Lease Buy Out

bborgia

Due to the lack of supply of new cars and trucks, I am buying my car now that the lease expires at the end of the month. I got a quote from the dealer which adds on $1,000 as a "processing fee" to my residual value. They said it is their cost to "refinance" my Highlander which they want to do through Toyota Financial Services. Is this negotiable? I don't remember paying this when I bought out my 2012 Toyota and they replied with, "Yes, our dealership added this fee a couple of years ago."

kyfdx

bborgia said:

Due to the lack of supply of new cars and trucks, I am buying my car now that the lease expires at the end of the month. I got a quote from the dealer which adds on $1,000 as a "processing fee" to my residual value. They said it is their cost to "refinance" my Highlander which they want to do through Toyota Financial Services. Is this negotiable? I don't remember paying this when I bought out my 2012 Toyota and they replied with, "Yes, our dealership added this fee a couple of years ago."

Will TFS let you buy the car from them, directly?

bborgia

TFS directed me to contact the dealership. I tried to call them to ask about this and it is a 1.5 hour wait time on the phone (posted something on their Facebook page). Seems strange that the dealership admitted they added this in about two years ago (I got my lease 3 years ago - and there is nothing in my lease agreement about a processing fee being one of the buyout costs).

kyfdx

bborgia said:

TFS directed me to contact the dealership. I tried to call them to ask about this and it is a 1.5 hour wait time on the phone (posted something on their Facebook page). Seems strange that the dealership admitted they added this in about two years ago (I got my lease 3 years ago - and there is nothing in my lease agreement about a processing fee being one of the buyout costs).

I'd think you could shop other Toyota dealers, to see if you can get a better deal. No reason you have to go back to the selling dealer, I don't think. That's a rip-off, though it may be hard to get around it.

bborgia

I reached out to another dealer and am trying that now. Also reached out to a friend of mine who is a GM for a dealership (not Toyota) to see if he can shed any light on this business practice.

kyfdx

bborgia said:

I reached out to another dealer and am trying that now. Also reached out to a friend of mine who is a GM for a dealership (not Toyota) to see if he can shed any light on this business practice.

Some captive lease companies require you to go through a dealer for the buyout. (VW is another one that comes to mind). Generally, the dealers see it as a profit opportunity.

Other banks (Honda, BMW) allow you to purchase directly from the bank, which is as it should be. And, what you are doing, anyway. The local dealer has no ownership interest in the vehicle.