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Co-signer is equally responsible for all contract payments - there is no differentiation between the amounts owed monthly and the amounts due at the end between the parties. If there were a difference, then the contract would say so - if it doesn't specify then you both are responsible for the payment.
You should see the words to the effect "jointly and severally" in the agreement meaning if she doesn't pay all of it (or none of it), you are responsible for the payment.
How is that overage handled? Since the loan would be paid off, if she didn't pay the overage fee or whatever it shouldn't show up as a negative item on our credit reports, right? Would it be sent as a bill that could in turn go into collections if not paid? I'm just planning a little CYA on my part, as even though I know she'll make the last 4 payments I could see her pulling some sort of stunt regarding the mileage fee. Since she'll be the one returning the car and she's the primary, I won't have any documentation or communication on this so I need to figure out a way to be informed of this. I suppose I could contact the dealership and let them know to contact me regarding the turning in of the vehicle?
Not paying for the mileage would be no different than not making the lease payment. It is agreed to the same as the lease payments and is an obligation of the lease. So, yes it would go as a negative reporting of the payments. The ONLY way to CYA on this one is to be there when the lease is returned and ensure that the overage is paid.
But the mileage isn't part of the loan itself on the credit report. There are 4 payments left and the amount owed is 4X the single payment. Once the 4th payment is made, the loan balance is $0. I don't see how a late payment could be reported on an account with a $0 balance. Are you saying that the mileage overage fee would be added back into the loan before the loan closes out, so the $0 balance would go up to $X and then you'd have 1 month to pay $X?
When you sign for a lease, it usually says all fees, etc. are due at lease termination. This usually includes mileage overages, etc. Technically, all amounts due on leases are usually due and payable at the time you turn the vehicle in. The only exceptions usually are fees for damages, etc. which sometimes you will not know at turn in, depending on how the company handles lease-end inspections. Nowadays, they try to get you to do inspections a couple of weeks early, so they are aware of mileage overages, etc. - thus they can tell you then how much is due at lease end (at the time you turn the vehicle in).
My advice is check the contract before the vehicle is turned in and make sure there is a plan to pay any amounts due at that time.
Here is an example from Toyota's Lease End FAQ's:
What charges should I expect on my end of term invoice?
Like you, we hope you have no charges on your lease-end, but it's possible these may be included, if applicable:
@Anonymous wrote:But the mileage isn't part of the loan itself on the credit report. There are 4 payments left and the amount owed is 4X the single payment. Once the 4th payment is made, the loan balance is $0. I don't see how a late payment could be reported on an account with a $0 balance. Are you saying that the mileage overage fee would be added back into the loan before the loan closes out, so the $0 balance would go up to $X and then you'd have 1 month to pay $X?
Essentially, yes