7 On Your Side goes undercover to expose dealerships overcharging thousands on lease buyouts
NEW YORK (WABC) -- With used car prices doubling this year, more car owners than ever at the end of leases have been buying them out -- instead of turning them in.
But earlier this year, 7 On Your Side told you about a buyout boondoggle where dealerships overcharged customers thousands on lease buyouts.
Now Nina Pineda has the results of a two-month investigation showing a disturbing trend of how widespread this problem is.
They either clammed up or took off.
"I think that they're doing something wrong, I mean, why would you run if you were doing something right?" said Nissan car owner Taylor Brown.
Brown admits he got angry when he went to buy his end of lease Altima and the purchase price was way higher than the residual value, or predetermined price on his original contract.
At South Shore Nissan in Amityville - he was quoted a price $1,365.10 higher. And at Nissan of Westbury - a whopping $5,094.51 upcharge.
"I felt helpless, who am I going to call?" Brown said. "So, I called 7 On Your Side. "
RELATED | Area dealerships overcharging tens of thousands on car lease buyouts
Brown and 7 On Your Side went undercover at both dealerships. First was South Shore Nissan which was overcharging Brown by more than a grand -- a phantom fee not in writing on the invoice. The salesman called it a "Dealership Fee."
"Well, every dealership, they have a buyout fee for processing your lease buyout," the salesman said.
The finance manager nearby explained as Pineda asked if it was standard and every customer gets the charge.
"Yeah, like because you're taking his time, the finance guy has to deal with your paperwork," the manager said.
He called it "overhead." But moments later when Pineda asked him about these charges - he denied ever mentioning them.
"You said all the customers were charged that," Pineda said.
"I didn't say that," the manager said.
"I'm sorry you were on camera saying that," Pineda said. "You explain they're for overhead - for the sales manager."
"I have no comment," the manager said.
"It seems like pure profit for the dealer," Pineda said.
The manager then said he had nothing to say.
Our next stop was Nissan of Westbury. Brown originally got an invoice loaded with two extra fees totaling more than $4,600.
The finance manager said the $4,000 fee is standard and every customer doing a lease buyout gets charged the fee.
"So, like 60 customers paid that $4,000?" Pineda asked.
The manager said yes.
Do the math - that's $239,700 in overcharges. We caught eight Nissan dealerships in New York overcharging.
Then 10 customers vented virtually to us about overcharges. They all said the fees were something different.
Brown's invoice labeled it a "purchase fee" and they tried to squeeze him for a "Tri-State lemon law fee."
"So it's a Lemon Law fee?" Pineda asked on hidden camera.
"Correct, it's to cover our responsibility with the state," the manager said.
7 On Your Side checked with the New York Attorney General which says it has never collected "Lemon Law" fees from dealerships.
Yet back inside the dealership, the sour fee stuck.
"It's 7 On Your Side, we have a problem with these charges," Pineda said.
We went back to the finance manager. He too denied charging the fees he just explained.
"I didn't write that," he said.
"You wrote that - we have you all on camera writing this all down," Pineda said. "You said this was an 'admin fee,' this was an overhead fee. These fees are not...these are fiction. This is a deception."
In the end, the GM at South Shore claimed they weren't doing anything wrong, but both he and the finance manager at Westbury agreed to refunds.
They said that customers who were overcharged fees can come back and get a check from the dealership.
Nissan Corporation told us these dealerships can't charge these other fees that they would keep, and within a day, the dealers refunded every single customer we went to bat for -- a total of $31,500.
After our investigation, Nissan corporation also started accepting lease buyouts with no extra fees.
Taylor Brown even got a $300 discount.
"I really do appreciate it," Brown said.
How to find out if you think you've been overcharged on a lease buyout:
First - figure out the price you should pay.
Get your original lease paperwork and look for the Residual Value. Add any fees listed on your lease.
Did you owe any lease payments when you did the buyout? Add that up and it should be your vehicle price.
Next check your buyer's invoice from your buyout.
Look at the vehicle (before taxes). Compare the two. If it's different, you may have paid too much. Go back to the dealership. If they don't help, complain to 7 On Your Side AND complain to the New York Attorney General.
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