Auto Lease Termination

An Auto Lease Can Be Tough to Get Out Of, Especially after a Default

Here is my small story,

I have a 2004 Rav-4 Toyota leased through Wells Fargo Auto Leasing Co, in the state of NJ.

I signed a 60 month lease at $369 per month.

I owe at least another 2.5 yrs on the lease. I went through some personal financial issues i.e.: divorce and with that legal fees and more legal fees.

So as you can tell I fell behind on my payments.

The vehicle is still in my possession but is in a charge off state and they won't work with me.

This is not in with a collection agency its still with Wells Fargo's people. They offered the vehicle to me for $18,000. With the buy out and what is left on the lease it's at $21,0000.

They said I could give them $4,300 down and $720 a month for 24 months. Yeah right. Makes no sense to me if I had problems with half that amount.

They dont care though. I could turn it in and they auction it off and they said I am responsible for the difference. Book value is $15,000 @ 38,000 miles and excellent condition.

I was then told the difference plus another $10,000 dollars residual value I am responsible for. That was never told to me.

I would be in debt forever with these numbers. The lease was signed in the mid $20 thousand mark. The sticker price when I leased it was $22,000 dollars.

They are saying with all these numbers that they are throwing at me the vehicle is worth like $30-$40 thousand dollars. I should be driving a Hummer.

Please help me if you can.

Regards,

Ross

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I can't really help you, but maybe you can help yourself.

Get out your auto lease papers and read them. They should have a section describing what you owe if you terminate the lease early. Read it and do the math to see what you really owe.

When you terminate a lease it seems that the leasing company will generate a form letter with numbers more or less picked out of thin air, with no real basis in fact.

I know from personal experience in terminating an auto lease that most of the leasing company representatives have never read the language of the contract and don't know what the auto lease really says.

I had to interpret the lease for the leasing company's lawyer in its home office to get them to agree that I owed a fraction of what they claimed.

If you don't understand what your auto lease contract says as far as early termination goes, hire a lawyer or go to Legal Aid and have them translate it for you.

New Jersey does allow deficiency judgments, so you would still be in debt if the car was sold at auction for less than what you owe, but the deficiency is based on the fair market value of the vehicle.

However, the way I read the law (and I can no longer practice law) Wells Fargo has to file two suits, one for repossession of the vehicle and a second for the deficiency.

You say the car is worth $15,000 and at one point Wells Fargo would take $18,000. If you can get that offer back on the table, maybe you can sell the vehicle yourself and pay the $3000 out of pocket, this is about what a normal auto lease early termination fee would be.

A lawyer might make Wells Fargo more accomodating and work out a better deal for you than you can do for yourself, thereby paying for himself.

Good luck.

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