Early Lease Pay off?

[TimP]

Has anyone tried to pay off a lease on their TM equipment early as in the last year worth of payments.

I've got 12 payments left. As I understood I had to pay first and last payment up front plus a deposit. My statement says I've paid through payment 48 and I just got the invoice for payment 49 which is automatically withdrawn from my account on the 7th of October.

Anyways I'm wondering what they have done for you as in payments. Cause what I can see so far is they want more money to pay it off early than to just keep paying on it. My lease was set up with a $101 buy out at the end of the term so I don't have a large buy out.

I've got the cash to pay it off in the bank and I thought I could save a little bit of money paying it off early and then I wouldn't have to worry about a payment again. From my figures they want 2,000 more than I owe. :shock:

I'm getting it in writing so I can look it over I hope it's just an error. But I'm curious if anyone has looked into this too. Needless to say I wont ever lease anything again, especially from this company. Nothing but swindling.

 

[FinanceMan]

Hi Tim,

I work for a leasing company. I am not sure who your lease is with but it is common practice to have what is known as an early termination penalty. But, even with the penalty it should always be cheaper to pay it off early than to make all payments plus the residual at the end. I guess it depends on how much the early termination penalty is. Most of the time it is calculated by taking the current principle balance times a %. The company I used to work for had a 4% penalty until you reached the last 6 months of the lease and then it went away.

Kip

 

[tman7]

Leasing is crazy. You end up paying 25% or more on the principal. I had considered leasing a new truckmount from Interlink but what started as a $17,000 truck mount would have cost me about $22,000 (before taxes) in the end.

BAWB will tell U.

 

[FinanceMan]

Easy there Tony,

Not all leases are bad. Alot of it depends on the company and how they structure the lease as well as the rate and if they mark up the product. If the lease is structured properly you should come ahead with the tax benefits.

Kip

 

[TimP]

I got a pay off before but it was like 2.5 years ago and the discount was like 10% less of what I owed but I had 3 years left to pay and it was smarter to keep the lease. I figured with 1 year left it wouldn't be a bad idea. So far I haven't seen it written down. But If I take my payment total including sales tax it's 2,000 more than my payments. I only paid first month payment I checked in the lease documents so I have 12 left. I just don't see why they wouldn't want a lump sum especially in this economy especially since they could be doing something with it.

I just looked over my lease documents and I don't see anything about penalties to pay off early. And it clearly has the 101$ pay off. And property taxes should be less on the final year (they were quoted as 500 on the last payoff) although I don't think I've had to pay them for a while because I don't own enough stuff to pay property tax in FL.

I will never ever lease again.

 

[boazcan]

Easy there Tony,

Not all leases are bad. Alot of it depends on the company and how they structure the lease as well as the rate and if they mark up the product. If the lease is structured properly you should come ahead with the tax benefits.

Kip

Please explain how "you should come ahead with the tax benefits" ? Come ahead of what? Leasing for a tax write off is stupid. You could donate the finance charges to a charity for a tax write off. Please explain on.

 

[Jim Martin]

Has anyone tried to pay off a lease on their TM equipment early as in the last year worth of payments.

I've got 12 payments left. As I understood I had to pay first and last payment up front plus a deposit. My statement says I've paid through payment 48 and I just got the invoice for payment 49 which is automatically withdrawn from my account on the 7th of October.

Anyways I'm wondering what they have done for you as in payments. Cause what I can see so far is they want more money to pay it off early than to just keep paying on it. My lease was set up with a $101 buy out at the end of the term so I don't have a large buy out.

I've got the cash to pay it off in the bank and I thought I could save a little bit of money paying it off early and then I wouldn't have to worry about a payment again. From my figures they want 2,000 more than I owe. :shock:

I'm getting it in writing so I can look it over I hope it's just an error. But I'm curious if anyone has looked into this too. Needless to say I wont ever lease anything again, especially from this company. Nothing but swindling.

If you leased it threw the same crooks that I did when I started my business and bought my CDS then you aren't going to gain anything by paying it off early.....un like financing if you pay off early then you save money on the interest....with the lease you will still pay them every over priced penny that they can suck out of you.....on the up swing...if you pay it off you can get the blood sucking leaches off your back once and for all and get it behind you....

 

[TimP]

Has anyone tried to pay off a lease on their TM equipment early as in the last year worth of payments.

I've got 12 payments left. As I understood I had to pay first and last payment up front plus a deposit. My statement says I've paid through payment 48 and I just got the invoice for payment 49 which is automatically withdrawn from my account on the 7th of October.

Anyways I'm wondering what they have done for you as in payments. Cause what I can see so far is they want more money to pay it off early than to just keep paying on it. My lease was set up with a $101 buy out at the end of the term so I don't have a large buy out.

I've got the cash to pay it off in the bank and I thought I could save a little bit of money paying it off early and then I wouldn't have to worry about a payment again. From my figures they want 2,000 more than I owe. :shock:

I'm getting it in writing so I can look it over I hope it's just an error. But I'm curious if anyone has looked into this too. Needless to say I wont ever lease anything again, especially from this company. Nothing but swindling.

If you leased it threw the same crooks that I did when I started my business and bought my CDS then you aren't going to gain anything by paying it off early.....un like financing if you pay off early then you save money on the interest....with the lease you will still pay them every over priced penny that they can suck out of you.....on the up swing...if you pay it off you can get the blood sucking leaches off your back once and for all and get it behind you....

That's why I want to pay it off. And I figured I might save 5%. But if I'm going to pay "more" then they will just have to wait for their money cause they are just dumb. And yes it's the same money sucking leaches. Cash or finance from now on!!! I hope they go out of business!!!

 

[floorguy]

Easy there Tony,

Not all leases are bad. Alot of it depends on the company and how they structure the lease as well as the rate and if they mark up the product. If the lease is structured properly you should come ahead with the tax benefits.

Kip

Please explain how "you should come ahead with the tax benefits" ? Come ahead of what? Leasing for a tax write off is stupid. You could donate the finance charges to a charity for a tax write off. Please explain on.

Yes you get screwed on the overall price, i agree, but hey someones gonna get my money soooo, why not make it a 100% no questions asked write off. no depreciation bull shit, just a straight write off..

and its for those who have a hard time tracking the resources of a conventional loan....(CUZ WE CANT ALL BE ROSIE LIKE YOU blowme blowme blowme blowme )

Just take your money and payoff something else....if you dont have anything to payoff, buy a new tool or stash it away for a rainy day

 

[floorguy]

good luck finding a bank to write a loan on CC machines...

Hell most people have a hard enough time on the simple stuff. like a car or house....

unless you have a 750 or higher score

and in that case

STFU

 

[TimP]

good luck finding a bank to write a loan on CC machines...

Hell most people have a hard enough time on the simple stuff. like a car or house....

unless you have a 750 or higher score

and in that case

STFU

If I can't finance next time I'll pay cash. It's not hard to save up the money from a summer season. And without payments my fixed over head is pretty slim as in 4-5 min charge jobs will cover it. Just insurance and phones at that point. Payroll, gas, chems, equipment and repairs will all be variable after that.

 

[steve frasier]

the first lease I inquired about I asked ir it could be paid off early, we always sent in a little extra, they said fine just send in the total amount of the payments you have left, no discount of penality

the lease we have on the Vortex is $1 buy out with a 2

 

[TimP]

Ok well I've looked at the figures.

This is what they did. Added the total of lease payments. Followed by tax.

Now get this, this is how they list it.

08-09-10 property tax and lease ending fee. ~1,500

I talked it over with my wife and she said we paid all the taxes and we couldn't get out of it. And there is a 25,000 deduction for our county for property. Well the vehicle/machine probably isn't worth that anymore. So they are charging and probably not paying......

There is no deduction for early pay off. So basically it's going to cost extra to get out of it. I guess I'll save my money and wait till next September to own it. They are supposed to call and we'll ask them why they don't want to give a discount to get the money now. Oh and BTW they say for 50$ they can figure a reduced cost buy out and they say it may save a couple of hundred...... Nothing but a lousy way to run a business if you ask me.

 

[Becker]

Leases are not loans. But not all leases are the sAme. Most leases have set terms of like 60 months. So say your lease payment is 100.00. In the end you will pay the bank 6000.00. Most of the time it does not matter if you pay it off on the 1st month of the 59th month. It will still be 6000.00. The buy out at the end is where a lot of leases differ. Some are a percent of the total. Some are fair market value or a percent of fair market value.

I paid my lease off 3 years in on a 5 year term. Only break I got was a reduction in the buy out.

But then again. Read all your terms. And negotiate the buy out if you pay early

 

[Brian R]

One of my Techs here in Dallas just got financed for a new Hydromaster and trailer at Jon Dons

 

[daniel@procarpet]

The best way to pay for a tm is to put the cash in CD and borrow against it at a very low rate. The money is in the bank to always pay the loan off if needed, but you can still work and make low payments.

Again it is simple. Don't buy it if you don't have the money.

 

[steve g]

its not a lease its a fleace. just say no to all leases and don't even think about them. they suck. the one I did on an '02 dodge diesel ended up costing me about an extra 10 grand, think about that if I had just bought the damn truck I would have saved 10 grand at the end of the day. and to ice the cake I had always planned on paying the buyout and reselling the truck because my truck would be worth more than the buyout and I would have money for a downpayment on a new truck, well I was informed I had to pay sales tax on the 16k buyout even though I transferred the title as soon as I got it, they would not release the title without charging me the sales tax. so I got hosed for a further $1100 bucks, plus you pay sales tax on each lease payment you make, so all told I paid sales tax on 50 grand instead of the 32 grand I could have bought the truck for. but remember they don't tell you about paying sales tax on each lease payment until you get ready to sign so that little bombshell is only dropped at the last minute which in my case amounted to an extra $40 bucks a month. LET ME REPEAT NEVER EVER NEVER EVER DO A LEASE ON ANY FREAKING THING!!!!!!!!!

 

[Brian R]

A bad loan can cost you $10,000.00 extra if you're not careful too.

The way they compound those loans is worse than rape if you ask me.

 

[steve frasier]

if you have a $1 buyout the IRS treates it as a loan

I got a pretty deal on my lease, probably why the company no longer does leases

 

[tman7]

if you have a $1 buyout the IRS treates it as a loan

I got a pretty deal on my lease, probably why the company no longer does leases

Are you allowed to depreciate what your leasing immediately or after buyout?

 

[steve frasier]

yes as far as I can remember, you just accelerate the depreciation but you get most of your tax benefits in the earlier years of the lease depending on the total length/years of the lease

I wouldn't want to do it immediately due to phantom income you would have while still paying off the equipment

 

[floorguy]

if you have a $1 buyout the IRS treates it as a loan

I got a pretty deal on my lease, probably why the company no longer does leases

Are you allowed to depreciate what your leasing immediately or after buyout?

uhhh i think i said....(and i think i am right)

the payments are a right off instead of the depreciation

being as it has the taxes etc. added into each payment

on my truck it made me go to a expense write off, instead of mileage......which while the lease is in effect is great...after i wont get as much because ill loose that $450 per mth...but oh well

 

[XTREME1]

the benefit to the lease is it is totally written off each year no worries on depriation and no 1 time exemptions, now the dumbest advice came from , of course DanielC

The best way to pay for a tm is to put the cash in CD and borrow against it at a very low rate. The money is in the bank to always pay the loan off if needed, but you can still work and make low payments.

with CD rates as low as they are and you have cash in hand you will profit more with an outright purchase than paying someone 7-25% while your money is making what 1-3%

I would suck it up and if you have the cash pay the lease up and ask for a discount

 

[Ken Snow]

I would say find a new finance option if you are paying 7.25%. Money is really cheap right now and I would not pay cash for anything if it can be financed.

Diff strokes for diff folks.

 

[steve g]

I would say find a new finance option if you are paying 7.25%. Money is really cheap right now and I would not pay cash for anything if it can be financed.

Diff strokes for diff folks.

money is really cheap right now, but so is making any money off the cash you have in your hand, CD rates are a joke. and personally I am too scared of the stock market with obama in charge.

ken, listen to dave ramsey, pay it in cash all the time and everytime you can.

 

[XTREME1]

what do you expect from a broke dick carpet cleaner like Ken

 

[Ken Snow]

There are lots of opportunities to make money with any spare cash vs using it to buy a depreciating asset. Like I said to each his/her own.

 

[Brian R]

We've been over this before.

Money in the bank is better than no debt.

 

[XTREME1]

the amount matters Big Guy. We are talking about a small amount of money sometimes increased cash flow each month makes it easier to operate. I always bargain on rates, shit my house is below 2.5%, my business credit cards is 6.74% and I always make money on my investments(vanguard and fidelity mutual funds mostly have always paid decently even in a down economy. If you have small amount of operating income it is better to wipe it out and use the money to reinvest monthly in your business
if he frees up $200 a month how many zipcodes is that

 

[Brian R]

Nahhh, keep the money and borrow the cash flow....if need be.


I'll make a deal on $200.00/month. :mrgreen: