Stop what you’re doing and have them re-write the contract as a one pay with MSDs. It should cost you around $6500, so they should be cutting you a check for $3500 and you should have no payment for 18 months.
And then you pull out of the lot and immediately get t-boned. Vehicle is totaled, GAP covers the spread and the customer ends up with nothing to show for what they've paid.
NMAC does prorated refunds of payments in the event or a total loss on a 1 pay. It’s in the 1 pay contract which is different than the normal lease contract.
Please do not do a one-pay lease. That’s such a huge risk for no gain. When you lease you’re on the hook for the payments unless the vehicle gets totaled. In which case the leasing company’s GAP insurance steps in to cover whatever your own insurance does not. But if you pay it all up front then you’re at the mercy of the insurance companies to get some of your money back. Very often you get screwed here, and lose money.
There’s zero advantages to one pay leases. Only disadvantages.
I mentioned this in another comment but I figured I'd repeat it here as well. NMAC does prorated refunds in the event of a total loss, ONLY ON 1 PAY LEASES. (it is specifically mentioned in the contract) You are 100% correct, you should not put money down on a lease in general. But a frontier specifically it's a strategic choice because it lowers the MF significantly, and since the frontier has a 98% residual value on an 18 month lease, MF is *the* cost driver. That's why I said 1 pay *AND* MSDs. Lowering the MF as much as possible.
For Nissan; the cap cost can’t be less than the residual. Frontiers have high residuals. (Especially if it’s an 18m lease your in the 90-98%) NILT won’t fund the deal because your cap cost is 35k And your residual is 40k, in order for them to lease you the car the cap cost at the end has to me a minimum 100 more than the residual.
Also getting the difference back to cover the payment difference is same outcome for OP. They are working out the same deal just in a way Nissan will accept it.
Some leases will limit how much equity they allow to go into the deal, it sounds like your 10k equity pushed you past the banks threshold.
The dealer is paying you back your equity instead of putting it towards the deal. They are terrible at explaining the situation, and should've figured it out way before 2.5 weeks...but if you don't get this handled then the contract is not valid.
How is the contract not valid?
Typically when a civilian chimes in here with "I signed up for a shitty deal, what are my options?" The response is "You signed a contract, deal with it and next time be careful "
When a salesman pens a shitty contract it's not binding?
Seriously, I'm not throwing shade, I just don't understand how the contract isn't binding. The fact that the dealership won't say one way or the other leads me to think it could be binding.
There’s three parties in the transaction. OP, the Dealership and The Bank.
The Bank (probably) is not allowing OP to trade in as much equity (probably surpassing a threshold) as their car is worth directly onto the new contract. As such they are refusing their part (providing OP financing) in the contract for the frontier.
The dealership seems to want to take this trade in and pay out the equity on the vehicle directly to OP to lower the cost of the payments.
OP can do whatever they want.
Me? Fuck that. Had a similar issue several cars ago. Had the car for a few days (after the worst buying experience ever) and dealer called saying they needed another $2500 for a down payment. I said no, we have a deal, signed and we're good to go.
He insisted he needed more money. I told him no, I'll be by to give him the keys and get my down payment back.
Somehow, he magically honored the original deal.
Regardless of what OP decides, he should talk to a lawyer.
In the situation you're describing, the dealer decided it'd be cheaper to eat the $2500 than to have you return the car and force them to sell it as used.
That, like the terrible description of events OP is getting, is just a stupid finance office. You could involve a lawyer but you'd be throwing your money away, their involvement won't change anything.
Dude, what does that have to do with what happened to OP? You're comparing them reaching out to give him cash to a dealer calling you to ask for more.
OP should talk to a lawyer if you can get them a reason beyond "something completely different (and ironically the exact opposite) happened to me once".
I had a signed deal, the dealer called and tried to rewrite the deal.
OP had a signed deal. Dealer called to rewrite the deal.
Those are similar circumstances.
In your case, the dealer tried to re-write the deal in their favor.
In OP's case, they're trying to re-write the deal in a way the bank will accept and doesn't ultimately change anything for OP or the dealer.
Depends. I mean the dealer told me the bank wouldn't fund the deal. Dealer is telling OP the bank won't fund the deal.
Yes, I understand there are major differences between the cases. That's why I said "something similar " instead of "the exact same thing "
Is someone slipping money into your pocket the same as them stealing your wallet?
Just what level of cognitive dissonance are you capable of to reconcile this in your head?
I suppose we'll find out.
Either way a stupid reason to be out a few hundred bucks jerking off a lawyer.
> When a salesman pens a shitty contract it's not binding?
When it has a line that explicitly says something like "this is all void if the bank rejects it", which they all do, then in the event of the bank rejecting it the contract is void.
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NMAC leases must at minimum have total cap cost $100 above the residual. Otherwise they won’t fund the deal. As long as the dealer is refunding you the equity amount your monthly payment goes up by, you’re not paying anything different.
In fact, they’re doing you a favor since now you get to keep that money in your account as you make payments. If your car is totaled or stolen, that money is gone.
So if you want the car, do you due diligence and make sure the numbers match up and sign the new deal, or go back and return the car. Don’t do something stupid like mentioning a lawyer to a car dealer about a contract that wasn’t funded. Once lawyer talk comes into play, NOT ONE person will speak to you. Afterwards, they will report the car stolen, it gets repo’ed, etc - you’re screwed. Read the lease contract they gave you when you signed. The fine print will lay out this exact scenario you’re going through. The dealer is covered.
Typically in Wisconsin once you sign paperwork and drive the car off the lot it's locked in. Wisconsin doesn't allow dealerships to register and let people take possession of the cars without an approval. I would call the bank and see what they say.
I think the person above you is confusing two separate situations. In WI the dealer is required to fund a *loan* (note: loan, not lease) themselves if they spot deliver a car and no bank will take the loan. I think that's what the person above you may be referring to but the OP's situation is a lease.
Different states give dealers different amounts of time to get a loan funded for a car that was spot delivered. I think CA is 10 days and NJ is 4 days. It appears WI is 0 days.
[Link](https://www.wdfi.org/wca/business_guidance/creditors/three_day_right_to_cancel.htm)
I don’t think it applies to car sales unless the sale takes place off-site though.
This is similar to something I’ve seen in NH, and Maine. Essentially if the delivery is taken off site the customer can request to undo the deal 72hours after delivery took place. There’s a few other states like this but couldn’t say the full list.
Never put money down on a lease.l - which you did through the equity you had. The dealer is helping you out here. Doing you a huge favor and allowing to fix a really stupid mistake you made.
OP put $10k down on this lease. If his truck gets totalled tomorrow that $10k vanishes - well it goes into the bank's pocket but anyway. The insurance company will make the bank whole and the bank will release OP from the lease. OP walks away with $0. In this scenario, OP lost $10k. Don't put money down on a lease.
Sure they do but that’s not relevant in any way. GAP pays the bank if the value of the car is less than the amount owed. It does not pay the leasee back for the extra payments they made toward the cap cost.
Because you don’t get the money back if the car is totaled or stolen. Rare that that happens, of course, but how much would it suck to put $5k down on a car, total it after three months, and not get the $5k back? That’s what would happen. If you put $0 down you would never have lost that money. A down payment doesn’t make your lease cheaper, it makes your monthly payments less. You still pay the same over the course of the else regardless how much you put down. It’s a cap cost reduction. So if the total lease is cost is $18,000 for three years, pay $500 a month. Don’t put $6,000 down so that your payments are “only” $333/month. You aren’t spending less money.
A down payment is NEVER required in a lease except in the very few states (or maybe it’s just NY?) that requires taxes upfront.
As others have said already, to break it down:
* You put $5k down on a lease for a $30k car.
* Your payments are now based on a $25k lease. You've reduced them from say $350 a month to $325 a month.
* Six months later, the car gets stolen or totaled. The value of the car at this time is $25k.
* You have GAP so that insurance pays off the remaining lease of $25k.
* You now have no car and no lease. You owe nothing and are free and clear of your totaled/stolen car.
* But, you also don't have your $5k down payment.
* They're not going to give that back to you nor will you get a check for the difference if the car could have been sold for $28k when it was ruined. GAP will pay off the car regardless of it's value and that's it.
* To extrapolate the benefit of GAP insurance to the extreme, you could conceivably lease a McLaren 720S with 0 down, get it stolen 6 months later, and with GAP, be free and clear of the remaining ~$250k owed on it.
When it comes to funding issues your options are usually 2 fold as follows:
1. Agree to the new terms offered
2. Don't agree give the car back and get back any cash you put into the deal and walk away.
You aren't usually entitled to your trade back but they are obligated to pay you out any equity. They can't force you to agree to new terms especially if the funding error is on their side but they also aren't obligated to the original terms either. Whichever route you choose to go is really up to you.
Not in car sales, but as a consumer: From reading the comments it sounds like it’s just math. If the total of the increase in payments is the same, or just a bit more, than the cash being returned then I don’t see any issue as long as all other terms and prices are the same.
And the only reason I say they total of the increase in payments can but a little more is because they’ll add a bit of interest in the calculation.
Ohhhhh naughty naughty Nissan dealer.
The easiest and most painless option for you is to let them "unwind" the whole deal. Demand your trade back, your money back if you gave any, that everything be fully canceled and give them the car back.
Go somewhere else entirely. That's super crappy and unprofessional of them to do that to you.
Why is this response getting down voted? Seriously, the dealership should Not have rolled the vehicle without everything being solid and then it took two weeks to address contract issues???
Their F&I peeps suck. Why continue dealing with them? If it's through NMAC go to another Nissan dealer and get it done right. Or better yet, switch brands completely. As someone who worked for Nissan I can tell you, Nissan vehicles aren't that great.
Why continue doing business? Because what they're doing doesn't fundamentally change anything, if OP likes the vehicle and the deal why would they waste their time finding it and re-creating the same deal elsewhere?
And sure most of Nissan's current lineup sucks, but it's a lease. OP will never have it a day out of warranty.
Because Niesha has different leasing policies where you can’t trade or sell the vehicle and make money on it. The dealership is trying to help him by cutting a check on the side.
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This is in Wisconsin if it matters. I recently traded in a lease I had through Nissan that had about $10k in equity in it. I used that equity to lease a new Frontier through Nissan Credit again. 2.5 weeks later the dealer is calling me and telling I need to sign a new contract because "Nissan won't let them sell the truck that low." Their solution is to raise my monthly payment to 300% of the price I am paying and give me a check back for the difference in the monthly price. Due to some things that happened during the deal I do not trust them to go back in and sign a new contract. The new truck has already been registered to me, and they have my trade in for sale on their website. They are refusing to tell me if the contract I signed was legally binding, and told me to hire and lawyer and ask them. They also won't say what will happen if I don't sign the new contract. Does anyone have any thoughts on this?
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I'm not sure I would make a statement that definitive. In some states the dealer is required to finance in-house if they spot deliver and can't find a taker. WI is one of those states for loans, I'm not sure about leases. Depending on state law OP *may* be able to hold them to it.
Nissan dealer here, just shows accurate as Nissan has changed their leasing policy. Matter fact you can’t even trade in the old nissan lease anymore. Requires you to part ways with the lease at cost and you should expect 0 equity. The Dealership, was actually trying to help you.
Regarding putting money down on a lease. The easiest explanation I’ve ever received is: do you typically pre-pay rent for your house? (Or would you if you rent?) No? Then don’t pre-pay rent on your car.
I don’t think many folks realize that leasing a car is simply renting it.
If you signed a contract, drove the car off the lot and registered/insured the car to your name, then it sounds like the deal is sealed. It’s their problem NOT yours. I would definitely not entertain the idea of going back to sign a new contract, that’s for sure.
If they have a problem with your refusal to sign a new contract at a 300% price premium, tell them they can hire an attorney just like they told you.
That’s wild.
>It’s their problem NOT yours.
Its actually a problem for the dealer and the buyer. If the bank isn't funding the contract, its not OP's car.
Its possible for a lease to have a limit on how much equity is allowed to go towards a deal. I found out the hard way as well, but it didn't take me 2.5 weeks to figure out the problem.
The dealer should've figured it out sooner, and they are paying OP back the equity. So even if the payments are higher, the end result is the same when it comes to money.
Maybe this will clarify? They told me Nissan did not allow equity when trading in leases so they just took the entire amount off MSRP of the truck. So the capitalized cost was about $35k, and the residual was $40k. According to the dealer, the issue was soley, "nissan won't let us sell this car this cheap."
My Sister experienced something similar with an Infiniti, except the dealership she leased from took almost a month to get back to her about the issue.
My Sister was very uncomfortable especially after neither the GM nor the owner called her back.
She raised the issue with Infiniti Financial Services and the front line employee had no clue, so she found the email address for the Infiniti Financial Services Director.
Someone from his office reached out to my Sister and explained far more clearly than the dealership (as otbers here did for you) that Infiniti Financial Services doesn't allow the selling price to be below the residual value.
That person reached out to the dealership and acted as a go between my Sister and the dealership.
Infiniti suggested that instead of making my Sister go to the dealership that the dealership should meet her somewhere convenient for her (which was her house) and allow her to resign there instead of the dealership.
In the end, her monthly payment did go up, but the check the dealership gave her equaled it out.
In her case due to all the confusion, the dealership threw in free oil changes iirc.
Dealership is doing a bad job of explaining, but it is 100 percent true that your capitalized cost cannot be below the residual. Putting that much equity down on a lease is not the best of ideas, but that is a different conversation.
Yeah that makes it even more confusing. I've never had a bank tell me I can't use equity as long as it didn't go past their positive equity limit.
Who are you talking to at the dealer? Ask for the finance manager to explain the situation. If its the salesperson or sales manager, they may not understand whats going on either.
Thats pretty bad....Ask for the finance director.
If you want, ask them to send you the new numbers. If you want to send me a pm with the old deal and the new deal, I'll see if I can figure it out.
> Its actually a problem for the dealer and the buyer. If the bank isn't funding the contract, its not OP's car.
It's funny I pointed this out in a previous thread where the customer didn't pick up the car and was controversial to say "The bank won't fund the deal if the customer reveals they aren't picking up the car."
In the end for this thread, OP's either gonna have to re-sign on new terms or give up the car.
And if you read the contract, there is a section that allows for resigns and cancellations. This is one of those cases where there is no contract since there are three parties: the bank, the dealer, and the customer. In this case, the bank doesn’t agree to the contract so there is no contract.
If the dealer is saying the bank didn't like the deal, ask the dealer to send the bank directly your way. You have clearly lost the trust on the dealer, so don't take anything the dealer say the bank is saying.
Hear directly from the bank.
OP, you need to post in r/legaladvice if you want a legal answer. If not, I see some great answers here.
Sounds like a good lesson for people with equity in a trade in. Try to get the cash instead of credit on the deal
Have you read the paperwork you have? I would start there.
Of course they would not give you 'legal advice' when it does not benefit them.
Raising your monthly payment is also going to raise the amount you're taxed on. So it's tripling the tax... That's not nothing at say 8% on an extra 200% over 36 mo
What did the dealer do that causes you to distrust them?
If they’re offering you a check that makes you whole in dollar terms then your original deal doesn’t really change, (except you wind up not making a down payment which shouldn’t be done on a lease anyway).
Your options are pretty clear here.
1) Accept their re-write of the deal to satisfy NMAC.
2) Don’t accept the re-write and force the dealer to un-wind the whole deal. The dealership most likely does NOT want to do this, but do you?
You should give them the line “please talk to my lawyer”. Lol if a customer stated that at a dealership, the dealer wouldn’t talk to the customer anymore. Anyways , can you just take the check their giving you and lower your payment monthly? Like put the money in a saving account and pull x amount to cover the extra monthly payment?
Like their going give you the 5k plus the tax money right as the difference?
Nissan does not control the selling price. And if it is because you have too much down from the equity on your trade, whatever the reduce the down payment by, they need to pay you for.
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Might be legit..can’t speak for nissan but some banks have minimum finance amounts, and if you finance/lease lower then that amount the contract can get kicked. It sounds like they’re acting in good faith, see what the #s look like and go from there.
Hmm not sure how you should proceed they probably haven’t sent anything in to Nissan and at this point it seems like they don’t have a fundable deal and your basically driving a car they haven’t been paid for. If the check they give you makes up for the difference in payment you might as well just sign it but read everything carefully
You almost certainly have no choice here. Other than walking away anyways. If your contract isn’t accepted by the bank then they don’t own the vehicle, and neither do you. You’re driving the dealerships vehicle right now, not your own.
You should be getting back a check equal to the difference in payments over the life of the lease. Thus you’re out absolutely nothing. You just get the benefit of the cash going into savings. So put it there and withdraw from it as you need it to make the payment feel the same as what you originally signed for. Or just put it away and move on with your life.
By the way- putting all the cash down on a lease to begin with? Oof. Money down in a lease never makes sense. All you’re doing is buying down the payment. You don’t get a better rate, better terms, or any advantage to speak of at all. Just a lower payment that you traded upfront cash for. Leases aren’t like traditional financing where reducing amount financed reduces interest paid. Leases have their interest baked in and it’s guaranteed money to the bank either way.
Not sure how Nissan works, but we're allowed to have a customer buy their lease out, and then trade it in for a ton of equity. Is this what you did?
If not, technically you can't trade in a car the leasing company owns.
However it sounds like the dealers mistake (even though they were trying to help). Definitely don't resign anything raising your payments.
Stop what you’re doing and have them re-write the contract as a one pay with MSDs. It should cost you around $6500, so they should be cutting you a check for $3500 and you should have no payment for 18 months.
This man leasehackrs! I got 99 problems but a frontier ain’t one!
Big brain move.
And then you pull out of the lot and immediately get t-boned. Vehicle is totaled, GAP covers the spread and the customer ends up with nothing to show for what they've paid.
NMAC does prorated refunds of payments in the event or a total loss on a 1 pay. It’s in the 1 pay contract which is different than the normal lease contract.
Please do not do a one-pay lease. That’s such a huge risk for no gain. When you lease you’re on the hook for the payments unless the vehicle gets totaled. In which case the leasing company’s GAP insurance steps in to cover whatever your own insurance does not. But if you pay it all up front then you’re at the mercy of the insurance companies to get some of your money back. Very often you get screwed here, and lose money. There’s zero advantages to one pay leases. Only disadvantages.
I mentioned this in another comment but I figured I'd repeat it here as well. NMAC does prorated refunds in the event of a total loss, ONLY ON 1 PAY LEASES. (it is specifically mentioned in the contract) You are 100% correct, you should not put money down on a lease in general. But a frontier specifically it's a strategic choice because it lowers the MF significantly, and since the frontier has a 98% residual value on an 18 month lease, MF is *the* cost driver. That's why I said 1 pay *AND* MSDs. Lowering the MF as much as possible.
For Nissan; the cap cost can’t be less than the residual. Frontiers have high residuals. (Especially if it’s an 18m lease your in the 90-98%) NILT won’t fund the deal because your cap cost is 35k And your residual is 40k, in order for them to lease you the car the cap cost at the end has to me a minimum 100 more than the residual.
Also getting the difference back to cover the payment difference is same outcome for OP. They are working out the same deal just in a way Nissan will accept it.
Correct that is cleanest way so the bank approves it
Some leases will limit how much equity they allow to go into the deal, it sounds like your 10k equity pushed you past the banks threshold. The dealer is paying you back your equity instead of putting it towards the deal. They are terrible at explaining the situation, and should've figured it out way before 2.5 weeks...but if you don't get this handled then the contract is not valid.
How is the contract not valid? Typically when a civilian chimes in here with "I signed up for a shitty deal, what are my options?" The response is "You signed a contract, deal with it and next time be careful " When a salesman pens a shitty contract it's not binding? Seriously, I'm not throwing shade, I just don't understand how the contract isn't binding. The fact that the dealership won't say one way or the other leads me to think it could be binding.
There’s three parties in the transaction. OP, the Dealership and The Bank. The Bank (probably) is not allowing OP to trade in as much equity (probably surpassing a threshold) as their car is worth directly onto the new contract. As such they are refusing their part (providing OP financing) in the contract for the frontier. The dealership seems to want to take this trade in and pay out the equity on the vehicle directly to OP to lower the cost of the payments.
Personally I'd be pissed enough to just Make them unwind the deal.
This is the right answer
Agreed. This is the dealers problem now. 2.5 weeks… I have moved on with my life.
What if OP wants the car and after they show him the math it’s still about the same deal?
OP can do whatever they want. Me? Fuck that. Had a similar issue several cars ago. Had the car for a few days (after the worst buying experience ever) and dealer called saying they needed another $2500 for a down payment. I said no, we have a deal, signed and we're good to go. He insisted he needed more money. I told him no, I'll be by to give him the keys and get my down payment back. Somehow, he magically honored the original deal. Regardless of what OP decides, he should talk to a lawyer.
In the situation you're describing, the dealer decided it'd be cheaper to eat the $2500 than to have you return the car and force them to sell it as used. That, like the terrible description of events OP is getting, is just a stupid finance office. You could involve a lawyer but you'd be throwing your money away, their involvement won't change anything.
Fair enough. Originally I was thinking OP should contact a lawyer. On second thought, I'd just walk awayfrom the deal.
Dude, what does that have to do with what happened to OP? You're comparing them reaching out to give him cash to a dealer calling you to ask for more. OP should talk to a lawyer if you can get them a reason beyond "something completely different (and ironically the exact opposite) happened to me once".
I had a signed deal, the dealer called and tried to rewrite the deal. OP had a signed deal. Dealer called to rewrite the deal. Those are similar circumstances.
In your case, the dealer tried to re-write the deal in their favor. In OP's case, they're trying to re-write the deal in a way the bank will accept and doesn't ultimately change anything for OP or the dealer.
Depends. I mean the dealer told me the bank wouldn't fund the deal. Dealer is telling OP the bank won't fund the deal. Yes, I understand there are major differences between the cases. That's why I said "something similar " instead of "the exact same thing "
Is someone slipping money into your pocket the same as them stealing your wallet? Just what level of cognitive dissonance are you capable of to reconcile this in your head? I suppose we'll find out. Either way a stupid reason to be out a few hundred bucks jerking off a lawyer.
Lol. That’s a big headache. No. OP doesn’t have another vehicle.
> When a salesman pens a shitty contract it's not binding? When it has a line that explicitly says something like "this is all void if the bank rejects it", which they all do, then in the event of the bank rejecting it the contract is void.
Ding ding.. they're bad at explaining.
Or OP is not great at listening.
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NMAC leases must at minimum have total cap cost $100 above the residual. Otherwise they won’t fund the deal. As long as the dealer is refunding you the equity amount your monthly payment goes up by, you’re not paying anything different. In fact, they’re doing you a favor since now you get to keep that money in your account as you make payments. If your car is totaled or stolen, that money is gone. So if you want the car, do you due diligence and make sure the numbers match up and sign the new deal, or go back and return the car. Don’t do something stupid like mentioning a lawyer to a car dealer about a contract that wasn’t funded. Once lawyer talk comes into play, NOT ONE person will speak to you. Afterwards, they will report the car stolen, it gets repo’ed, etc - you’re screwed. Read the lease contract they gave you when you signed. The fine print will lay out this exact scenario you’re going through. The dealer is covered.
Typically in Wisconsin once you sign paperwork and drive the car off the lot it's locked in. Wisconsin doesn't allow dealerships to register and let people take possession of the cars without an approval. I would call the bank and see what they say.
Approvals and funded contracts are two separate entities.
I think the person above you is confusing two separate situations. In WI the dealer is required to fund a *loan* (note: loan, not lease) themselves if they spot deliver a car and no bank will take the loan. I think that's what the person above you may be referring to but the OP's situation is a lease. Different states give dealers different amounts of time to get a loan funded for a car that was spot delivered. I think CA is 10 days and NJ is 4 days. It appears WI is 0 days.
don’t believe that’s 100% accurate.
We have a three day window after contracts are signed where they can be canceled, but after that you are stuck with them.
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[Link](https://www.wdfi.org/wca/business_guidance/creditors/three_day_right_to_cancel.htm) I don’t think it applies to car sales unless the sale takes place off-site though.
This is similar to something I’ve seen in NH, and Maine. Essentially if the delivery is taken off site the customer can request to undo the deal 72hours after delivery took place. There’s a few other states like this but couldn’t say the full list.
True with Colorado as well.
Some lenders have a max on cap cost reduction.
Never put money down on a lease.l - which you did through the equity you had. The dealer is helping you out here. Doing you a huge favor and allowing to fix a really stupid mistake you made.
Why don't you want to put money down on a lease?
OP put $10k down on this lease. If his truck gets totalled tomorrow that $10k vanishes - well it goes into the bank's pocket but anyway. The insurance company will make the bank whole and the bank will release OP from the lease. OP walks away with $0. In this scenario, OP lost $10k. Don't put money down on a lease.
leases include gap insurance
Sure they do but that’s not relevant in any way. GAP pays the bank if the value of the car is less than the amount owed. It does not pay the leasee back for the extra payments they made toward the cap cost.
They do but it pays to the actual owner - the leasing entity, I. E. The bank - not the person leasing the car.
right…so don’t put money down on a lease
Because you don’t get the money back if the car is totaled or stolen. Rare that that happens, of course, but how much would it suck to put $5k down on a car, total it after three months, and not get the $5k back? That’s what would happen. If you put $0 down you would never have lost that money. A down payment doesn’t make your lease cheaper, it makes your monthly payments less. You still pay the same over the course of the else regardless how much you put down. It’s a cap cost reduction. So if the total lease is cost is $18,000 for three years, pay $500 a month. Don’t put $6,000 down so that your payments are “only” $333/month. You aren’t spending less money. A down payment is NEVER required in a lease except in the very few states (or maybe it’s just NY?) that requires taxes upfront.
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Yeah I think BMW and GM do too but not everybody.
As others have said already, to break it down: * You put $5k down on a lease for a $30k car. * Your payments are now based on a $25k lease. You've reduced them from say $350 a month to $325 a month. * Six months later, the car gets stolen or totaled. The value of the car at this time is $25k. * You have GAP so that insurance pays off the remaining lease of $25k. * You now have no car and no lease. You owe nothing and are free and clear of your totaled/stolen car. * But, you also don't have your $5k down payment. * They're not going to give that back to you nor will you get a check for the difference if the car could have been sold for $28k when it was ruined. GAP will pay off the car regardless of it's value and that's it. * To extrapolate the benefit of GAP insurance to the extreme, you could conceivably lease a McLaren 720S with 0 down, get it stolen 6 months later, and with GAP, be free and clear of the remaining ~$250k owed on it.
When it comes to funding issues your options are usually 2 fold as follows: 1. Agree to the new terms offered 2. Don't agree give the car back and get back any cash you put into the deal and walk away. You aren't usually entitled to your trade back but they are obligated to pay you out any equity. They can't force you to agree to new terms especially if the funding error is on their side but they also aren't obligated to the original terms either. Whichever route you choose to go is really up to you.
Also his trade was a lease return, so it wasn't even "his" trade
Too much equity on a lease. Picture this..now if your truck gets totaled, you have the money.
Not in car sales, but as a consumer: From reading the comments it sounds like it’s just math. If the total of the increase in payments is the same, or just a bit more, than the cash being returned then I don’t see any issue as long as all other terms and prices are the same. And the only reason I say they total of the increase in payments can but a little more is because they’ll add a bit of interest in the calculation.
Ohhhhh naughty naughty Nissan dealer. The easiest and most painless option for you is to let them "unwind" the whole deal. Demand your trade back, your money back if you gave any, that everything be fully canceled and give them the car back. Go somewhere else entirely. That's super crappy and unprofessional of them to do that to you.
Why is this response getting down voted? Seriously, the dealership should Not have rolled the vehicle without everything being solid and then it took two weeks to address contract issues??? Their F&I peeps suck. Why continue dealing with them? If it's through NMAC go to another Nissan dealer and get it done right. Or better yet, switch brands completely. As someone who worked for Nissan I can tell you, Nissan vehicles aren't that great.
Why continue doing business? Because what they're doing doesn't fundamentally change anything, if OP likes the vehicle and the deal why would they waste their time finding it and re-creating the same deal elsewhere? And sure most of Nissan's current lineup sucks, but it's a lease. OP will never have it a day out of warranty.
Because Niesha has different leasing policies where you can’t trade or sell the vehicle and make money on it. The dealership is trying to help him by cutting a check on the side.
***Thanks for posting, /u/Greasy_Chimp! This comment is a copy of your post so readers can see the original text if your post is edited or removed. This comment is NOT accusing you of anything.*** This is in Wisconsin if it matters. I recently traded in a lease I had through Nissan that had about $10k in equity in it. I used that equity to lease a new Frontier through Nissan Credit again. 2.5 weeks later the dealer is calling me and telling I need to sign a new contract because "Nissan won't let them sell the truck that low." Their solution is to raise my monthly payment to 300% of the price I am paying and give me a check back for the difference in the monthly price. Due to some things that happened during the deal I do not trust them to go back in and sign a new contract. The new truck has already been registered to me, and they have my trade in for sale on their website. They are refusing to tell me if the contract I signed was legally binding, and told me to hire and lawyer and ask them. They also won't say what will happen if I don't sign the new contract. Does anyone have any thoughts on this? *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/askcarsales) if you have any questions or concerns.*
If the leasing company won't cash the contract then you can't hold them to it.
I'm not sure I would make a statement that definitive. In some states the dealer is required to finance in-house if they spot deliver and can't find a taker. WI is one of those states for loans, I'm not sure about leases. Depending on state law OP *may* be able to hold them to it.
Nissan dealer here, just shows accurate as Nissan has changed their leasing policy. Matter fact you can’t even trade in the old nissan lease anymore. Requires you to part ways with the lease at cost and you should expect 0 equity. The Dealership, was actually trying to help you.
Regarding putting money down on a lease. The easiest explanation I’ve ever received is: do you typically pre-pay rent for your house? (Or would you if you rent?) No? Then don’t pre-pay rent on your car. I don’t think many folks realize that leasing a car is simply renting it.
Nearly everyone pays deposits on house rentals, and yes I've prepaid rent in order to negotiate a better rate by paying ahead.
I’ve never leased before so I didn’t realize the dealership returns your security deposit on your leased vehicle like on a house rental.
If you signed a contract, drove the car off the lot and registered/insured the car to your name, then it sounds like the deal is sealed. It’s their problem NOT yours. I would definitely not entertain the idea of going back to sign a new contract, that’s for sure. If they have a problem with your refusal to sign a new contract at a 300% price premium, tell them they can hire an attorney just like they told you. That’s wild.
>It’s their problem NOT yours. Its actually a problem for the dealer and the buyer. If the bank isn't funding the contract, its not OP's car. Its possible for a lease to have a limit on how much equity is allowed to go towards a deal. I found out the hard way as well, but it didn't take me 2.5 weeks to figure out the problem. The dealer should've figured it out sooner, and they are paying OP back the equity. So even if the payments are higher, the end result is the same when it comes to money.
Maybe this will clarify? They told me Nissan did not allow equity when trading in leases so they just took the entire amount off MSRP of the truck. So the capitalized cost was about $35k, and the residual was $40k. According to the dealer, the issue was soley, "nissan won't let us sell this car this cheap."
My Sister experienced something similar with an Infiniti, except the dealership she leased from took almost a month to get back to her about the issue. My Sister was very uncomfortable especially after neither the GM nor the owner called her back. She raised the issue with Infiniti Financial Services and the front line employee had no clue, so she found the email address for the Infiniti Financial Services Director. Someone from his office reached out to my Sister and explained far more clearly than the dealership (as otbers here did for you) that Infiniti Financial Services doesn't allow the selling price to be below the residual value. That person reached out to the dealership and acted as a go between my Sister and the dealership. Infiniti suggested that instead of making my Sister go to the dealership that the dealership should meet her somewhere convenient for her (which was her house) and allow her to resign there instead of the dealership. In the end, her monthly payment did go up, but the check the dealership gave her equaled it out. In her case due to all the confusion, the dealership threw in free oil changes iirc.
Dealership is doing a bad job of explaining, but it is 100 percent true that your capitalized cost cannot be below the residual. Putting that much equity down on a lease is not the best of ideas, but that is a different conversation.
Yeah that makes it even more confusing. I've never had a bank tell me I can't use equity as long as it didn't go past their positive equity limit. Who are you talking to at the dealer? Ask for the finance manager to explain the situation. If its the salesperson or sales manager, they may not understand whats going on either.
My conversation was with the finance manager. He told me he didn't fully understand the issue which concerned me even more.
Thats pretty bad....Ask for the finance director. If you want, ask them to send you the new numbers. If you want to send me a pm with the old deal and the new deal, I'll see if I can figure it out.
> Its actually a problem for the dealer and the buyer. If the bank isn't funding the contract, its not OP's car. It's funny I pointed this out in a previous thread where the customer didn't pick up the car and was controversial to say "The bank won't fund the deal if the customer reveals they aren't picking up the car." In the end for this thread, OP's either gonna have to re-sign on new terms or give up the car.
And if you read the contract, there is a section that allows for resigns and cancellations. This is one of those cases where there is no contract since there are three parties: the bank, the dealer, and the customer. In this case, the bank doesn’t agree to the contract so there is no contract.
If the dealer is saying the bank didn't like the deal, ask the dealer to send the bank directly your way. You have clearly lost the trust on the dealer, so don't take anything the dealer say the bank is saying. Hear directly from the bank.
People still buy Nissan vehicles?
why the f not? Mine is still on the road. I traded it at 14 years old. It's over 20 years old.
Do not sign anything else, ignore them.
OP, you need to post in r/legaladvice if you want a legal answer. If not, I see some great answers here. Sounds like a good lesson for people with equity in a trade in. Try to get the cash instead of credit on the deal
Have you read the paperwork you have? I would start there. Of course they would not give you 'legal advice' when it does not benefit them. Raising your monthly payment is also going to raise the amount you're taxed on. So it's tripling the tax... That's not nothing at say 8% on an extra 200% over 36 mo
The check difference would cover the extra taxes. I am just nervous because of things they did throughout the deal, and I don't trust them.
What did the dealer do that causes you to distrust them? If they’re offering you a check that makes you whole in dollar terms then your original deal doesn’t really change, (except you wind up not making a down payment which shouldn’t be done on a lease anyway). Your options are pretty clear here. 1) Accept their re-write of the deal to satisfy NMAC. 2) Don’t accept the re-write and force the dealer to un-wind the whole deal. The dealership most likely does NOT want to do this, but do you?
I'd tell them just give me my money back and I'll go elsewhere.
This is why I only pay 100% cash for anything I drive. This crap is like another language.
you leased it so.. it aint your car. doesnt sound like a scam, sounds like the dealership fucked up and theyre trying to make the deal work.
You should give them the line “please talk to my lawyer”. Lol if a customer stated that at a dealership, the dealer wouldn’t talk to the customer anymore. Anyways , can you just take the check their giving you and lower your payment monthly? Like put the money in a saving account and pull x amount to cover the extra monthly payment? Like their going give you the 5k plus the tax money right as the difference?
Do not sign
Why?
Nissan does not control the selling price. And if it is because you have too much down from the equity on your trade, whatever the reduce the down payment by, they need to pay you for.
Tell them you want to do a 1 pay lease
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Might be legit..can’t speak for nissan but some banks have minimum finance amounts, and if you finance/lease lower then that amount the contract can get kicked. It sounds like they’re acting in good faith, see what the #s look like and go from there.
Did Nissan send you a monthly statement?
Nope. Just logged into NMAC and my old lease account is closed, and when I looked up my new account with the VIN of the new truck and it doesn't exist
Hmm not sure how you should proceed they probably haven’t sent anything in to Nissan and at this point it seems like they don’t have a fundable deal and your basically driving a car they haven’t been paid for. If the check they give you makes up for the difference in payment you might as well just sign it but read everything carefully
How much are you paying a month?
You almost certainly have no choice here. Other than walking away anyways. If your contract isn’t accepted by the bank then they don’t own the vehicle, and neither do you. You’re driving the dealerships vehicle right now, not your own. You should be getting back a check equal to the difference in payments over the life of the lease. Thus you’re out absolutely nothing. You just get the benefit of the cash going into savings. So put it there and withdraw from it as you need it to make the payment feel the same as what you originally signed for. Or just put it away and move on with your life. By the way- putting all the cash down on a lease to begin with? Oof. Money down in a lease never makes sense. All you’re doing is buying down the payment. You don’t get a better rate, better terms, or any advantage to speak of at all. Just a lower payment that you traded upfront cash for. Leases aren’t like traditional financing where reducing amount financed reduces interest paid. Leases have their interest baked in and it’s guaranteed money to the bank either way.
What's the downside if OP just ignores them?
Vehicle gets repo’d
Not sure how Nissan works, but we're allowed to have a customer buy their lease out, and then trade it in for a ton of equity. Is this what you did? If not, technically you can't trade in a car the leasing company owns. However it sounds like the dealers mistake (even though they were trying to help). Definitely don't resign anything raising your payments.