During the Coronavirus pandemic many people are having trouble finding a car dealership to take their car when their lease term ends.
The primary reason for this is lack of space for returned cars. The pandemic’s closure of auctions and wholesalers as well as shuttered operations for many car manufacturers means that returned leases are not being picked up from dealerships. Most car dealerships do not have much excess lot space at any given time. Plus with many dealerships operating on skeleton crews they may not have the bandwidth to prepare the paperwork and process the lease return.
This has left many lessees frustrated and feeling like they are being forced to extend their leases longer than they intended too. They cannot simply drop it off at a dealership with the keys and drive away because the proper release of liability paperwork will not have been filed with Department of Motor Vehicles.
On May 20th California Attorney General Xavier Becerra published a letter, also signed by 11 other Attorneys General, to remind car manufacturers that they are legally obligated to take back leased vehicles that are returned when their lease term has finished.
In the letter they urge car manufacturers and dealerships to:
Examine their lease-return procedures, including those of their affiliated dealerships, to confirm that policies and procedures comply with the terms of lease agreements and applicable law;
Assist consumers with prompt and convenient lease returns by providing alternative arrangements, such as home pickup or return facilitated by a third party;
Provide consumers with a clear point of contact to assist with concerns regarding the return of their leased vehicle or with issues concerning their lease;
Provide consumers who have already been harmed by these leasing practices with a process to return their vehicle; and
Refund harmed consumers any additional monthly payments incurred beyond the original leasing term and reimburse for incidental costs resulting from refused lease returns.
It is yet to be seen how automakers will assist dealerships to ensure that all customers are able to return cars in a timely manner. Dealerships have an obligation to receive them but if the rest of supply chain to return the cars to automaker’s is broken the dealerships are in basically the same situation that the original lessee was. Stuck with a car that is supposed to be handed off to someone else and unsure how to proceed.
