One effect the coronavirus pandemic is having on car leasing companies is that many of them don’t want you to end your contract. As a result, you may see your lease extended as a “courtesy.”
The reason for this is because the economy has caused used car sales to slow to a crawl. That means automakers like Ford and General Motors are resorting to automatically lengthening car leases, according to Bloomberg.
Report: Dealerships Extend Leases Because They Don’t Want the Cars Returned
“They are not cooperating with people at the end of the lease,” money expert Clark Howard says. The problem is that it’s causing two financial burdens the customer didn’t ask for:
- Paying for additional months
- Paying for car insurance (mandatory full coverage, typically)
Furthermore, most vehicles are parked. To pay full insurance on a car you’re not driving right now is a waste of money, Clark says.
If you’ve reached the end of the lease and it’s a vehicle you don’t need, Clark suggests that you take the following three steps:
- Do NOT accept new terms: Clark is adamant that you turn down any lease extension offered to you if you don’t want one.
- Contact the auto manufacturer’s financing unit: Send an email and a letter to the official address in your lease contract. “Tell them the lease is over and you’re done with it,” Clark says.
- Charge them for storage: Tell the leasing company that you’re charging a daily storage fee for every day that they don’t accept the vehicle.
The bottom line is that you shouldn’t ever find yourself in a position where you have to pay for a vehicle or auto insurance beyond your lease if that’s not your desire.
If the leasing company tells you to drop the vehicle off somewhere but there’s no one there to accept it, Clark says to get the vehicle cleaned up and then make sure you protect yourself.
“Take a thorough video of the interior and exterior of the vehicle and take a lot of pictures,” Clark says. That way, you’ll have plenty of proof that you turned in the vehicle in good condition.