Vehicle Lease Return Process: Consumer Point Of View
Dealers will usually allow enough time for consumers to do a detailed analysis of the lease terms so that consumers can assess whether they have the capacity to pay for the lease cost at the vehicle return time. Some consumers are not able to make good decisions on matters such as selecting the right mileage, whether to return the vehicle or to purchase it, and whether to enter new leases when they return vehicles from a previous lease. Consumers can reduce the cost of leasing when they return leased vehicles by having the vehicle thoroughly cleaned and vacuumed, engaging a third party garage to fix any damages on the vehicle, and replacing tires before they return leased vehicles.
What Works Well?
- According to Consumer Reports, lessees have the option of carefully studying lease terms to ensure they get value for their money.
- Detailed analysis of the lease terms enables the consumer to assess whether he has the capacity to pay for the cost at the end of the lease. Consumers will beware of all the penalties leasing companies charge for violation of the lease terms, such as excess mileage.
What does Not Work Well?
- In some cases, consumers do not understand how to select the right mileage at the time of leasing and end up either paying for unused mileage or paying penalties for exceeded mileage.
- Some consumers do not know whether it is more prudent to return the vehicle or to purchase it and they end up making costly decisions.
- Some dealers entice consumers to enter new leases when they return vehicles from a previous lease and sometimes consumers accept new leases without proper consideration of the implications.
- Real Car Tips provides a list of common auto leasing scams and tricks that consumers are likely to face in this industry and these scams and tricks increase the cost of leasing at the vehicle return time.
- Common scams include increasing the price of the vehicle, lying about the interest rates, and increasing the lease period. All these scams increase the cost of leasing at the vehicle lease return point.
- Car leasing tricks include high early lease termination penalties and excluding down payment, acquisition, and security deposit fees made by the consumer when calculating cost at the vehicle lease return time.
How to Reduce Lease Costs
- Consumer Reports suggests various options that consumers have for reducing the cost of leasing when they return leased vehicles, including having the vehicle thoroughly cleaned and vacuumed, engaging a third party garage to fix any damages on the vehicle, and replacing tires.
- Other cost-saving measures listed by Consumer Reports indicate that consumers should ensure that forgiven end-of-lease charges are not moved to the next lease, they should recover any security deposits they made at the start of the lease agreement, and that they should liaise with companies like Lease Trader in the event they want to end the lease prematurely.
Vehicle Lease Return Process: Dealer Point Of View
Some dealers provide for lessees to purchase leased vehicles at the end of the lease period and organize financing for the purchase. Other dealers charge lessees for the inspections done by third parties during lease returns but they (dealers) do not disclose to lessees the cost of the repairs. About 1.8 million leased vehicles were due for return between March and July this year and dealers are not clear on the safest way to effect the vehicle lease return during the COVID-19 pandemic.
What Works Well
- According to Galpin Ford, its lease terms provide for the lessee to purchase the vehicle at the end of the lease period and Galpin can organize financing for the purchase.
- Galpin‘s customers who wish to purchase lease vehicles at the end of the lease period can request for Ford financing online and the company provides financing for customers with all manner of credit history, including bad credit and no credit.
What Does Not Work Well
- MotorBiscuit highlights the various options lessees have when returning leased vehicles to dealers, including returning the car, buying the car, selling the car, and trading it for a new model.
- According to Motor Biscuit, most dealers will hire a third party to inspect vehicles returned after the lease to determine the extent of wear, tear, damages and scratches.
- The dealers will then charge the lessee for the issues raised by the inspector but they (dealers) do not disclose to lessees the cost of the repairs. This non-disclosure provides an opportunity for the dealers to overcharge lessees.
The COVID-19 Pain Point
- Strong Automotive reported that dealers in the US were having a difficult time in receiving vehicles whose leases had expired due to the COVID-19 pandemic.
- Strong Automotive estimates show that about 1.8 million leased vehicles were due for return between March and July this year and dealers are not clear on the safest way to effect the vehicle lease return during the COVID-19 pandemic.
- Knauz Autopark, for example, highlights the challenges it was facing with lease returns during the COVID-19 pandemic and calls upon its customers to be patient as the company adheres to the guidelines provided by CDC.
- Knauz Autopark is testing an approach where customers will only visit their shops by appointment only to enable the company maintain social distancing, including vehicle lease returns.
- Strong Automotive highlights some ways dealers can manage off-lease vehicle returns occasioned by the COVID-19 pandemic, including re-examining lease return procedures and providing specific contacts through whom customers can return vehicles.
Vehicle Lease Return Process: OEM Point Of View
Ford’s customers have several options for returning leased vehicles, including to the originating dealer, to the nearest dealer, or contacting Ford’s customer care. Reviews indicate that there is poor coordination of information and services between the company and its dealers and this sometimes causes frustration to Ford’s customers. The company plans to enhance customer experience by assigning a team of personal lease assistants to each customer and digitizing the entire vehicle lease process.
Ford’s Lease Return Process
What Works Well
- Ford provides a comprehensive checklist that makes it easy for the lessee to understand the things to consider prior to returning the vehicle.
- The company provides lessees with several vehicle return options, including returning via the originating dealer, returning to the nearest dealer, or contacting Ford’s customer care.
- Ford provides auto technicians to assist lessees to do any repairs on the leased vehicles prior to return.
What Does Not Work Well
- According to reviews by Better Business Bureau, Ford’s vehicle lease billing system does not always work accurately and this has caused some lessees to lose money.
- Better Business Bureau highlights the case of a Ford client who leased a Ford F150 truck in 2015 and despite having made all the required payments, Ford still required him to pay another $6800.
- Ford acknowledges that it has lost some customers due to challenges in its lease-end process and the company had to seek ways to reduce customer churn.
- According to Automotive News, there is poor coordination of information and services between the company and its dealers and this sometimes causes frustration to some customers.
- Ford Credit‘s director of customer experience, Krista Conyers, highlights some changes the company plans to undertake in order to improve customers’ lease-end experience.
- The proposed measures include assigning a team of personal lease assistants to each customer and digitizing the entire vehicle lease process.
- The company created a personal web page for its lease customers in 2017 and the web page provides information to customers on issues such as when the lease agreement ends, mileage, and excess wear-and-use standards.
Vehicle Lease Return Process: Lender Point Of View
Some auto lenders provide free pre-inspection services and avail inspectors to conduct inspections from lessee’s home. Other auto lenders do not have any discounts at vehicle lease return time for special consumers, such as military personnel, college graduates, repeat customers, and first responders. At the end of the lease period, today’s consumer expects a vehicle lease return process that is highly digitized.
What Works Well?
- Jaguar Financial Group indicates that lessees can notify the company at least 45 days to the day of vehicle lease return to have the leased vehicle pre-inspected free of charge. Jaguar Financial Group says it can organize for an inspector to conduct the inspection from the lessee’s home.
- After the pre-inspection, the lessee will receive a link to a digital report that shows the wear state of the vehicle. Lessees have the option of making a single-pay lease and they will not need to make any payments except for charges that may arise
What Does Not Work Well?
- Jaguar Financial Group does not offer any special discounts at vehicle lease return time, including military, college graduates, repeat customers, and first responders.
COVID-19 Pain Point
- USA Today reported that the COVID-19 pandemic had caused an economic strain on the auto industry making it hard for auto lenders to operate normally.
- Auto lenders were asking lessees not to return vehicles whose leases had expired but instead get lease extensions in an attempt to reduce the risk of coronavirus infections.
- Today’s consumer goes after companies that provide paperless experience and that are able to remove dealers from the vehicle lease process, including vehicle lease returns.
- Consumers want a lease process, including vehicle lease return that enables them to digitally view cars, make secure applications, and receive feedback in the shortest time. At the end of the lease period, today’s consumer expects a vehicle lease return process that is highly digitized.
- Richard Frunzi of Auto Dealer Today indicates that his company has installed vehicle lease technology that enables lessees to manage the entire vehicle lease process, including vehicle lease return online.