Shady Lending Practices. VW financial

Learned a new loophole that VW FINANCIAL is doing to make even more of a profit.

Online they showed me a quote of $27,025.14. As a pay-off quote.

Sent my car to Caravana with that quote and got back a dealer pay-off quote through them of $30,703.

That’s a $3700 difference! That’s nuts and should be illegal. Or at least clearly identified at the time of signing.

Basically, they guarantee a profit in their calculations by residual value swings.

Fortunately, I have an extra $30k in my account I’m using to now pay off the car myself to save the $3700.

But if you are on a tight budget, make sure before you upgrade your car to have the dealer call and get a quote as it will be higher.

Many banks charge more to 3rd party dealers. There’s nothing shady or illegal about it. It’s their asset and they’re under no obligation to sell it to anyone they don’t want to, much less for under market value, other than to you personally.

Remember that if you buy out the vehicle with the intent of reselling it, you’re required to pay sales tax on your purchase in most cases.


Consider checking your local VW/Audi dealerships.
They don’t “market adjust” for their dealers.

You could payoff the car yourself and resell to Carvana. However you have to deal with the bottleneck of your DMV producing the title back to VWFS then to you in a timely matter before your Carvana offer expires.

The quote to you is based on your contract with them at the time of the lease, the quote to carvana is what they are willing to sell it for to a 3rd party as that part is not dictated by the contract.

I don’t see the issue with what they did, and frankly the title of the thread should probably be changed to Today I learned that owner of the vehicle can dictate the sale price of said vehicle

Yea… figured that out its the same thing as if I were to buy it myself it is tying up $27K + now I have to pay title registration which ends up being almost the same thing.

Also “shady Lending” is relative. As to me nowhere on the site does it inform the buyer that this pay-off quote is for consumers, and 3rd party will be higher.

When I called the rep she couldn’t answer the question and simply was hiding behind the facts stating you need to talk to Carvana about the extra fees. NO (REP), just say it, VW financial charges MORE for 3rd parties than consumers. You are welcome to pay it off at the lower value yourself. But we charge more to third parties.

All I am saying is consumers make decisions based on facts, if the facts don’t have the correct information that is misleading us. This is a huge violation in the TILA. But I am sure there’s a loophole behind it.

Either way, I searched and there are about a thousand topics on this. I am paying the difference and sucking it up as a loss. Hopefully, the next person sees this and is able to learn the difference and make a proper financial decision.

Cheers! happy leasing.


I’d be willing to bet that if you look at your lease contract it will specifically state that the purchase option is for you to execute.


Seems pretty clear that the payoff is for YOU, it states it clearly multiple times. No where does it state this payoff is applicable to a third party. Keep in mind, with a lease, it’s not your asset to control, you do not own this vehicle, you are renting it. Your lease contract gives you very narrow rights and that’s it.

not gonna argue with you, you are “technically” right… I’m over it. Leaving this post up to help the next person that isn’t aware of technicalities.

Discussed several times here and this is a practice done by many lenders. They basically do not want to leave any money on the table as the “owner” of their asset in a resale situation.

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Not shady at all.
You are using a loophole where you are selling a car you don’t own.
A lot of lenders ‘let people’ do this, but some charge fees.
Remember, it’s not your car, it’s their car.
So you are doing the ‘shady’ so that you can save some money.

Now a current debate here is that Honda charges a Disposition fee unless you buy the car, then they charge a ‘Lease End Fee’ which is the same price as the Disposition fee and is not mentioned in the documentation. That’s shady.

Actually I read it as, we don’t have the staff to handle these, loopholes. So we are not going to lose money on them, and will charge extra $$$ to help cover the cost of dealing with these 3rd parties.


It is actually, it’s just poorly titled. They list it as a “Turn-In Fee” that is charged if you don’t personally purchase the vehicle. Selling to a 3rd party is not you purchasing the vehicle, ergo it is within the letter of the contract.

I remember they saying that people who bought the car was charged it as well.

I seem to only recall seeing it in reference to dealer buy outs. If they charge it when you buy it out yourself, that’s definitely grounds for fighting.

I just finished a VW lease and to be honest they are the biggest headache to deal with. They were only $1k higher on the buyout for my Tiguan when I traded it end at the end of the lease which is about break even considering disposition and wear/tear costs were avoided.

They told me they could not even quote me the dealer buyout price after waiting on hold for an hour. Eventually they did fax it over to my dealer and my dealer sent a check for the amount they asked for. A week later I get a notice from VW that I am delinquent on payments because they thought they sent a higher number than they did. I provided the fax from my dealer and all was sorted, but had I not reached out to my old dealer and just paid the “unpaid balance” VW probably would’ve just pocketed my money. Never leasing from them again.

Having dealt with this myself, I do agree this isn’t shady or illegal, but it is unfair, frustrating, not consumer-friendly and opaque.

I do agree VW Credit should do a better job making a point that the payoff is just for the consumer and that a dealer / 3rd party payoff needs to be obtained by the dealer contacting VWC directly. Even then, the dealer needs to provide the exact mileage (thus allowing VWC to ask a higher price due to YOUR lower than contract miles) and VWC will INSIST on provide the payoff via fax… FAX!! If the dealer insists, they’ll provide it over the phone after they ‘check with the payoff team’. Don’t ask me how I know that.

In an ideal world, VWC should be a bit more transparent and allow the consumer to obtain both their own payoff as well as the dealer-facing payoff, thus allowing said consumer to make a more informed decision regarding whether to sell to a 3rd party, buy it themselves or stay on course with the lease. This likely isn’t their motivation, but it would be a more consumer-oriented path. Just 1 person’s opinion here.

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I wouldn’t call it shady, but it is not “consumer friendly” and isn’t going to generate much loyalty to the brand.

I’m selling my Subaru’s this week to a third party…their (Chase lender) payoff is actually a few dollars less than mine.

I’ve bought a bunch of Subarus, and find they are one of the best car companies I’ve dealt with across the board…purchasing, servicing and customer relations.

Two things can be true:

  1. It’s technically correct that the only thing in the contract is your buyout price
  2. Intentionally not making the other scenario explicit is anti-consumer

Realistically, what they’re going to have to solve for is either:

  1. Deliver value. When the price of the vehicle in the market ‘crosses over’ the consumer buyout price, they should be actively engaging the consumer to get them into a new lease on great terms. Increase the ‘renewal rate.’ No reason someone can’t start leasing a Jetta and evolve their way through to loaded Atlas or Arteon based on life choices.

  2. Value extraction. Stay the course, have some percentage of their buyers enter the final few months of their contract having already decided to not do business with this approach.

I suspect the finest minds are squirreled away in a basement in Germany crunching the numbers on both - if we keep the payments coming for say the last 6 months across customers who don’t renew vs extending the lifetime value of those customers.

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What’s shady is calling someone else shady when they won’t honor terms that you invented in your head.


“Fees” are mostly profit and being a separate line item in contracts, they are used to make the monthly payment “cheaper” by pricing professionals in general. I would prefer them to be rolled in, especially in this case because no matter what you do in the contract, it ends up being the same. A smart buyer should always look at effective cost of his lease to understand what he is signing for and educate himself about relatively common scenarios such as selling to a third party.

in this scenario of flipping to carvana, will you have to cover taxes as well as title/registration or is it waived until later?