Nobody said that it did. What I said was that I remember the dealerships who have made things like that easy for me to do and I make a point of giving them an opportunity to earn my business in the future. I also remember the ones that made them difficult and I make sure to let others know that too. When you said that you were going to give me a peek behind the curtain I was hopeful that you were going to let me know how your dealer’s franchise agreement treats lease returns but you avoided that part of what I said.
Yeah, I think some people think the lease disposition fee is shared with the dealership that takes the car in to then hold and process paperwork. But the dealership gets almost nothing if the lease return doesn’t result in a sale.
That’s why the Hendrick BMW dealer near me initially didn’t want my i4 return… it wasn’t worth it to them to take into inventory to try and sell as used. But they got to take some labor hours on some warranty/recall work so I guess that was enough.
But hold up - it is not usually the sales guys who are grounding these cars. Sales folks should be happy to get customers in for grounding, not that different than having folks in the service bay.
I get that this is a problem for the GM and the used car SM to some extent (they can just send them to auction if they dont want them).
So agreed this is not all that beneficial or profitable for the dealer in the short term, but surely is in the long term. The same way that they dont want the brand to fuck up the marketing or get into some scandal. So why would a dealer give a customer a bad experience of the brand makes no sense.
Edit: Meant to include that it is typically the service side that does the grounding. And the SA (at least in some brands) benefit from finding issues and charging for work either the customer or the OEM. Its weird they dont want the potential upside
BMWFS provides the list of lessees in a geographic zone to dealerships so they can market promos and incentives for lease end. Marketing paired with BDR outbound is intended to get someone excited to buy a new BMW and call into the showroom to discuss or at least respond to an email.
If the lead goes cold, there won’t be a sales person involved, so there is no one to “be happy” that a customer is in for grounding.
The ONLY benefit from a dealer perspective is Recalls.
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The dealer gets an opportunity to add inventory to their lot. Whether they actually want that inventory is another situation which is why they have the option of punting and the car just goes to auction. While I’m not privy to what goes on behind the scenes, the entire process does not seem particularly labor intensive. It usually involves a simple form and an odometer reading. We’re not exactly talking about putting anyone out here. I’m all for a different system of doing this but I the argument of “I don’t get paid to do this” doesn’t hold water for me when the franchise agreement that a dealer signs makes it clear that this is something that is part of how you are supposed to do business and get paid.
Send them to auction? We don’t own lease returns. They get sent back to the OEM
Back to the bank you mean? They are the one who owns them at that point. I get it’s all kind of the same but it is a distinction.
The dealer can technically buy it out at the resid, but for EVs there is 0% chance they have equity to be worthwhile to claim for used inventory.
@ElectricEliminator the franchise agreements that I’m aware of do require the dealership to accept lease returns. Maybe @Bumboola has seen one that expressly describes a dealer having to process lease returns, but I’ve never seen one with that type of language.
Getting some dealers to install an EV charging station was taken to the courts. This stuff is brutal and often non-sensical.
correct the bank. I keep forgetting that some brands like volvo are 90+% captive as are Kia, but brands like Jeep are all over the place
That distinction matters even more in the event that it’s a 3rd party bank like BoA for Lucid or Chase for Rivian.
I don’t know if you’re going to see one that specifically spells out “take our customer’s leased cars back” but here is a piece of a GM Franchise agreement that specifically says take care of the customer, regardless of where they got their car from.
Check the definitions of that document for “service”.
IIRC Taking a lease return isn’t considered “service”. The automakers and their franchise agreements are super-old… “service” was typically contemplated as repairs, maintenance, and other recurring activities to help a vehicle to be operational.
Recently returned my 13 month ioniq 5 lease to Carson Hyundai which was not the dealer I bought it from . I called the same day and they didnt even ask where I bought it from. Huntington Beach Hyundai was also ok to return to them.
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That’s different from my experience. My initial call was to service department and they punted it back to sales. Probably because sales would be the ones to follow up should lessee decide to buy-out.
FYR, this is the exact wording on the Hyundai lease agreement:
Unless you purchase the Vehicle, you must return it to us or the authorized Hyundai dealer (or other designee) we designate at the time and place we specify, at your expense, upon termination of this Lease.
In this case “we” would be HMF.
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It most certainly falls under “Customer Satisfaction” and the end of lease process is most certainly a part of the “purchase and ownership experience”.
If you are in norcal, ask the hyundai in san bruno, and san jose capital one. I was able to return there, I would call and say you wanted to do the lease return, and wanted to looking at options for a new lease.
I couldn’t even get GM to care when that one dealer took/cashed my Supplier/Friend code even though they switched pricing on me. I don’t think that dealer or GM knows how to enforce 5.3.
You are right, at that point its too late - most of the time but not always. I cant be the only idiot that does not have a car lined up before my current one goes back. And if you are in that spot, you have very high chance of making a sale.
At least for BMW - they set the pre-inspection to be done by the dealer. Thats def an opportunity to sell and the dealer gets a look at what work may need to get done, etc.
Also, the grounding dealer was able to buy it for significantly less than the customer (doh) and in some cases they had discounted CPO fees. Often it was better than they could buy it at the BMW dealer only auction. At least in the past, it was good enough that you could get extra discount on the sale price of a new vehicle if you committed to grounding it with them.
Definitely a dealer will do whats best for them. This is on Hyundai on not having the right incentives and structure in place. Or they are too weak so a dealer in a specific region is making decisions that are counter to the brand value and they lack enforcement teeth.