Selling A Car With A Lease

[forever_benz]

Hi all,

I have a toyota axio 141 that I bought on a full lease in december 2010. the car also has the VAT invoice. the purpose of this purchase was to put the car for long term rent and however, i came to realize that rent a car business is a very tricky. i got to know horrifying stories of vehicles being sold with fraudulent documents, breaking down of cars to parts and whatnot. so i decided that unless i find somebody that i trust and someone i know very well, i'm not going to rent the car because i love the car as well. i have 3 diesel vehicles at home and i must say that running the axio is not the most economical. i use it only to get about city limits and it is not very pleasing to see that it only does about 8-9 km's per liter even on economical drive within colombo. so i was thinking to get rid of the car and actually advertised it. few people even came and inspected the car and were interested. but i found myself in a deadlock as the leasing is handled by commercial bank (this is going to be my last transaction with them!). they do not allow the lease to be transferred to another customers name. the only option is to pay off the total due at the end of the 5 years lease. so for a car which cost 3.75 mil will be approx 5 mil after interest. much to my unhappiness, i am compelled to keep the car with me. so i was hoping i could seek some advice from somebody knowledgeable. i spoke to the leasing officer at NTB navam mawatha and he said that their vehicle leases are full transferable between customers at no additional cost. now i feel like banging my head on the wall. appreciate anybody's input and sorry for the long story of my plight.

[MasterDon]

Damn that sucks.I'm with The Finance Co going on my fourth lease.I've heard some horror stories of them too but so far personally I've had no issues with them when transferring the lease to a new owner or ending the it pre-maturely,infact I got a pretty decent rebate when doing so last year.

[nexus]

your leasing is handled by commercial bank or commercial leasing?

did the leasing company agree to do a full settlement?

i dunno about NTB but lots of leasing company's have a additional charges for transferring vehicle leases to another customer.

the best thing to do is find some one trustworthy and come to an agreement to to pay your finance by your name with him (you usually need a lawyer for to create a vehicle agreement document) and one who perches your vehicle can pay the finance by your name this is a risky solution maybe it will work for you.

[jdnet]

the best thing to do is find some one trustworthy and come to an agreement to to pay your finance by your name with him (you usually need a lawyer for to create a vehicle agreement document) and one who perches your vehicle can pay the finance by your name this is a risky solution maybe it will work for you.

^^^^^^^

Avoid ths at all costs.

[Watchman]

^^^^^^^

Avoid ths at all costs.

I agree with you.

But on the other hand think of it. If that guy doesnt pay the lease, wont the leasing company come and seize the car (afterall owner is still the leasing company). So the new owner also has a reason not to default on payment. Only con will be that the OP's creditworthiness will go down the next time he wants to get another lease.

[jdnet]

I agree with you.

But on the other hand think of it. If that guy doesnt pay the lease, wont the leasing company come and seize the car (afterall owner is still the leasing company). So the new owner also has a reason not to default on payment. Only con will be that the OP's creditworthiness will go down the next time he wants to get another lease.

Well my father is actually still paying for a car he sold with a lease and a bus that he signed as a guarantor for, so it leaves me a little weary of the whole lease thing. One of the people was a close relative and the other a good friend so t's not like he did't know who he was dealing with either.

Just curious, what happens if someone buys the car with the lease and decides to sell it again with the same lease running? The whole lease game is actually more risky than renting.

[forever_benz]

Damn that sucks.I'm with The Finance Co going on my fourth lease.I've heard some horror stories of them too but so far personally I've had no issues with them when transferring the lease to a new owner or ending the it pre-maturely,infact I got a pretty decent rebate when doing so last year.

it truly sucks!!! next time i want to buy a car, leasing will never be an option, especially from a bank. banks are not renowned for vehicle leasing. rather, finance institutions such as LB finance, vallibel finance, ######## have more flexible terms and conditions and are easy to work with. and also note to myself, go for a loan instead of a lease as well.

[forever_benz]

your leasing is handled by commercial bank or commercial leasing?

did the leasing company agree to do a full settlement?

i dunno about NTB but lots of leasing company's have a additional charges for transferring vehicle leases to another customer.

the best thing to do is find some one trustworthy and come to an agreement to to pay your finance by your name with him (you usually need a lawyer for to create a vehicle agreement document) and one who perches your vehicle can pay the finance by your name this is a risky solution maybe it will work for you.

its handled by commercial bank. i'm absolutely disgusted with them and have no choice but to pay them their dues now. they agreed for a full settlement, which is 5 million plus some penalty i guess.

a lot of people suggested that idea of MOU between another person interested and get it certified by a lawyer. but if this person starts defaulting payments, it is us the bank will be coming after. not the person who we gave the car to, to carry on payments.

[forever_benz]

I agree with you.

But on the other hand think of it. If that guy doesnt pay the lease, wont the leasing company come and seize the car (afterall owner is still the leasing company). So the new owner also has a reason not to default on payment. Only con will be that the OP's creditworthiness will go down the next time he wants to get another lease.

i also had somebody give me this crazy suggestion. like make the car look as if it was car-jacked. thus, without a car, there is no point of carrying on payments. but i have a doubt if my name will appear on the blacklist of the CRIB. hmmm...

also, you can condemn the car and since it is on full insurance, insurer will pay the total amount to the bank. but all the payments we have made so far will be irrecoverable. thats the down side to it. i am being creative to find a loose end to get away with this burdensome lease.

[VVTi]

i also had somebody give me this crazy suggestion. like make the car look as if it was car-jacked. thus, without a car, there is no point of carrying on payments. but i have a doubt if my name will appear on the blacklist of the CRIB. hmmm...

also, you can condemn the car and since it is on full insurance, insurer will pay the total amount to the bank. but all the payments we have made so far will be irrecoverable. thats the down side to it. i am being creative to find a loose end to get away with this burdensome lease.

Great idea from a great friend. Does he have plans on moving in with your wife while you languish in prison for insurance fraud?

If ou fail to make the payments, Bank will take the car AND take you to courts and take you to the cleaners. Selling a car within the first 2 years of the lease is a bit dodgy as you tend to lose a lot of money.

Your best option is to hold on to the car, and if you want sell of the many diesels you claim you have and ease your burdens and slowly sell off the 141 or better still rent it to someone you know.

Dont listen to crazy and dumbass ideas, machang. You will end up massaging the diseased feet of some Wanathamulla chandiya in Welikda... or worse.

[Nirosha]

Don't you guys think its good to have Car Loan than a Lease or Finance. (Sorry this is not related to the post directly)

[Sifaan]

banks are not renowned for vehicle leasing. rather, finance institutions such as LB finance, vallibel finance, ######## have more flexible terms and conditions and are easy to work with.

generally speaking, finance/leasing companies play at a higher risk level (that's the consequence of being "flexible" - you are checking less things, doing things faster, requiring less guarantees, etc.) than the banks, and therefore they charge higher interest rates to cover the higher amount of non-performing loans, cost of recoveries, etc.

another thing that might be worth checking (from a legal expert) is whether the bank has a legal right to say that the lease is not transferable... if other companies are able to do it, maybe it's just a smokescreen from the bank.

just to take an analogy from a different area, a company might put in it's employment contract that an employee is not entitled to EPF/ETF until confirmation, but that violates the statutory law (Shop & Office act) - however, unless the employee challenges it, the company will enforce the terms of the contract.

(Note: there seem to be at least 2 products technically - lease and hire purchase. I don't know the difference but even people with a "hire purchase" agreement usually say they have a "lease". the rights,obligations,terms, etc may vary based on lease vs. hire purchase)

its handled by commercial bank. i'm absolutely disgusted with them and have no choice but to pay them their dues now. they agreed for a full settlement, which is 5 million plus some penalty i guess.

about 2.5 years ago, we got a 2 year personal loan from commercial (for our wedding, not for a car); about 6 months later we wanted to settle the loan, and we were able to do it by paying the outstanding principal amount without any penalty. (This was something we had clarified at the time of getting the loan)

So actually I'm a bit surprised to hear that they are so tough about the lease. OTOH their policies may have changed in the last few years.

and also note to myself, go for a loan instead of a lease as well.

Don't you guys think its good to have Car Loan than a Lease or Finance. (Sorry this is not related to the post directly)

This was discussed many times. If you are an individual, and can get a loan big enough, a loan is almost always a better choice than a lease (except e.g. if you are trying to stay off the Inland Revenue radar).

[VVTi]

I settled a lease on a car in 2005 with 2 years remaining with SFC. I sold the car and settled the balance and they gave me a rebate that blew my socks off.

[Watchman]

Great idea from a great friend. Does he have plans on moving in with your wife while you languish in prison for insurance fraud?

If ou fail to make the payments, Bank will take the car AND take you to courts and take you to the cleaners. Selling a car within the first 2 years of the lease is a bit dodgy as you tend to lose a lot of money.

Well, if the leasing company takes the car, they have their assets back right, so no need for them to goto courts. And its no longer your concern if they take the car, cos its the new owner's responsibility to be paying of the lease.

Don't you guys think its good to have Car Loan than a Lease or Finance. (Sorry this is not related to the post directly)

This was discussed before. And most said the loan gives you more freedom with the car, but I also remember some VAT refund/invoice issue which made the leasing a better option (or visa versa)... you can search that... But getting a loan is going to be harder than lease I think.

[VVTi]

Well, if the leasing company takes the car, they have their assets back right, so no need for them to goto courts. And its no longer your concern if they take the car, cos its the new owner's responsibility to be paying of the lease.

This was discussed before. And most said the loan gives you more freedom with the car, but I also remember some VAT refund/invoice issue which made the leasing a better option (or visa versa)... you can search that... But getting a loan is going to be harder than lease I think.

No machang, they still take you to courts. I signed as a guarantor to a friend who could not afford to repay the lease. He returned the car to the yard, signed off ownership, they sold it at base market value, but still took us to courts to collect their loss, which was about 700k. He managed to sort it out before the first hearing. By paying the full amount owing, including compounded interest.

If giving the car back is the way out, then everyone will do that. Its not that easy.

A bank loan is the best way to go, or better still, buy a a car within your repayment means. I have stopped taking leases out for cars that I cannot afford.

[luckey007]

You can do this way. Give your all rights and liabilities regarding the car in a "power of attorney".Then he will have all rights and liabilities of the car legally. Go to a lawyer and see the possibilities of this. I have seen this type of documents and it seems you are safe in that way. Keep your power of attorney documents safely.

[wrav001]

its handled by commercial bank. i'm absolutely disgusted with them and have no choice but to pay them their dues now. they agreed for a full settlement, which is 5 million plus some penalty i guess.

a lot of people suggested that idea of MOU between another person interested and get it certified by a lawyer. but if this person starts defaulting payments, it is us the bank will be coming after. not the person who we gave the car to, to carry on payments.

I think its pretty fair from the banks point of view. The bank also has to borrow the money from somewhere (deposiots, shareholders). The bank promisses the rates for their depositors which they lend it to others. They cannot stop pay their depositors interest.(unless u are Sakvithi)

So if you want to pull out, bank is going to loose money. You signed the contract and you must got a much better rate than a finance company.

You may be able to negotiate to pay half of the interest you have to pay. There is nothing in your favor in courts of law. sorry for being negative...

[luckey007]

You can transfer all of your rights and liabilities regarding the car by the doc called the "power of attorney" and it seems you are safe even in the courts. I have seen this type of docs. Visit a lawyer and discuss the possibilities.

[Pericles]

or better still, buy a a car within your repayment means.

+1 this part. General rule with all purchases for me. If I don't have the money in hand to cover the purchase, I don't even buy things on the credit card.

[Nirosha]

This was discussed many times. If you are an individual, and can get a loan big enough, a loan is almost always a better choice than a lease (except e.g. if you are trying to stay off the Inland Revenue radar).

This was discussed before. And most said the loan gives you more freedom with the car, but I also remember some VAT refund/invoice issue which made the leasing a better option (or visa versa)... you can search that... But getting a loan is going to be harder than lease I think.

Thanks guys. I'l take a look. I've asked NSB. Interest only 13% same as lease. (22,500/= for 10 laks for 5 years as I remember)

Edited June 10, 2011 by Nirosha

[luckey007]

Don't you guys think its good to have Car Loan than a Lease or Finance. (Sorry this is not related to the post directly)

Loans only second to the cash at hand. But for a lone eligibility is a problem for lot. Otherwise you have the full ownership,less paper work,low insurance premium- You may run even in 3rd party cover-,easy reselling and lots more.Interest is also low AFAIK.

[Tikiri]

You can also tell teh leasing company that if they do not agree to

transfer the lease (subject to credit worthiness of teh prospective buyer)

that you will take this matter up with Consumer Services Authority.

Its quiet powerful, they will call for inquiry and give 14 days to settle the matter

other wise they will black list that company with all

government bodies etc,

This at least worked for me when dealing with Car Mart as they kept teh money for ages

and didn't order the car for me, finally when I said I am going to Consumer Services Authority

they refunded within a day.

Also you can take this matte rup with Central Bank as the company is regulated by the CB,

they take these things very seriously.

Good luck

[forever_benz]

thank you much for the replies everyone. i have resorted to keeping the car than thinking of crazy ideas to get rid of the burden. i think they probably states in the terms and conditions that the car can not be sold to another party without settling off the 5 year commitment. this is the biggest problem when we dont properly read the terms and conditions. they can screw us over. sucks for me. but thanks for you time.

[AbeysinghE]

thank you much for the replies everyone. i have resorted to keeping the car than thinking of crazy ideas to get rid of the burden. i think they probably states in the terms and conditions that the car can not be sold to another party without settling off the 5 year commitment. this is the biggest problem when we dont properly read the terms and conditions. they can screw us over. sucks for me. but thanks for you time.

I think if you do a good search with reliable sources ,you will be able to find a well reputed tourism companies like Aitken Spence, Jetwing or some reputed 5* hotels who will be interested to have a good car for their use.I have seen some people has put their vehicles in reputed hotels.I think that will be safer than those culprit renting parties.

[forever_benz]

I think if you do a good search with reliable sources ,you will be able to find a well reputed tourism companies like Aitken Spence, Jetwing or some reputed 5* hotels who will be interested to have a good car for their use.I have seen some people has put their vehicles in reputed hotels.I think that will be safer than those culprit renting parties.

i actually rented the vehicle to Diethem tours [known as HEM tours] in january 2011, who are currently operation hilton hotel's transport fleet . they ripped me off. i had to pay for the driver, petrol and even service my car. paid me only 35 bucks per km. i withdrew my car. also i inquired from unilevers. they wanted axios for a 5 year long contract. unfortunately they dont rent from individuals. they said they would pay 120k per month. i then contacted ECD global who rent vehicles to unilevers. guess what they offered me? 60k per month! they get to keep 1:1 profit off my car. i am totally the risk bearer here. need to change tyres, do service and all the other routine repairs. all they do is be an intermediary. well.. it wont serve them any good for doing unfair business.

Edited June 15, 2011 by forever_benz