We know that many companies and individuals are having trouble because of the coronavirus crisis but this is a bit crazy. It seems that some dealers are refusing to take back lease returns that are or are about to expire. Yeah, really. This happened with a woman who was returning a Kia Sportage that expired in April. When she called to set up the return the dealer refused to take the Sportage back unless the customer leased another vehicle from them. So your lease is up but the dealer refuses you from returning it.
Some dealers say a new lease is the only option you have
The dealership went on to say that was the only option she had. When the woman called Kia Motors Finance the representative told her the dealer had to take the Sportage back. But numerous attempts by Kia Finance to inform the dealer by phone met with disconnects and hang-ups.
Then she contacted other nearby Kia dealerships but they also refused to take the Kia back. Yikes! But there are more than Kia dealers refusing to take cars back according to USA Today. Nine other incidents of a similar refusal from various manufacturers were cited. The dealers either outright refused or made it difficult for customers to return their vehicles once the lease was up.
The burden is on consumers to accept an extension or a new lease
Now the burden is on the consumers to either accept a lease extension or a new lease. And with 340,000 vehicles coming off of leases each month there is a backlog of vehicles. That’s because they can’t be auctioned off because there are no auctions being held.
That’s 4.1 million leases this year alone. It also points to the fact that there should be some killer deals with that many vehicles waiting to be sold. Obviously, it is in the best interest of the dealer for you to continue making monthly payments for your leased vehicle.
But by taking an extension you’re still paying for registration and insurance plus your monthly payment is still the same.
There is a back-and-forth between the dealer and corporate as to which one should take the car back
A consumer in San Jose, California, was told a one-month lease extension was the only option available for his 2017 BMW X3. Another in New Jersey has set aside his VW Tiguan since the lease ran out on April 10. He’s still paying for insurance but can’t get the dealership to take it back and VW corporate says it is the dealers’ responsibility to take it. So there is just a back-and-forth between the two.
Some dealers claim they’re closed so there is no one to process the return. Others say their lots are filled with lease returns and they have no more room to accept any more cars. The dealers can’t offload the surplus of cars because auction houses are either closed or can’t involve third-party inspections because of social distancing rules.
Some offer to waive two months but instead, consumers find it’s only deferred
Some companies are offering to waive two months of payments if you extend your lease for six months. But some consumers who have been offered this option find that the payments have been deferred not waived. That raises other problems that must be dealt with.
But dealers also know that many who lease will go back to lease from the same dealer again. So it behooves them to keep the customer happy because there’s a good chance he or she will step up again.