...
dcwilbur said:   
RedWolfe01 said:   Of course they aren't really Crown Vics anymore, which has been gone even from the "special vehicle" lines for a long time.   Mainly Dodge Chargers around here.  
Link

  
One page in the entire US?  Mostly over 10 years old.  The only one in Texas (where I am based) has had the Engine cannibalized for parts -- both heads are missing.  So I still don't feel I am wrong.  



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