7 On Your Side: How to avoid car lease buy-out 'rip-offs'

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Saturday, January 8, 2022
How to avoid car lease buy-out 'rip-offs'
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With new cars in short supply, and the price of used cars are hitting all-time highs, it is more than $29,000 for a preowned vehicle now.

NEW YORK (WABC) -- With new cars in short supply and prices for used cars hitting all-time highs more people are buying their leased cars instead of turning them in.

The average price for a pre-owned vehicle right now is more than $29,000, an increase of a whopping 39%.

7 On Your Side has learned about a common deception used by dealerships after car owners say they were ripped off for thousands of dollars when they bought out their leases.

Anton Shipman and Keri Cromer have something costly in common, both bought their end-of-lease cars and were over-charged thousands by their dealerships.

"It can't be right, it just doesn't add up," Cromer said.

The lease on her son Michael's Sentra was about to end. All he had to do was go to the dealership and process the paperwork.

"I think really they're just trying to make easy money off people who were uninformed and for me it was my first time dealing with a car dealership," Michael Cromer said.

Keri said she knew something was wrong when he brought the documents home. The lease buy-out price was pumped up, mysteriously, more than $3,200, so Keri disputed it with the dealership.

"He said I understand there's a discrepancy, I said it's not really a discrepancy, it's a rip-off," she said.

Keri said the manager called it a dealer charge, a phantom fee not listed on the invoice.

"He said sometimes people notice it, sometimes they catch it, sometimes they don't," she said.

When buying out a car lease, the price is not negotiable. It's fact in writing on the original lease agreement called the "residual value."

Shipman says his dealership also tried bumping his buy-out more than $3,000 calling it a "processing fee."

"He started at over $2,000 and then he went to $1,600, then he went to a $1,000 all because I told him I'm on the phone with corporate," he said.

Eventually, he settled, getting overcharged nearly $1,100.

"I was surrendering then, but the war wasn't over," Shipman said.

Both customers took their battles to 7 On Your Side.

We called Keri's dealership for an explanation, which apologized, promising to do an internal audit of their recent lease buyouts, and gave the mother and son a new deal, chopping $3,219 off the cost.

"It's justice, we got justice," Keri Cromer said.

Shipman's dealers never responded to 7 On Your Side, but instead, quickly cut him a check and he got back $1,500.

The customers saved a combined $4,298.

Remember all fees charged must be listed on the invoice. Dealers can't charge a phantom processing or dealership fee.

If you recently did a buyout and the numbers don't add up, dispute it, and if that doesn't work, contact 7 On Your Side.

Want to figure out how much you'll owe when buying out your lease? Check out this calculator:


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