My Leased Car Is Keeping Me Broke

Summary

The Ramsey Show Highlights – “My Leased Car Is Keeping Me Broke”

Date: May 28, 2026
Hosts: John, Kelsey
Featured Caller: Anonymous (Leased Volvo C40 Recharge)

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Episode Overview

This episode dives into the financial pitfalls of leasing a vehicle—especially an electric vehicle (EV) with rapid depreciation and harsh mileage penalties. The caller is overwhelmed by expensive lease costs, surprise mileage overage fees, and few exit options. John and Kelsey walk through the scenario, explore every possible (and painful) option, and deliver hard-hitting truths about car leases and responsible money decisions.

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Key Discussion Points & Insights

1. The Dilemma: Stuck in an Expensive EV Lease

• The caller is 11 months away from lease end on a Volvo C40 Recharge and already 5,000 miles over the contract limit.
• Mileage overage fee: 25 cents per mile, with projected penalty around $5,000 at lease turn-in (00:06).
• Current plan: Considering buying a $5k–$6k beater car now, parking the leased vehicle to stop the bleeding, and using those funds more wisely (00:28).

2. Exploring All Options (And How Bad They All Are)

• Early buyout: Over $40,000, but the car’s value is only about $29,000—putting the caller $11,000 underwater if they bought and tried to sell it (01:16-01:39).
  • John: “So you’d have to pay 40 to get it, but then if you sold it, you're 11 grand underwater.” (01:31)
• Lease transfer: Not allowed by the dealer (02:54).
• Early termination: Unknown, but likely very costly—caller plans to investigate (03:01, 03:43).
• Parking the car: Keep paying the $663/month lease while using a cheap used vehicle, possibly minimizing the excessive mileage fees (02:12, 06:49).

3. Why EV Leasing Hurts Even More

• Extra sting: EVs can depreciate faster, piling on unexpected pain at lease-end (01:23, 01:53).
• Kelsey: “I still can’t get over, on an EV, they're charging you 25 cents a mile. … It's impressive, right?” (04:05)

4. Breaking Down the Caller’s Finances

• Lease payment: $663/month with 11 months to go (04:18, 04:26).
• Savings: $6,000 set aside, mainly to cover possible lease-end penalties (05:22).
• Income: $6,584/month (05:43).
• Other Debts: $21,844 in student loans (05:51).
• John: “It’s going to be hard to do both—to chip away at the student loan debt, pay the lease payment, save up for the beater car. But I like the idea of limiting the damage...” (06:02)

5. Lease Math: Limiting “Stupid Tax”

• John coins the cost of these mistakes as a necessary “stupid tax”—expensive, but educational. He advises keeping lease damage minimal, researching all exit clauses, and potentially parking the car if that nets the lowest cost (02:01, 06:49, 07:09).
  • John: “As much as it hurts your soul to pay 660 bucks for parking a car…” (07:01)
  • Caller: “It's already hurting my soul…” (07:03)
  • John: “The good news is you’ll never lease a car again.” (07:09)

6. Hard Truths on Leasing

• Caller’s advice to listeners: "It is the most financially irresponsible way you could possibly operate and quote, unquote, not own a vehicle. Do not do it to yourself." – (07:39)

• John: Leasing is framed as a form of debt in everything but name. The dealer ensures you pay all the depreciation, while “renting” the vehicle for a high price:

  • “A car lease... there's no, like, loan. It's just a contract where I have to pay this amount and there's no way out of it forever. ... I’m going to call it, loosely, a form of debt.” (07:49)
  • “The depreciation is built right into your lease payment. So you’re paying the most expensive part of depreciation to the dealer.” (08:21)

• Kelsey adds a broader financial insight: “Who’s getting rich? ... The lease is one of the greatest inventions for a car company. ... You give them, you basically buy down all of their depreciation.” (08:21-09:19)

• John: “Now they still make a profit. ... They sell a gently used car that’s got very low miles. ... It’s brutal.” (09:19-09:28)

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Memorable Quotes & Moments

• John (on buying out and selling the lease):

  “So you’d have to pay 40 to get it, but then if you sold it, you’re 11 grand underwater.” (01:31)

• Caller (on leasing):

  “It is the most financially irresponsible way you could possibly operate and quote, unquote, not own a vehicle. Do not do it to yourself.” (07:39)

• John (on parking a car for $660/month):

  “As much as it hurts your soul to pay 660 bucks for parking a car…” (07:01)

• Kelsey (on who benefits from leases and rewards programs):

  “Who's getting rich off what I've been doing next. And the lease is one of the greatest inventions for a car company.” (08:21)

• John (on the "stupid tax"):

  “This might have been worth all the fees in the world if it means you’re avoiding a bad money decision [in the future].” (07:14)

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Timestamps for Key Segments

• 00:06 – Caller explains lease situation, mileage overage, and plan for a beater car
• 01:10 – Exploring buyout and resale options; under water on lease
• 02:21-03:01 – Discussing other exit scenarios (termination, lease transfer)
• 04:18 – Revealing painful $663 monthly lease payment
• 05:14 – Caller’s finances: Savings, income, and outstanding debt
• 06:49-07:09 – Should the caller park the lease and drive a beater?
• 07:39 – Caller’s harsh advice against leasing
• 07:49-09:28 – John and Kelsey break down why leasing is a bad deal and who profits

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Conclusion

The episode is a cautionary tale about the real costs of car leasing—especially when it comes to high-depreciation vehicles and strict mileage penalties. The hosts urge listeners to see leasing for what it is: an expensive way to “not own” a car. They recommend minimizing future damage, researching all exit options, and using this financial misstep as a permanent lesson against leasing in the future. The caller’s frustration and the hosts’ frank advice make this both a compelling and educational listen for anyone considering a lease.

Transcript

[John]

Brought to you by the EveryDollar app. Start budgeting for free today.

[Caller]

I am currently leasing a vehicle, and I am so excited to get done with it. My plan was to buy a beater car once the lease is up, but I have another 11 months to go on it. I'm currently 5,000 miles over already what I'm supposed to be.

[John]

What are they dinging you for that? What's the fee?

[Caller]

It's 25 cents a mile. So by the time I figured, on average, how much? Yes, on average, how much I drive, by the time I turn it in, I'm looking at an extra $5,000. I would pay for the overage on the mileage. So my question is, should I go ahead and buy a beater car? Right now, I'm thinking in the range of 5,000 to $6,000 and go ahead and park my leased vehicle. Go ahead and just let that ride out, and then I'll have pretty much. I'm allocating my money to spending it on a beater now instead of giving it to a dealer at the end of the lease. Would that make sense?

[Kelsey]

That's a great question. Could you go buy the car outright?

[John]

Yeah. What's the early buyout amount?

[Caller]

I could. It would be a little north of $40,000.

[John]

Goodness gracious. What are you driving right now?

[Caller]

It is worth 29. It is an EV, and so it's depreciated immensely.

[John]

Ouch. So you'd have to pay 40 to get it, but then if you sold it, you're 11 grand underwater.

[Caller]

Correct.

[John]

Immediately.

[Kelsey]

Wait, they're charging you 25 cents a mile on an EV?

[Caller]

Yes.

[John]

That should be illegal. That should be okay. What EV is this? What's the make and model in here?

[Caller]

It's. It's a Volvo C40 recharge, and it's a 20. 24.

[John]

Oof. All right, I'd probably put this in the stupid tax category, but you're saying, hey, instead of paying five grand in penalties because you're going to continue to go over the mileage based on your commute.

[Caller]

Absolutely, yes.

[John]

You're saying just park it. I'd rather just use that five grand to get me a beater car so that when all said and done, at least I have a working vehicle.

[Caller]

Yes. That's kind of where my mind's at. Of course, it kind of. It breaks my brain a little bit to have two vehicles at the same time, but circumstantially, this is kind of where I'm at.

[John]

Yeah. I mean, that is a pretty wild solution, but it's, it makes sense in my head and I'm, I'm trying to think if there's other scenarios I'm trying to go through, like what are all of the options and then what's the one that sucks the least? Have you talked to the dealer about this?

[Caller]

So I haven't talked to them about this scenario specifically. I have looked to see if I'd be able to have someone else take it over and they will not allow that.

[John]

Okay.

[Caller]

By the time I.

[John]

What's the early termination?

[Caller]

I don't know. The fee? To be honest, I haven't looked at it because I'm just assuming it's so unreasonable.

[Jade]

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[Caller]

So unreasonable. So I could look into that.

[Kelsey]

That's probably a great assumption. Gosh, I still can't get over like on a, on a, on an engine, a gas powered engine. There's going to be wear and tear. That's unique and different than on a, on an EV. I just can't believe they're charging you 25 cents a mile. That's.

[Caller]

Yeah, whatever.

[Kelsey]

I think they can't get worse. They get worse. It's impressive, right?

[John]

Leases are definitely my least favorite way to have a V. I was going to say own a vehicle, but you don't even own it. You're just renting. Expensive. What's your lease payment?

[Caller]

Burns even more. It's $663 a month.

[John]

So you're going to have to pay that for 11 more months while it's just parked.

[Caller]

I'll have to pay it for 11 more months while it's parked.

[John]

I would try to level with them at the dealership. Not that they're competent, nice people, but I would explain the situation. Say, hey, listen, if I buy it out, I'm 11 grand under day one after already forking over 40 grand. That I assume you don't have in cash right now.

[Caller]

Correct.

[John]

The other option is the termination, which I would find out what the early lease termination fees are in case. This is a wild. In case. In case. It's the cheapest option, the cheat, the lowest amount of stupid tax you could pay to get out of this thing. Since they won't let you do a lease transfer because the buyout is not an option. And so therefore you might at least then sort of get rid of the other options to go. Okay. My best option is just hang on to it, pay it, stay under the, the mileage, and save up for a beater car in the meantime.

[Kelsey]

Do you have, do you have 29 grand? You have 30 grand to buy it from them?

[Caller]

I do not.

[John]

Okay, how much do you have?

[Caller]

So right Now I have $6,000, and that is a sinking fund, knowing that I am going to potentially have to pay that in fees when I turn it in. And I'm. I'm like very aggressively paying down student debt, so I just don't have that cash on me.

[Kelsey]

No, that's great.

[John]

What do you make a month?

[Caller]

$6,584. Okay.

[John]

I love the specificity. That's great. And what other debts do you have?

[Caller]

So I've got a student loan, and that is $21,844.

[John]

And that's it. Student loan and the lease?

[Caller]

Yes.

[John]

Okay. Yeah. I mean, it's going to be hard to do both to chip away at the student loan debt, pay the lease payment, save up for the beater car. But I like the idea of limiting the damage in fees we're paying on this lease, at least if you do nothing else. And then I would see what your options are with the dealer. I would do a whole lot of research to find out, you know, what your rights are, what your options are before you make any big moves.

[Kelsey]

But my guess is it's pretty ironclad.

[John]

I mean, you sign the contract, here's the fine print, and they're going to say, deal with it, right?

[Caller]

Yeah. And I was definitely going to take your advice to see if there's any way I can have some wiggle room that I just am assuming I don't have right now. But if, if that is not an option, would you suggest I just park it and drive a beater?

[John]

Yeah. So I would do the math. Says that might be the best option. That's the wild part. As much as hurts your Soul to pay 660 bucks for parking a car.

[Caller]

Yeah.

[John]

Oh, my gosh. I'M so sorry.

[Caller]

It's already hurting my soul. I'm like, if this can minimize the damage, I'm all game.

[John]

Well, the good news is you'll never lease a car again.

[Caller]

Oh, you, you better bet.

[John]

So that might have been worth all the fees in the world if it means you're avoiding a bad money decision. So I'm rooting for you. You're. You're going to survive it. And it'll be a fun story you tell your kids one day.

[Kelsey]

Kelsey, give us. Give America who's listening. Give them your opinion on the lease on. On someone sitting there like, I don't want to buy a car, I want to go lease it. What would you say? This is your opportunity for a commercial.

[Caller]

It is the most financially irresponsible way you could possibly operate and quote, unquote, not own a vehicle. Do not do it to yourself.

[John]

Thank you for that. Very helpful. Appreciate the call. And it's a good reminder on leases, John. So a car lease, people say, well, John, it's not debt. Technically, there's no, like, loan. It's just a contract where I have to pay this amount and there's no way out of it forever. If that's what you want to tell yourself that it's not debt. Even though there's a monthly payment attached that you have to pay. I'm going to call it, loosely, a form of debt. And the depreciation is built right into your lease payment. So you're paying the most expensive part of depreciation to the dealer.

[Kelsey]

Well, and so think about, I always like to ask myself, who's getting rich? Right? It's the reason I quit using airline miles. And, you know, I've talked about this off air, but, like, I remember getting a credit card with a ton of miles on it because I had to make a huge purchase that I was going to immediately get reimbursed for. And I remember thinking, hey, they're not my. This company's not my friends. Who's paying for these flights I'm getting or these hotel points. And it was people who found themselves in financial straits or having to pay. And I was like, I don't want single moms who are struggling to put food on their table to pay for my free flights. I'm out of this program. So that is what got me inspired to say, who's getting rich off what I've been doing next. And the lease is one of the greatest inventions for a car company. They get a brand new car, they give it to you for two years. You give them, you basically buy down all of their depreciation. You give the car back to them. They have a gently used car that they have contractually kept.

[John]

Now they can sell that now they still make a profit.

[Kelsey]

They still. They sell a gently used car that's got very low miles. It's perfect with no depreciation on it because you've paid it right.

[John]

It's brutal. Create your free every dollar budget today. The simplest way to budget for your life.