After you have spoken to your dealership or auto finance company about purchasing your leased vehicle and received a lease purchase quote, you might notice some surprise or hidden fees that raise the purchase price above what you expected. These surprise fees could be illegal.
To determine if those fees are appropriate and permitted by the Consumer Leasing Act (the “CLA”), here are some steps you can take to investigate:
- Check your lease. Your lease agreement should include two separate clauses dedicated to purchasing your leased vehicle: one for purchasing your vehicle at the end of the lease, and one for purchasing your vehicle before the lease has concluded. Those paragraphs should provide you with the cost of the lease purchase, as well as the types of fees that may be charged along with that purchase price. Often, those paragraphs state that lease purchase will have a specific price, plus “required taxes and fees” or “taxes and fees required by law.” It may also provide a specific lease purchase fee, and if that’s in the original lease, your dealer may charge that specific fee.
- Ask the dealer about each fee. The dealership representative you obtain the lease purchase quote from should be able to explain each and every fee in its quote. For example, taxes are required by law, and “Electronic Filing Fees” and “Tag/Title” fees might be required by law, but “Dealer Fees” or “Lease Purchase” fees are not. Other common fees include “inspection” fees or “reconditioning” fees. You should challenge the dealer to explain why each of these fees is required, and what their purpose is.
- Confirm if those fees are optional. Your dealership may propose additional fees on your lease purchase transaction in exchange for added benefits, and this is not likely to be a violation of the CLA. For example, if your dealership offers an extended warranty or service package along with the lease purchase transaction, and you should confirm whether you can purchase the vehicle without being charged those fees. The dealership may strongly encourage you to pay those fees, but it is unlikely to violate the CLA unless those fees are “required” by the dealership.
After following this process, if you identify any fees that are (1) not in the lease; (2) not required by law; and (3) not optional, the dealership’s attempt to impose those fees may be a violation of the CLA. If you have been quoted illegal or unexpected dealer fees or other purchase fees that are not covered in your lease, do not hesitate to contact us at info@pkglegal.com or at (561) 726-8444 for a free evaluation of your claim.