Dealer wants my newly leased 2016 electric car back after a week

Has any one every heard of this happening? Please read my brief description below and let me know what you think.

I leased a new electric car from a California dealership on January 1,2017.
Today I recieved NOTICE OF CONTRACT CANCELATION (of Lease agreement) dated January 10, 2017 . “…we were unable to assign the contract to any one of the financial institutions with whom we regularly do business under an assignment acceptable to us.”

I CURRENTLY have financing from the corporation that owns the car brand via the dealership. I have Tier A credit.

The letter states I should return the car. I would like to call both the car company corporate office and the financial institution that I have my loan with, but both are closed over the weekend.

This situation would make sense to me if, I didn’t already have the financing secured through their corporation and/or if I had bad credit.

In most cases I would call the dealer directly, but my concern is that I don’t have enough information and don’t know the law well enough to protect my best interest.

My gut tells me that they are not happy with our deal and are using this as a way to get out of the contract. I am happy with the deal and the car.

Any feedback on this matter would be appreciated!

If you really did get a great deal, want to keep your car then I would find a lawyer who specializes in consumer law to send a letter. Perhaps the dealer will back off after you lawyered up. I would be really clear with the lawyer on how much you want to fight this to keep costs in check,

Most likely they want to change your APR. Call their bluff and offer to return the car. No dealer wants a USED car 1 week after sale (huge negative equity)

I agree with this. Call their bluff…

If they still want their car back, park it in a garage for a month (or away from your home)… I have heard of the dealership repossessing cars after these cancellation requests.

I am curious: Was the negotiating contentious? Did you play hardball with them too hard. Please tell us about what happened in the dealership - this could be a clue about the real reason they are doing this.

I would also suggest calling your state’s consumer protection department, or some equivalent gov’t office. I would think they would be able to advise you on your rights and those of the dealership. It seems that a combination of contract law (what does your lease say about the dealer’s ability to cancel the lease if they can’t pass the financing on?) and state law (contract recision, dealership rules/laws) would both be relevant. I really wonder about the dealer’s ability to cancel this lease after the fact… It seems to me the inability to get the deal financed is the dealer’s problem, not yours. However, it really all depends on the contract and your state’s laws.

It also seems weird to me that somehow the lenders won’t accept this deal. I think they (the lenders) set the residual and the interest rate, so they are protected assuming the dealership adheres to the minimums set by the lender.

Really interested in hearing how this all turns out.

They are trying to shake you down for more money, and you can probably sue them if they repossess, according to this Michigan lawyer who does a regular podcast on auto-related laws:

There are at least two different forum members who posted in the last couple weeks who called the dealership’s bluff and did not submit to a new contract with a higher payment.

If it were me I’d call them and explain that I just went on a cross country trip. Tell them you’ll be back in a couple weeks and you’ll be happy to return the car. They’ll back down after realizing how many miles are on it.

Here for the responses. A former colleague got a decent deal on a Nissan Maxima a few months ago after trading in her car. They ended up damaging her trade and requesting the Maxima back after some issues with financing. She gave in and got a messed up car. I would’ve absolutely fought it. Especially after going through all the hoops of insurance, time and other tasks associated with buying a new car.

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Is this @CarPhan? …[20 char]

LOL Hallelujah! You just realized? He’s been relatively quite though.

“under an assignment acceptable to us”

I think that’s the key part of that sentence. They screwed something up on their end, and the deal isn’t good for them. If you have a valid signed and executed sales contract, tell them to take a hike.

Yes, I had this same situation a few months ago (see my post about it in my post history). Basically they couldn’t secure financing and wanted the car back. At the time, I was swamped with work at school and couldn’t afford to put in the time to fight it so I just handed it back. Hey, I got two weeks’ use of the car for free. Though I did get a really good lease deal on it, like I said, I couldn’t afford the time it would take to try and contest what they were saying.

I remember being told that technically the car is not sold unless financing is secured. I am not sure of the details of this but that was apparently the reasoning. Do update here on what happens as I’m really curious as well!

Some states they have an unravelling clause where they can unravel the contract for the lease and take it back because they screwed up.

Listen I wouldn’t give them the car back for several weeks just like others are saying unless they are asking you to re-sign something new. If that’s the case - I would demand them to refund the difference to you in a check between what the new contract costs and the old.

If you really like the car go to your own bank and get your own financing

Thank you for your suggestion, I will be posting more details of my transaction below.

Thanks Max.
My MF is .0006. If I am doing the math correctly the APR is .0006 x 2400 = 1.44%

Hi Tom,
The car has LoJack on it, so yes they can find it any time. Now I know why they require it on all their cars.

I did all my negotiating over email with a new young sales person that would check my request with her manager. I will post a general msg with all the details.

Thanks again!

His ISP,
Thank for the suggestions! Just to clarify why this is so crazy… I DID get financed with Kia Motors. I was talking to them on January 9th to confirm my online bill pay was set up.

So, as of right now I have a lease loan with Kia Motors until 2020.

The fact that I DID get funding and they still want the car back makes no sense.

There are a few agencies I need to call ASAP. The problem is that this is a three day weekend and no one is open.

Thanks again!

Thanks for the article. My story seems kind of the same as the guy in the article. I DID get funding for a lease loan with Kia Motors. I confirmed my on line account January 9th, 2017.

If I give them the car now, I still have a contract with Kia financial until 2020.

December 31, 2016
I did the negotiations over email. This is my first lease (because it’s an electric car). My boss told me about this site when I started educating myself about the leasing process works.

January 1st, 2017
When I did my lease contract with the financial guy, there were a few numbers that didn’t make sense that he couldn’t explain. He fixed one error I found and then told my that his computer was the “bible” or some similar description. The sales tax went from 8% to 7.75% overnight and I still think they charged me the wrong percentage.

January 10, 2017
I did have questions about Apple CarPlay, a few minor scratches, and dents in the leather. The first two items were discussed with the sales person the day of my purchase. My salesperson was young and not responsive after my purchase. After five days of no follow up, I drove to the dealership that is 30 mins away and spoke to the sales manager. He was very helpful and friendly and offered to upgrade my software for free ($30.00) and buff the car. He explained that the dents in the leather were from someone putting the seats down and that I wouldn’t be charged for it. I was totally fine with that answer.

The gentleman in the service department was great and very friendly too. He updated my software and we set an appointment for the buff for the next week.

The letter was written the same day I was at the dealership. No one said a word to me about it.

Thanks again!

Hi Bilious,
Thanks for the comment. I do have a lease contract and I DID get funded for my loan with Kia motors.

I appreciate your feedback.