Monday, January 20, 2020
Florida Car Dealers BOGUS Option to Purchase Your Leased Car
"PURCHASE OPTION AT END OF LEASE TERM. You have the option to purchase the Vehicle “AS IS” at the scheduled termination of this Lease, provided all sums due under this Lease have been paid by you and you notify us 15 days prior to the scheduled termination of this Lease. The price you pay will be the Residual Value (see Section 10) PLUS a purchase option fee in the amount set forth in Section 23. You will owe any official fees and taxes, documentary fees, tag or title transfer charge or fees, or other amounts charged in connection with the purchase of the Vehicle."
When you lease your new car, the salesman tells you that you have the option to purchase that car at the end of the lease. This option price is the “residual value” which is the estimated WHOLESALE value of the car at the end of the lease. Leasing companies also add a fee to this amount, typically about $350, which they say is to cover their costs of allowing you the option. It’s just more profit to the leasing company like their “lease inception fee” and “lease disposition fee”. But the good news is that this phony fee is disclosed (albeit in the fine print).
What is NOT disclosed is the added profit to the car dealer when you turn in your leased car and purchase it back from the leasing company. All car dealers in Florida (except my dealership) add as much as they want to your contractually guaranteed purchase option price. Dealers will tell you that they are adding their dealer fees, which Florida law allows; But they don’t tell you that Florida law requires this added dealer profit be INCLUDED IN THE ADVERTISED PRICE. The only indication of the price of your purchase option is shown in your lease contract and there is no mention of hidden dealer fees. In Florida, there is no limit to the size of a dealer fee, the number of dealer fees, or what the car dealer chooses to NAME his dealer fees. I know car dealers in Florida that charge more than $2,000 in dealer fees and they will add that to your lease purchase option.
I’m not an attorney, but I do have a Juris Doctor degree (JD) from the “Legal School of Hard Knocks”. I know that car dealers are agents for the leasing companies, especially when the leasing companies are owned by the car’s manufacturer. As an agent for the leasing company, dealers have a responsibility to fulfill the intended terms of the lease contract. I also know that under Common Law, all contracts must be entered in GOOD FAITH. It isn’t good faith to surprise the lessee with a $1,000+ added profit to the car dealer.
My advice to you if you’re anticipating buying your leased car, is to check with other dealers of your make to find out if one might consider waiving their dealer fees. Speak to the “higher ups” in the dealership and the leasing companies. They know what they’re doing is wrong and might waive the dealer fees. As a last resort, consult with a real attorney and ask his opinion. I believe that this practice represents a great opportunity for a class action suit against Florida car dealers and leasing companies. If you’re planning on leasing a car, make it part of the “deal” that, should you desire to exercise your lease option, you will not be charged dealer fees. The dealership will agree to that “in a heart-beat” to lease you a new car.