Beware of “Lease Takeover” Offers

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While checking out new cars at a dealership, a man only identified by his last name Kim ran into the floor manager who offered him a lease promotion. Kim turned down the offer as he still had three months left on his current lease contract.

Soon after, the same manager made a counteroffer to cover the remainder of his current lease. Kim was convinced and signed the contract. A month later, Kim was contacted by his “previous” lease finance business.

He was told that his lease payment has been past due. The dealer who supposedly had to take over Kim’s lease told him that he had nothing to worry about. However, after another month, Kim received a warning saying that he should now make payments for the remainder of his lease as well as a disposition cost of $1,000. Kim was able to solve the problem only after hiring a lawyer and threatening to file a lawsuit against the dealership who attempted to con him.

Consumers testing the market for new cars are now warned about dealerships that try to convince customers to concede their ongoing lease contracts, only to pretend as if the deals have never happened.

Those involved in the industry explained that such cases occur at dealerships that have recently changed general managers. Some find ways to deal with the fraudsters, but many are still opting to remain silent over concerns about ruining their credit scores.

The industry professionals advised the victims to keep such dealerships’ license numbers to report them to the California Department of Motor Vehicles.
Meanwhile, legal experts added that for such deals to work properly, the customer should include a clause in the contract about the remaining payments for his or her lease deal.

If that is not feasible, the customer is encouraged to create an additional document containing the details of the lease and get it signed by the dealership that is taking over the contract.

Kim explained that it took him almost three months to prevent further damages, during which he had to visit the dealership more than 10 times. In fact, he still shakes his head in disbelief when recalling the hassle he had to go through.

 

By Sungcheol Jin