Lease contract termination due to insurance policy?

[coterotie]

I'm not going to bash you , but man your sister....

So she's going to spend $18,000 to save what ~$7,000?  And she probably never got anything in writing from them as to what they would actually do if she didn't do the insurance? 

I nominate this string for a sticky.  How to get good advice, ignore it and dig yourself a gigantic financial hole.

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@RushXTC wrote:

My sister ended up trading for negative equity, She bought a 2015 Honda Civic, Rolled over about $15,000 into the new loan, She can indeed afford the higher car note + highest coverage, But does she want to? No.

Same with me, I can afford to have the highest coverage for my 2013 Mustang Convertible, But I choose the minimum for full coverage and use the rest of my free money on modifying my vehicle. ($15,000 into it). I know 90% of the users here make more than us together, But my point is, Just because we can afford it, Doesn't mean we HAVE to.

So go for it, bash me.

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[Anonymous]

RushXTC care to scan the back of the contract (with the terms and conditions) to show us just how hard it is to find the insurance infromation in it? 

Not that it matters -- you are responsbile for the WHOLE contract. Not the part that you consciously or subconsciously chose to pay attention to, not the part that you asked about or the part that someone mentined but the whole freaking contract.  Again we are not talking a complex interaction of several rules that you may not be aware off. The lease contract insurance clause is very clearly stated.  

For carrying the minimum of insurance, you get what you paid for. God forbid you get into a car accident with human injuries or with way more expensive vehicle. Then you will have to say goodbye to the mustang you have poured so much into since you are responsible for making up the difference from what the insurance will pay. 

you say you have poured in 15K into the mustang but there is no way that comes out of your insurance savings...unless you know you bought a 2013 mustang >30 yrs ago (which btw would be a nifty trick).  You are just deluding yourself to where the money is coming from or that this forum cannot do the math and realise the truth.  

As for "My sister ended up trading for negative equity, She bought a 2015 Honda Civic, Rolled over about $15,000 into the new loan, She can indeed afford the higher car note + highest coverage, But does she want to? No."

This is why she is walking away with 15k negative equity? Because she doesnt; want to pay the few bucks for the car insurance... but she is paying more than a few bucks a month to carry the negative equity???? A barebones 2015 honda civic LX manual msrp is 19k, say she got a deal at the lowest truecar estimate of 17k. That is still accepting 88% increase in price even assuming 0% fiancing/cash buying. Tell me how this is not mindboggling financially irreponsible and sorry to say but just plain stupid. Even if she can afford it, maybe she should have followed your words and "Just because we can afford it, Doesn't mean we HAVE to."

On the flip side, next time your sister wants to toss 15k away, I (and I am sure a lot of folks here) would rather she toss it this way than the dealer way  

[Anonymous]

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@Anonymous wrote:

RushXTC care to scan the back of the contract (with the terms and conditions) to show us just how hard it is to find the insurance infromation in it? 

Not that it matters -- you are responsbile for the WHOLE contract. Not the part that you consciously or subconsciously chose to pay attention to, not the part that you asked about or the part that someone mentined but the whole freaking contract.  Again we are not talking a complex interaction of several rules that you may not be aware off. The lease contract insurance clause is very clearly stated.  

For carrying the minimum of insurance, you get what you paid for. God forbid you get into a car accident with human injuries or with way more expensive vehicle. Then you will have to say goodbye to the mustang you have poured so much into since you are responsible for making up the difference from what the insurance will pay. 

you say you have poured in 15K into the mustang but there is no way that comes out of your insurance savings...unless you know you bought a 2013 mustang >30 yrs ago (which btw would be a nifty trick).  You are just deluding yourself to where the money is coming from or that this forum cannot do the math and realise the truth.  

As for "My sister ended up trading for negative equity, She bought a 2015 Honda Civic, Rolled over about $15,000 into the new loan, She can indeed afford the higher car note + highest coverage, But does she want to? No."

This is why she is walking away with 15k negative equity? Because she doesnt; want to pay the few bucks for the car insurance... but she is paying more than a few bucks a month to carry the negative equity???? A barebones 2015 honda civic LX manual msrp is 19k, say she got a deal at the lowest truecar estimate of 17k. That is still accepting 88% increase in price even assuming 0% fiancing/cash buying. Tell me how this is not mindboggling financially irreponsible and sorry to say but just plain stupid. Even if she can afford it, maybe she should have followed your words and "Just because we can afford it, Doesn't mean we HAVE to."

On the flip side, next time your sister wants to toss 15k away, I (and I am sure a lot of folks here) would rather she toss it this way than the dealer way  

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Agreed. I'm sure she thought it was a smart move because now shes probably paying for a vehicle she actually likes.. and wanted. However, due to her not thinking smart, financially she just dug herself a deeper hole and is probably paying double for the vehicle... she'll be WAY upside down with 0 equity from the start. All to avoid paying extra for insurance... she's now giving them $15k for something she wouldn't/doesn't own. No offense but this sounds like a move not even a 18 year old would make with their first car purchase........ GOOD LUCK.

[sccredit]

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@enharu wrote:

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@Anonymous wrote:

"And of course she didn't read the contract and see that spelled out.  Nobody does."

Relly? Noone does? Mod cut. She entered a legal contract.  Who signs a legal contract without reading it?  Especially because you can ask for the lease contract in advance and take it home to read it over everal days. And you can sit with the finance guy and ask for every line item to be explained. It isn't anybody's job to make sure your sister know what she is signing -- it is her job to read what she is signing. Lease contracts are not even that long!

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Let's remember to be respectful in your comments, as to not violate myfico's TOS and User Guidelines.

Lexie, myFICO Moderator

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most people do not read what they sign. This isn't just for auto leases. It applies to credit cards, mortgages, car loans, personal loans, and even investments! Kinda shocking since one should be concerned where his money is being invested into.

Some are too excited over getting a car / house / money that they cant even be bothered about the boring walls of text. 

However, some people do not read not because they do not care, but simply because they wouldnt have understood it anyhow even if they tried. There's so many legal jargon in many contracts that it makes it impossible for the uneducated or elderly to understand. 

The job of the finance manager is to sell you the car, and possibly bundle more crap while he's at it. You can ask him to explain, but he may not explain it well, because he may not know it himself, or that he wants you to drive the car out the lot after all so he isnt going to say anything bad.

That being said, i'm not saying it's ok to not read any contracts. Do read them. However it's not as easy as it may seem to be for everyone, especially older people.

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I remember when the Notary came to my house for me to sign my mortgage docs.  My wife asked him if he wanted a drink and he said "no we can be done in about 15 minutes".  I laughed, told him we would be a couple hours because I was readin every document I was signing.  He laughed and asked if that drink was still being offered.  Told me how many people DO not read everything.  

[sccredit]

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@RushXTC wrote:

My sister ended up trading for negative equity, She bought a 2015 Honda Civic, Rolled over about $15,000 into the new loan, She can indeed afford the higher car note + highest coverage, But does she want to? No.

Same with me, I can afford to have the highest coverage for my 2013 Mustang Convertible, But I choose the minimum for full coverage and use the rest of my free money on modifying my vehicle. ($15,000 into it). I know 90% of the users here make more than us together, But my point is, Just because we can afford it, Doesn't mean we HAVE to.

So go for it, bash me.

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So you spent $30k-ish on a car and are spending tons of your hard earned money modifying it and carry state minimums?  That has absolutely nothing to do with how much money you make vs what others make.  

In order to comply with the terms of use of this website I am gonna just take myself away from my computer and not say the things you are trolling for.  Just very friggin sad.

[Anonymous]

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@sccredit wrote:

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@enharu wrote:

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@Anonymous wrote:

"And of course she didn't read the contract and see that spelled out.  Nobody does."

Relly? Noone does? Mod cut. She entered a legal contract.  Who signs a legal contract without reading it?  Especially because you can ask for the lease contract in advance and take it home to read it over everal days. And you can sit with the finance guy and ask for every line item to be explained. It isn't anybody's job to make sure your sister know what she is signing -- it is her job to read what she is signing. Lease contracts are not even that long!

---

Let's remember to be respectful in your comments, as to not violate myfico's TOS and User Guidelines.

Lexie, myFICO Moderator

---

most people do not read what they sign. This isn't just for auto leases. It applies to credit cards, mortgages, car loans, personal loans, and even investments! Kinda shocking since one should be concerned where his money is being invested into.

Some are too excited over getting a car / house / money that they cant even be bothered about the boring walls of text. 

However, some people do not read not because they do not care, but simply because they wouldnt have understood it anyhow even if they tried. There's so many legal jargon in many contracts that it makes it impossible for the uneducated or elderly to understand. 

The job of the finance manager is to sell you the car, and possibly bundle more crap while he's at it. You can ask him to explain, but he may not explain it well, because he may not know it himself, or that he wants you to drive the car out the lot after all so he isnt going to say anything bad.

That being said, i'm not saying it's ok to not read any contracts. Do read them. However it's not as easy as it may seem to be for everyone, especially older people.

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I remember when the Notary came to my house for me to sign my mortgage docs.  My wife asked him if he wanted a drink and he said "no we can be done in about 15 minutes".  I laughed, told him we would be a couple hours because I was readin every document I was signing.  He laughed and asked if that drink was still being offered.  Told me how many people DO not read everything.  

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Smart move. After lurking the forums I am starting to become the same way. My wife is more laid back so it annoyed her at first, but now she understands its just for the best and to protect ourselves. I do not trust these people. I just had it out with a car salesman we purchased from 7 months ago who told us we'd get $8 oil changes (our oil change is about $100) in the future... finally that time came, the dealer completed the oil change and hit me with a bill for $60... I was furious. Lets just say they ended up giving it to me for free. You can't be nice with these people, they don't care what you go through after the fact.. as long as they get that bonus.

[Anonymous]

Talk about a bad mistake.  She made it when she rolled $15000 into the purchase of a Honda Civic.  All of a sudden the Civic turns into  a BMW.  IM shocked the the finance company allowed it.

[Anonymous]

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@Anonymous wrote:

Talk about a bad mistake.  She made it when she rolled $15000 into the purchase of a Honda Civic.  All of a sudden the Civic turns into  a BMW.  IM shocked the the finance company allowed it.

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They don't care.. they probably have an idea of whats going to happen.

[enharu]

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@Anonymous wrote:

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@Anonymous wrote:

Talk about a bad mistake.  She made it when she rolled $15000 into the purchase of a Honda Civic.  All of a sudden the Civic turns into  a BMW.  IM shocked the the finance company allowed it.

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They don't care.. they probably have an idea of whats going to happen.

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+1.

Finance / sales manager don't care. They just want the vehicle out of the lot. That's how they make money.

I'm surprised Honda approved it however. Maybe that borrower has good income (and/or assets) to support the loan.

[Anonymous]

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@enharu wrote:

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@Anonymous wrote:

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@Anonymous wrote:

Talk about a bad mistake.  She made it when she rolled $15000 into the purchase of a Honda Civic.  All of a sudden the Civic turns into  a BMW.  IM shocked the the finance company allowed it.

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They don't care.. they probably have an idea of whats going to happen.

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+1.

Finance / sales manager don't care. They just want the vehicle out of the lot. That's how they make money.

I'm surprised Honda approved it however. Maybe that borrower has good income (and/or assets) to support the loan.

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Indeed and God forbid... they will receoop