Fees Secretly Added to Car Lease Buyouts in Pennsylvania & Beyond

If you’re thinking about using a lease buyout option to buy a car that you have been leasing, you might want to think twice. At least, review the lease agreement twice with an attorney’s help. Consumers from Pennsylvania and a few other states have recently complained about being charged hidden, tacked-on lease buyout fees that weren’t included when the lease was originally signed.

Man Coerced to Pay $1,000 Extra for a Kia Optima

Although it is believed that extra fees have been tacked onto different vehicle leases for years now, the dealership scheme caught headlines after a man in Pennsylvania spoke up about the less-than-straightforward offer he was given by a Kia dealership. In an article published by The Philadelphia Inquirer (click here to view the full article), Benjamin Sugarman shared how he leased a Kia Optima for a few years, loved the way it drove, and decided to purchase it at the end of his lease. The deal seemed like an easy one to make because the lease agreement clearly stated that the buyout fee would be $0 and that the transaction could be completed at any Kia dealership in the state.

However, when Benjamin went to buy the car at the dealer that sold the lease in the first place, he was surprised by a $1,000 lease buyout fee that hadn’t been in the original agreement. When he asked about the fee, the dealership told him that it was what they charge, and he would have to go to another dealership if he didn’t want to pay it. The problem grew when he couldn’t find a dealership that wouldn’t charge him an extra fee, so the $1,000 fee tacked on by the original dealership ended up being the least expensive option available.

After he grew exhausted from the back-and-forth with Kia corporate and the dealerships, Benjamin ultimately accepted the $1,000 fee but began to do his own research to see if this was a wider issue than it seemed. He soon found that unfair lease buyout fees were becoming common and that some consumers had even been charged other random costs when buying out a lease, like “safety checks” that cost several hundred dollars.

Are Extra Lease Buyout Fees Legal?

To be clear, adding fees onto a lease buyout agreement that weren’t in the originally signed lease is not lawful. The Pennsylvania Attorney General’s Office has tentatively stated that such lease agreement modifications are illegal.

It is also speculated that hidden lease buyout agreements have become more common in recent years due to supply chain issues that became dramatic at the height of the COVID-19 pandemic. For a while during the pandemic, new cars were hard to find, so used car price tags went sky high. Dealerships who sold pre-pandemic leases might have been unhappy that the consumer who signed the lease could buy the car for a pre-pandemic price at the end of the lease in 2022 or 2023, for example. To try to make up the revenue difference between that cost and what the same car would cost now or during the pandemic’s height, a dishonest dealership might add a $1,000 (or more) lease buyout fee that didn’t exist on the original lease agreement.

What is Being Done About Extra Lease Buyout Fees?

The Pennsylvania Attorney General’s Office has acknowledged the unlawfulness of extra lease buyout fees that are added after-the-fact to vehicle leases, but it hasn’t said much more about what it intends to do about them. In the meantime, anyone who has bought a vehicle in Pennsylvania through a lease buyout agreement should double-check the transaction receipts for any unusual or unexplained costs. If you were charged extra and don’t know why, your next step should be talking to an attorney.

At Golomb • Spirt, P.C., our class action team is investigating reports of illegal extra fees added to vehicle lease buyout agreements throughout Pennsylvania. Based on our findings, it might be possible to start individual lawsuits against offending dealerships or use class action litigation if hundreds or thousands of consumers were all overcharged in similar ways. With more than $2 billion in verdicts and settlements, including newsworthy class action wins against major defendants like Bank of America and Daiichi Sankyo, we are trusted by clients and legal peers alike with complex, high-stakes cases. Please let us hear from you if you have any information about unlawful extra fees for vehicle lease buyout agreements, or if you lost money due to such a scheme. The more people we hear from, the stronger each case can become.

Dial (215) 278-4449 or contact us online to discuss your case with the Golomb • Spirt, P.C. class action team, headquartered in Pennsylvania but serving clients nationwide.