We see comments like the above a lot. It’s not stupid and it’s not arbitrary.
Basically, banks and publicly traded companies have a duty to not do stupid things that are detrimental to the interests of their shareholders. Selling assets below fair market value is one of those stupid things.
“Why should they care who pays them?” They don’t. They don’t care who pays FMV, they just care that they got FMV. The only reason YOU (and only you) can buy the car at RV is because the original contract tied their hands, and they are obligated to allow you (and only you) to exercise your contractual option to buy the car at RV, even though it may be below FMV.
This was never an issue before, because FMV>RV used to almost never happen before the pandemic.
Banks are changing their practices before this issue appears on the radar of these guys:
No one is stopping you from buying it out at RV, but you’ll likely have to pay taxes, making it not worth it.
As others have said, it’s not your asset to sell. Some banks are nice and allow third parties to buyout for the same buyout as the owner, some don’t. That is, quite literally, the free market working and setting prices.
Just because you wound up with a USBank lease and are all upset doesn’t mean it isn’t a free market. (I kid, sort of)
Imo the captive should be forced to offer on contract either a lease transfer policy or 3rd party buyout, for example Ford’s cab east llc doesn’t allow 3rd party buyouts but they do allow transfers, a counter to that would be Chrysler cap which doesn’t allow transfers but does allow 3rd party buyouts.
Technically the bank owns your financed car but you can go shop it around, I haven’t dealt with a captive that doesn’t allow transfers or 3rd party buyouts, but I wouldn’t deal with one.
The benefit to leasing imo is the ability to move in and out of many vehicles.
Seems like you’ve solved the issue there. If you don’t like it, don’t use it. Having someone force the bank into doing something they don’t want to is very different than saying “I think banks should do x”
You can always buy it and then sell it, putting you in the same situation as if you financed it.
I get the benefit of working with a bank that offers transfers/3rd party buy outs. If you don’t want to work with a bank that doesn’t offer those things, don’t.
Right, maybe bent over a barrel is a better term, paying taxes on selling price for most states and then trying to sell/trade the vehicle all over again is a bunch of hoops to go through.
Yeah my point was that most banks make it easy, at the end of the day it’s all about ease of use for me at least, transfers really make life easy.
No I get it, but majority of 3p’s give “f*** all” for high performance cars so it hasn’t affected me yet but I do understand what you’re getting at and how it would change the market, I’m just stating my own experience.
Every lease contract has it’s own rules. But you always options how to end your part of the agreement.
So as long as you follow the agreement. You are free to do what works best for you. If it’s to buyout the car through a 3rd party, transfer the lease or get stuck with the lease. They are all valid option.
The other side in the agreement has to follow the same rules.
