This is clearly not true. Lessees still have rights, explicit and implied.
ok well not anymore.
This rings a bell hereā¦
That would be nice but I donāt see them going through all the trouble doing that. Realistically I would assume 95% of the people that lease cars have no intention of buying it out at the end of the lease. Most of them certainly arenāt expecting to get equity out of it or even know itās possible to get equity out of it.
Even if they did want to buy their lease out they would probably do so through the originating dealership they got the car from anyways where the third party buyout rule wouldnāt even apply because it would be the manufacturers own store.
Most of the people that are super mad about this āruleā that never existed in the first place are mad at the fact that they canāt use the dealerships tax free buyout in order to make thousands of dollars on the leased vehicle that they think is theirs.
Like many have said, the lessee is still entitled to buyout the car at the residual valueā¦the problem is that once they hear they have to pay tax, wait 30-45 days for a title and then worry about having to sell it or the market values adjusting they are going to just forget about it.
They would rather the dealer take that risk while they laugh to the bank lol
Letās slow this down before it gets to the point where it needs to be locked.
Not really sure whatās the point of arguing with someone in an entrenched position with no interest in hearing what you have to say but Iāll make just one attempt:
No bank wants to be sued for failing its fiduciary duties to its shareholders. Selling assets below fair market value would be a pretty big failure of that duty.
The lessee (and only the lessee) has an option to buy the car at RV and that may be below FMV but thatās the only instance where the contract ties the bankās hands.
The stock options analogy does not hold water because the lesseeās purchase option cannot be traded, sold or assigned to another party.
Off topic but, as someone on their HOA board, the specifics matter. If the rule hadnāt been enforced in 10 yrs, but I assume the Board would have to give written notice that it plans to start enforcing the rule in, say, 30 or 60 days from the notice. I assume that would be fine (since, at least in California, only a 30-day comment period is required for new rules).
If the Board tried to start enforcing the rule, say, the very next day, then, no, I imagine that would not be allowable.
California law is also very much tilted in terms of requiring Boards to be pretty transparent in how they operate.
To bring it back on topic, are the banks giving some sort of grace period in terms of when the no-3rd-party-buyout starts? Is any such notification period required by the contract?
Exactly. If itās that beneficial to buy/sell itās still possible to take out a low-interest loan and pay it off immediately, or of course use cash.
Just an extra step. The average customer is only going to be doing this once every three years if at all and they should be able to get approved for financing if they were able to lease the car in the first place.
Yeah, the better analogy here is buying a house with a note is like financing a car with a note. Big difference between simple financing and renting.
This is correct, they have the contractual rights set forth in the lease agreement, as well as those set forth by relevant statute and common law.
The problem isnāt the extra step, or for me in Virginia even the taxes - I have already paid those. Itās the time it will take for me to get the title so I can sell the car. This is the simple solution but it involves elevated levels of risk since you have to hold the asset for some period while the paperwork is completed
This reminds me of when companies back in the late 90s early 2000s used to deny the internet existed. They can deny the Carvanaās, carmax, etc exist but their actions will drive them out of business. Adapt or die thats why Nissan wonāt be around much longer with moves like this. They are panic moves because they have no plan. Gm needed a bail out and bmw well they just keep making Their cars uglier that no one will want them soon. Itās basically just a dkkkk move. Just because you can do something doesnāt mean you should. Long term this will be a disaster. The average bmw buyer wonāt probably care they donāt know what they are signing anyway, but some who want out after a year and a half to buy something else will.
Like you pointed out, sooner or later all brands will start doing this. So what is your option going forward: ditch car and switch to bus/train/motorcycle? Tesla doesnāt allow lease buyout and no one complaining. Holding grudge against them doesnāt give any you benefit, suck it in and move on. Itās a free market after all, and they didnāt violate any term of the lease contract, the car is not yours.
If I was a car dealer, I would rather sell 100 cars per month at 5% below MSRP than 5-10 cars at $5k-$10K over MSRP.
Apparently the answer is ābuyā, not āleaseā.
If Mazda is the only brand allowing third party buyouts, then I guess Iām ditching my X6 for a CX-5. Mazda will earn my business
We can debate the legal all day and you are right itās their car but the optics and not letting anyone know prior like hey just an FYI after 5/10/2021 you are stuck in your lease until the end so if you have any plans to rid of it do it now But they didnāt they could have even sent something out as many do bring your lease in now and well match the payment on a new one. Itās the act of desperate businesses with no strategy or vision. Sad really as a collector of many z cars. Bring back Datsun
The heart of the problem is people wanting to avoid paying taxes when flipping their lease for a profit. This is a state government issue not the oems issue. The oems are for profit businesses so I am not sure why you would expect them to look out for your best interest. Remember, they tried to take you to the cleaners when you leased your car. Why would they want to give you back money at any point of the lease?
Are the majority of leasees even aware that a 3rd party buyout is an option? I mean, clearly enough people know that the banks are making it more complicated, but I actually assume most people donāt know (and thus no harm comes to the brand for doing this).
Mazda leases are handled through Toyota Financial, so Iād imagine any buy out rules that apply to Toyota also apply to mazdas.
GM officially announced it a week or so ago that it would start 7/1 internally. They decided to enforce it early as of Monday this week.
Iām not really concerned with the temporary market condition of positive lease equity (Volvo lessee), but I am concerned for consumers who due to a change in circumstances need to get out of a lease early. Limiting the consumer to a very small segment of the used car market (franchise dealers) to get out of the lease will make a bad situation even worse. A somebody with negative equity at free market trade-in rates is going to be even more underwater if a dealer knows they have very limited options to get out of the lease. (Think non-metropolis)
Iād like it fixed at the state tax level rather than non-contractual bank policies. If there was an easier to use version of Californiaās 10-day no sales tax law, then 3rd party dealers could handle the lease buyout for the customer and deal with the sales tax waver. Itās really the stateās tax laws that are allowing leasing companies to do this.
While yes I understand itās the bankās car, I believe in most years these policies will result in demonstrated consumer harm. Itās in the stateās interest to protect the consumer in cases like this.
CFPB affirms lessees have no right to trade or assign their purchase option to a third party.
That appears to be nmac affirming that, not cfpb.
I drafted something.
Dear Lessee:
FYI, a number of our customers have been enriching themselves by exploiting our overly-generous policies regarding what we currently allow them to do with our property.
If you want to get in line and take money that isnāt yours, you need to act quickly before we plug this gigantic hole in a couple of weeks.
We honestly donāt know what we were thinking, but our loss is your gainā¦ but not forever.
DONāT WAIT!
Love,
Lessor