End of auto lease buying option

[JRPfeff]

Any car salesmen here?

I recently executed my option to buy a truck I was leasing at lease end. The day of the transaction was confusing and upon reviewing the Title today, I am even more confused.

The lease contract specified that I would pay the residual value, plus a $300 Purchase Option Fee. Nissan directed me to any Nissan Dealership to complete the transaction. At the dealer they gave me a different number for the fee of around $350 for excess interest. That didn't make sense because I was completing the transaction a couple days before the end of the lease. They also said that I must pay the dealers' Administrative/Processing Fee of $598. I protested, but had no choice if I wanted a vehicle to drive home. They also rolled the Purchase Option Fee into the purchase price on the sales contract. I protested, but it was take it or leave it.

Looking at the Title, it is starting to make sense. Nissan assigned the Title to the dealer, who sold the truck to me. Therefore, the Purchase Option Fee was rolled into the price the dealer paid to Nissan, then the dealer made a separate sale to me.

Is that how these are supposed to work? I think I was screwed out of my purchase rights in the contract.

 

[Phil Perrin]

While I've never leased a vehicle, it definitely sounds like you were taken for a ride. That sounds a lot like some common core math to me!

 

[Len Dennis]

Well, for starters you did terminate the lease early (albeit "a couple of days before the end of lease"). That's why the extra $50. As far as the "admin/proc fee", although that does seem excessive it may well be a "standard" fee for all dealers. They have to do the re-titling of the vehicle, ensure insurance is in place, required safety check (after all, they do own the vehicle till it is sold), etc. It may seem that it's a lot for preparing some documents but it is what it is. They have to pay their staff to do the work.

All dealers charge that admin fee even though you may think their profit should cover the admin end of things. Everybody is out to maximize their profit. Used to be in days gone by, there was no admin fee to write up a contract. Hasn't been that way for 20 years or more.

You didn't get screwed. Really. Cost recovery is a fact of life for business.

Regarding "title rights", I'm assuming you were paying your lease payments to Nissan Finance (or whatever name they go by in the U.S.). When you leased that vehicle, the dealer assigned that lease to Nissan Finance. When it came time to terminate the lease, they transferred back to "dealer of your choice" or in all likelihood your original dealer. Either the finance co or the dealer owned the vehicle (there are different types of leases between dealers and finance companies just as there are different types of leases between customers and dealers). You never did. You just rented it till such time as the lease terminates AND whether you decide to buy it (at a predetermined price). Processing costs are not figured into the deal during the life of the lease.That's only determined at lease end (early or otherwise).

You're fortunate they didn't charge you for excessive wear and tear or excess milage charge in addition to an "early termination" fee .

Generally speaking, you don't have a right to buy the unit at lease end. You may have to guarantee the lease end value as that is what is used to assist in calculating the montly payments (in conjunction with the aquisition value (original cost of unit). That's why I mentioned wear and tear and excess milage. Both affect the value that you guaranteed. Not all leases have that value stated. Your's did. What you had was (probably) a finance lease.

You don't have the right to buy it but you do have to guarantee what it's worth at some/any point in time. It's usually in the dealer's best interest to sell it to you rather than go through the hassle of either putting it through an auction to get rid of it or to sell it as a used vehicle to the general public.

Obviously not having seen the documentation, I am making some assumptions. YMMV.

Unless you're in business where you can write off the lease payments, it's not advisable to lease in your personal life.

 

[GGross]

I hope you enjoy the truck, I believe every time you walk into a dealership you are getting screwed so I can understand how you feel. The processing fee while I understand has been around for sometime is ridiculous.

 

[Rich Dahl]

We went down to one car and that was a mistake but my 9 year old Dodge truck would sit for weeks on end. I averaged 37 miles a month for a year with it. So we decide to get something inexpensive for those times we do need two vehicles. Found a older Toyota truck at a dealer sale, one of those where they move a herd of cars to a big parking lot and try to unload them instead of dragging them down to an auction in Phoenix.
The truck was on sale for $2100 then $190 sales tax and $595 doc fees. $90 transportation fee (whatever that is) = $875 garbage fees on a $2100 truck. Here in Arizona a private party sale there is no sales tax and all you pay is a 20 service fee and whatever the tags cost for the vehicle, total for that truck would be around $75.
So I'm now looking private party only.