Has anyone in CA terminated their lease early ?

[madbrain]

I have a 2012 Leaf SL due for return in Jan 2016, with an NMAC lease. I want to return it early, as I have another car now (a Volt).
If I keep it, I will have to continue to insure it, which will cost about $500, as well as renew the DMV stickers in October for about $300, since it's a 39 months lease. I would like to avoid those costs, since I do not plan to continue to drive the Leaf .

My inspection is scheduled for tomorrow.

I have called NMAC to get a quote for the cost to terminate the lease. They tell me they can't provide it because the car will have to go to auction first and be sold before the quote can be provided. He said that is the law in California.

I'm very concerned because of the legalese in the lease contract and early termination fees, specifically about what it says section 14 "early termination". First, it says I need to give 30 days written notice.

Then, 14 c) lists the items I will owe if the lease is terminated before the end of the lease term, which are .
I) the amounts disclosed in section 13 other than excessive wear and mileage charge; plus
II) an early termination charge equal to the difference, if any, between the Adjusted lease balance and this vehicle's realized value.

Adjusted lease balance is a charge in today's dollars ("today being the date the Lease is terminated) for Base monthly payments not yet due and the Residual Value of the vehicle.
"Realized value" is the wholesale value assigned by us in a commercially reasonable manner in accordance with accepted practices in the automobile industry for valuation of used vehicles as allowed by applicable state law, or by a written agreement as to the Vehicle's value signed by you and us.If you disagree with the value we assign to the Vehicle, you may obtain, at your own expense, a professional appraisal of this Vehicle's wholesale value or comparable value made by an independent third party agreeable to both you and us .

I don't know if I really understand this fully, but I think it means NMAC will sell the car wholesale, and if it sells for less than the very optimistic $18,160 residual value in my contract, I will be responsible for the difference, and not just for the remaining 5 monthly payments and the $395 lease return fee.

As I understand, the Leaf would probably only fetch around $8,000 at auction. So is NMAC really going to ask me to pony up an extra $10,160 to return the car 5 months early, on top of the 5 remaining monthly payments of $249 and $395 lease return fee ?

Has anyone gone through the process of returning their Leaf early to NMAC in California, and can they please report on what they were actually charged ?

 

[RonDawg]

I am in the exact same situation as you, with my Leaf also due back in January (the 11th specifically) and having gotten its replacement early (in my case, an eGolf).

I was told by NMAC as of last week that all I had to pay were the remainder of my lease payments, the disposition fee, and any excess mileage/excess wear charges. My out of pocket cost is the same whether I do it today, or I do it on January 11, 2016 (any additional wear/tear in the meantime notwithstanding).

I don't have my contract handy, but I recall that for early termination, it's the lesser of either the remainder of your payments, or the difference between auction value and adjusted lease value.

FWIW adding the eGolf as a third car, and dividing the mileage between that and the Leaf, only added $100 every 6 months to my insurance cost, so for the time being I'm using the Leaf as the daily driver and preserving my mileage allotment on the eGolf. The only part that is a PITA is having to swap out cars in the garage whenever the Leaf needs to be charged up. Fortunately my commute is short enough that I don't have to do that more than once a week, twice at the most.

 

[madbrain]

I was told by NMAC as of last week that all I had to pay were the remainder of my lease payments, the disposition fee, and any excess mileage/excess wear charges. My out of pocket cost is the same whether I do it today, or I do it on January 11, 2016 (any additional wear/tear in the meantime notwithstanding).

I wish they told me this, but that's not what they said. When did you sign your contract ?

I don't have my contract handy, but I recall that for early termination, it's the lesser of either the remainder of your payments, or the difference between auction value and adjusted lease value.

I quoted part of the verbiage from my contract earlier - I certainly can't make out that that's what it means. Would be great, though.

FWIW adding the eGolf as a third car, and dividing the mileage between that and the Leaf, only added $100 every 6 months to my insurance cost, so for the time being I'm using the Leaf as the daily driver and preserving my mileage allotment on the eGolf. The only part that is a PITA is having to swap out cars in the garage whenever the Leaf needs to be charged up. Fortunately my commute is short enough that I don't have to do that more than once a week, twice at the most.

Our 1-year insurance premium went up from $1828 with a 2011 Prius IV + 2012 Leaf SL, to $2430 when we added the 2015 Volt. Our umbrella liability policy also went up from $347 to $448, again for 1 year.
So, altogether about $350 of extra insurance on the Leaf for the ~6 months period left between now and January 20 .
Plus $254 for the registration if I am keeping the car past October 20.

Ie. about $604 more to keep the Leaf until january, and the car would have to sleep outside with potential extra damage to it/theft (my premiums are expensive because of the zip code, sigh). Or some problem could develop with it after the end of the 36 months warranty, also, between October and January.

 

[RonDawg]

I was told by NMAC as of last week that all I had to pay were the remainder of my lease payments, the disposition fee, and any excess mileage/excess wear charges. My out of pocket cost is the same whether I do it today, or I do it on January 11, 2016 (any additional wear/tear in the meantime notwithstanding).

I wish they told me this, but that's not what they said. When did you sign your contract ?

January 11, 2013 for 36 months.

I don't have my contract handy, but I recall that for early termination, it's the lesser of either the remainder of your payments, or the difference between auction value and adjusted lease value.

I quoted part of the verbiage from my contract earlier - I certainly can't make out that that's what it means. Would be great, though.

There's a possibility that the fine print on the contracts could have changed between the time you got your car and I got mine.

FWIW adding the eGolf as a third car, and dividing the mileage between that and the Leaf, only added $100 every 6 months to my insurance cost, so for the time being I'm using the Leaf as the daily driver and preserving my mileage allotment on the eGolf. The only part that is a PITA is having to swap out cars in the garage whenever the Leaf needs to be charged up. Fortunately my commute is short enough that I don't have to do that more than once a week, twice at the most.

Our 1-year insurance premium went up from $1828 with a 2011 Prius IV + 2012 Leaf SL, to $2430 when we added the 2015 Volt. Our umbrella liability policy also went up from $347 to $448, again for 1 year.
So, altogether about $350 of extra insurance on the Leaf for the ~6 months period left between now and January 20 .
Plus $254 for the registration if I am keeping the car past October 20.

Ie. about $604 more to keep the Leaf until january, and the car would have to sleep outside with potential extra damage to it/theft (my premiums are expensive because of the zip code, sigh). Or some problem could develop with it after the end of the 36 months warranty, also, between October and January.

[/quote]

Wow that is a lot. I also don't have to pay for reg renewal, but I did have to buy new tires for it at $500 for a set of 4. I do park my Leaf outside now.

 

[davewill]

I turned mine in 3 months early. I got the scary sounding letter, called NMAC and they assured me that the auction process can only affect the payoff in my favor. I could find nothing in the verbiage that said that, but it did turn out that way.

 

[RonDawg]

OK this is the early termination verbage as pre-printed on my contract, revision NILT/N 3001-CA 7/12:

14(c) Amounts you will owe at Early Termination.

If this Lease is terminated before the end of the lease term, under section 14(a) or section (b), then you will pay us:
I) the amounts disclosed in section 13 other than excessive wear and mileage charges; plus
II) an Early Termination Charge equal to the difference, if any, between the Adjusted Lease Balance and this Vehicle's Realized value,

or (bolding theirs)

if we do not terminate this Lease under section 14(b), and if it is less (bolding mine), an Early Termination Charge equal to the sum of the Base Monthly Payments not yet due and excessive wear and mileage, plus
III) if you are default, the amounts disclosed in Section 25.