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Discussion Starter #1 (Edited)
So I went to my local Dodge dealer (I know the sales manager) to look at a '15 R/T. My issue is that I have a '14 Cadillac CTS that I am leasing. I am only into the lease 14 months and 22 months left. Obviously, I knew I was going to have to put money into the deal in order to get an R/T--I just didn't know how much. The sales manager comes back and says that I am basically $14K upside down. He was trying to tell me to put down $5K on a 72-month loan. But it wasn't just any loan, he called it a deferral loan. He said that there was a balloon payment at the end of the 72 months or I hand the vehicle back to the bank. I asked him what happened to the $13,500 and he said that if I wanted to keep the vehicle, I would have to pay that off at the end--but if I didn't want the vehicle, I just hand it back in. He said that since I never keep cars longer than 3 years, he said that it wouldn't be an issue.

Has anyone ever heard of this? Something definitely doesn't sound right about this type of loan. I tried googling it, but all I came up with were links about people with bad credit. My credit is top tier, so I am confused. I know I'm buried in the CTS because it's a lease, so if I have to ride it out another year, I ride it out another year--I'm not going to get raped to get out of it.

I appreciate any info--thanks!
 

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Try and get out of the lease through lease trader or swap a lease sites. That's your best bet but I wouldn't roll a lease into a purchase. Crazy decision. Ask me how I know...I'm in a lease now but it's up in March. I bought my R/T in Sep and no payments til Nov so I'll eat 3-4 mos of two payments but I wasn't about to roll 8k+ into a purchase I could walk away from in several months...
 

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Discussion Starter #5
Let me answer your guys questions:

1. The balloon payment was $13,500 at the end.
2. I lease through GM Financial--they don't allow someone to take over the lease (like Ally did).
3. I have leased cars the last 20 years (all GM). I would normally get letters at 2.5 years (I actually got a few at 2 years) into the lease saying that if I leased another GM vehicle, there were no penalties to turn in the current vehicle--it's called a lease pull ahead.

This is the 1st time that I am actually considering a brand outside of GM and I really like the Durango. It just boils down to that age old question--how much do I really want to spend? It's more of a want then a need--but I like cars and guns, so the majority of those decisions aren't exactly the smartest, lol.
 

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Let me answer your guys questions:

1. The balloon payment was $13,500 at the end.
2. I lease through GM Financial--they don't allow someone to take over the lease (like Ally did).
3. I have leased cars the last 20 years (all GM). I would normally get letters at 2.5 years (I actually got a few at 2 years) into the lease saying that if I leased another GM vehicle, there were no penalties to turn in the current vehicle--it's called a lease pull ahead.

This is the 1st time that I am actually considering a brand outside of GM and I really like the Durango. It just boils down to that age old question--how much do I really want to spend? It's more of a want then a need--but I like cars and guns, so the majority of those decisions aren't exactly the smartest, lol.

Wow..I couldn't even get Ford to give me a 6 month pull ahead on my lease or I'd probably be driving another Ford now than my Durango!
 

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There is a buyout on the lease. Which means a dollar amount you would pay if you wanted to buy it out right. That amount lowers to a predetermined amount over the life of the lease. Find the current buyout and hopefully the dealer will be willing to pay close to that for the car. I did this last year when we bought my wife's Charger. With incentives I think we rolled about $1500 into the loan for the charger. This didn't bother me as the interest rate is low and we got a great deal on the Charger. I've never heard of the type of loan the dealer is trying to get you to take. I've done a lease trade in 2 times in the past and never had a problem.
 

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Discussion Starter #10 (Edited)
After some more research, it's called a balloon loan. Gives me the following options:

1. Keep the car during the term and hand back to the bank at the end (like a lease--has mileage and vehicle condition restrictions).
2. Sell/Trade the vehicle during the loan and work the best deal possible to cut my losses.
3. Pay off the loan and then pay balloon amount.

Basically, it's how bad I want the vehicle. I can either pull the money out and pay everything up front or I am pushing that money towards the end--either way, I'm paying it. If they accept my offer, I'm going to do the balloon loan. I'd rather keep the money in my accounts and worry about it later. In my 20 years of buying vehicles, this is the 1st vehicle that would even make me consider doing this. Who knew it would be a Dodge? :lol:
 

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Have you contacted GM to see what your buyout would be? In other words.. How much would it cost you right now to buy it from them. Then you can treat it as a trade at the Dodge dealership. Depending on your payoff that might save you some money.
When we did this we were leasing a 2013 Ford Edge and if I recall they were originally 3k under what we needed to buy the Edge from Ford. With incentives and some haggling we got the charger like $2000 under list and added $1500 from the Edge. When we left the Dodge dealer owned the edge and we had the car we wanted. We had 12 MO left on our lease.

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Discussion Starter #12
Have you contacted GM to see what your buyout would be? In other words.. How much would it cost you right now to buy it from them. Then you can treat it as a trade at the Dodge dealership. Depending on your payoff that might save you some money.
When we did this we were leasing a 2013 Ford Edge and if I recall they were originally 3k under what we needed to buy the Edge from Ford. With incentives and some haggling we got the charger like $2000 under list and added $1500 from the Edge. When we left the Dodge dealer owned the edge and we had the car we wanted. We had 12 MO left on our lease.

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Yes--I called GM Financial. The buyout was crazy--believe it or not--it was in my best interest for the dealership to pay off remaining lease payments.
 

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Yes--I called GM Financial. The buyout was crazy--believe it or not--it was in my best interest for the dealership to pay off remaining lease payments.
Generally, the buyout of a lease is the sum of the remaining payment plus the lease return fee. Which is HORRIBLE
 

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Discussion Starter #14
Generally, the buyout of a lease is the sum of the remaining payment plus the lease return fee. Which is HORRIBLE
I've leased cars for 20 years--never paid a lease return fee with GM. The deal was better with the lease payments being paid off--better monthly payment and less up front. Don't ask me how--but that's how the numbers played out.
 

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I've leased cars for 20 years--never paid a lease return fee with GM. The deal was better with the lease payments being paid off--better monthly payment and less up front. Don't ask me how--but that's how the numbers played out.
That generally happens when the wholesale value is more than the residual value. I leased a car for my mom through Nissan and they vacated the return fee (which was called something else) when you leased a new vehicle with them.
 

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My friend had a bad experience with this kind of deferral loan, so I wouldn't recommend you. I didn't really understand what happened with the lease and which were the contract conditions, but as I remember he paid much more money for the car than he was supposed to do. Actually, I don't use to take the cars on lease. Usually, If I don't have enough money I take a loan. Moreover, I apply to the services of the bank that I trust. The last time when I bought a Porshe, I took a loan from Norwegian commercial bank. I'm still paying the loan back, but I have no issues with it.
 

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My friend had a bad experience with this kind of deferral loan, so I wouldn't recommend you.

You're four and a half years too late - he bought it in October 2015...


 

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I am currently looking for a new car and I had the same type of issue with my dealership. Surprised to see that this still happens. I am about 15 months into a lease but I'd like to make an upgrade and since I have to put more money into it, I am low key bummed. I've been thinking that I should take a look at some of those small short-term loaning companies to help me pay up the difference just because the deal is time-sensitive and I don't really have anyone who can lend me that money right this moment. I have been googling it and there are a few companies that seem like a good match (I'll leave them below). What is your take on this? I feel like it will be a nice deal.


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You can check it here: https://credit-10.com/mx/credito-automotriz/
 
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