I was wondering if anyone had some advice regarding the following:
I recently pulled our credit and Ally Financial is showing a charge off (CO) in the amount of $997.77 for a Chevy Volt lease we had back in 2013. The amount was written off sometime in 2020 and we were sent a Form 1099-C. I spoke with Ally Financial today and was told the charges were for excess wear and tear - it was our understanding that when we returned the car this was being taken care of by the dealer - we turned the car in a month or two early with low miles and some equity in it, and leased another Volt from the same dealer. The rep from Ally that I spoke with today said that even if I wanted to do a PFD I couldn't because our balance is showing as $0.00.
Sooooo… based on the above and the below example of how the account is showing on our Experian report, what do you guys suggest we do to clean this up???
Any help, advice, guidance would be greatly appreciated.
THANK YOU in advance!
This is how it's showing on our Experian Report:
Account Name: ALLY FINANCIAL
Account Number: ######XXXXXX
Account Type: Auto Lease
Responsibility: Joint with XXXXX
Date Opened: 5/30/2013
Status: Paid in settlement. $998 written off.
Status Updated: Aug 2020
Balance Updated: -
Recent Payment: -
Monthly Payment: $0
Original Balance: $13,065
Highest Balance: $0
Terms: 36 Months
On Record Until: May 2024
Payment History: Current on payments from August 2014 thru July 2017, then it shows CO (Charge-off) from August 2017 thru July 2020, and finally it shows CLS (Closed) August 2020.
This seems like a weird and unfortunate situation to be in. If you had equity in the lease when you moved to your new vehicle the dealer should have paid off your existing lease and purchased the vehicle from you, there should be no excess wear and tear charges assessed in this instance. Also, the dates seem really strange to me. Was the lease a 36 month lease? Or did you trade the lease in for a new one in August of 2014? The current payments from August of 14 to July of 17 looks like a full 36 month term lease. It almost seems like maybe Ally merged a different account with yours. Your lease should not have shown any positive payment history after April of 2016, if it was a 36 month lease.
Best of luck and keep us updated with what you find out.
Thanks for your response @Anonymous !
It was a 36 month lease - and now that I look at the dates you are right they're strange.
It was so long ago I'm having trouble remembering all the details. What I do remember is: we had the car on lease for almost the entire 36 months. When we turned the car in the dealer used our equity in the car towards a new lease. The new lease was with GM Financial.
Something isn't adding up, I wonder if I can use this to help clear things up.
Hopefully one of the gurus on here has some advice!
If you do not have the paperwork from when you traded the Volt in, I would advise contacting the dealer and see if they can send you the documents from when you traded your previous lease in (they should still have these on file). The dealership should have a record of paying your account off.
I worked at a dealership that did a large number of leases, the majority of our new car sales were leases. When your lease is up there are 3 options: turn in, buy out, and trade in. Each has a different payoff and process. When turning in you do not get any equity and the leasing company (Ally in this instance) will collect the collateral and assess any fees in a final bill. These fees can include excess wear and tear, excess mileage, early termination, and any other fees that might be in your lease contract. Or you can buy the lease out and keep it, you would pay the residual value, any outstanding balance, any applicable taxes, and any applicable fees in one lump sum and be completely done with and have no more obligations with Ally. Trading in would essentially work the same as buying out, but the dealer would be the one paying the lump sum and the fees and taxes may be different. Based on this, any obligations owed to Ally should have been completely handled in April of 2016. The fact that the account does not show negative payment history until 2017 is very strange and looks to be completely unrelated to your lease.
I do not have much experience with contesting bad/inaccurate info, so hopefully someone more experienced will be able to jump in and give you a more direct guide to handling this.