A caller named Caleb opened a recent Ramsey Show Highlights segment with a bit of a shocking statement: “I hate myself now after listening to you guys.”
He had traded in a paid-off car and put $10,000 down on a lease to get his monthly payment to $240. His 40-mile daily work commute then pushed him 4,000 miles over his mileage limit, with 13 months still remaining on the contract. The overage fee was $0.25 per mile.
He earned $100,000 a year but had only $2,000 in savings, and his wife’s car still had $19,000 owed on it.
A $240 Monthly Payment Hid the Real Cost
The problem was Caleb had gotten himself into a bad lease. As George Kamel framed it: “You’re just prepaying the most expensive section of depreciation and then handing back the car.”
A new car loses the largest share of its value in the first two to three years. A lease charges you for exactly that stretch. When you drop $10,000 at signing, you are paying depreciation up front in exchange for a lower monthly payment, with no equity to show for it. At the end, the car goes back. There is no title, no trade-in value, no asset to sell. The cash is gone.
Trading in a paid-off car to do this compounds the damage. A paid-off vehicle has no monthly payment, and its resale value belongs to you. Rolling that equity into a lease converts an owned asset into prepaid depreciation.
His Daily Commute Blew Through the Mileage Cap
Lease mileage limits are usually set at 10,000, 12,000, or 15,000 miles per year. A 40-mile daily commute alone can burn through a standard cap before personal driving is added. At $0.25 per mile, being 4,000 miles over the cap becomes a real end-of-lease bill for 13 more months.
The Consumer Financial Protection Bureau flags leases as a frequent complaint category. The CFPB received approximately 28,500 vehicle loan or lease complaints in 2025, and lease-related complaints increased by 62% compared to the monthly average for the prior two years. Mileage overages and end-of-term charges are common flashpoints.
3 Ways Out of This Mess, but None Are Good
George Kamel walked Caleb through the three ways he could get out of this bad lease:
- Early termination. The leasing company demands remaining payments, fees, and a termination penalty. This is the fastest exit and almost always the priciest.
- Lease transfer. Some contracts let another driver assume the lease. Finding a taker for a car already over on miles is difficult.
- Lease buyout. Pay the residual value stated in the contract, take the title, and decide whether to keep or sell the car. Kamel favored this route: “The lease buyout is the best option financially speaking, because then at least you own the car, and then you can sell that car for what it’s worth.”
His illustration used made-up numbers to show the mechanic: “So the hope is that you find out the buyout amount is, let’s say, $20,000, $15,000, but the car is worth $30,000. So now you buy it out, and you then sell it, and you have all that money to go buy yourself a different car in cash.” The buyout only works if the residual is meaningfully below market value, so it’s important to check the contract math before assuming it’s a win.
When the co-host pointed out that the dealer often resells the returned lease as a certified used car at a markup, Kamel’s response was blunt: “That’s a genius scam.”
Key Takeaways
Caleb’s $240 payment never reflected the true cost of the lease. He surrendered a paid-off car, paid a down payment of $10,000, and still faced mileage penalties on a vehicle he did not own.
Before signing a lease, drivers should calculate the upfront cash, depreciation, mileage limits, and end-of-term charges instead of judging the deal only by its monthly payment.
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