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Auto dealers accused of not taking back expired auto leases; Attorney General Becerra demands answers

ByRandall YIp KGO logo
Thursday, May 28, 2020
Lease holders say they're stuck with expired leases that car dealers won't take back
30 percent of all cars are leased, but those drivers are now running into road blocks when returning those cars to the dealership.

REDWOOD CITY, Calif. (KGO) -- The pandemic is causing some unexpected headaches for many who lease vehicles. Even after the lease expires, many manufacturers don't want to take those vehicles back.

Ken Kajikawa's three-year lease on this Infiniti expires in a few weeks.

"Oh my gosh. What a complete headache," said Kajikawa.

Victor Kliorin's lease on a Volkswagen ran out last month.

"They told me, 'oh, we're closed. So we're not seeing any clients,'" Kliorin said.

Both say dealerships would only see them if they extended their lease or wanted to buy a new car.

"I said I don't understand. It's my responsibility to pay you for this lease vehicle," Kajikawa said. "I would think your obligation would be to take the vehicle back, at which point they said 'No.'"

State Attorney General Xavier Becerra, along with nearly one dozen attorneys general, doesn't think their problem is unique.

They recently sent a letter to 10 major auto manufacturers accusing them of "predatory and harmful practices."

The coalition urged them to comply with the terms of the lease agreement and refund any additional payments beyond the lease terms.

"So I was surprised, but not much surprised, considering we're in an economic calamity," said Kliorin.

"Nobody was willing to help me until I contacted 7 On Your Side," added Kajikawa.

Infiniti agreed to take back his vehicle with no obligation to extend the lease or buy a new car.

The company told us: "We were delighted to be of assistance to this loyal customer... as we all work together to prevent the spread of COVID-19."

Kliorin also contacted 7 On Your Side as well as the state's New Motor Vehicle Board.

"If you push hard enough, if you call enough times, if you turn ultimately into a full time job for yourself, you can resolve this," he said.

VW told us it is handling each lease on a case-by-case basis and has launched a "proactive campaign to contact customers nearing the end of their lease term to determine the best individual solution, from lease extensions up to six months to arranging vehicle turn-ins from a customer's home."

We also reached out to the trade group Alliance for Automotive Innovation. It told us it was not aware of the issue, but would be researching it. Nearly four million leases are scheduled to expire this year.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

If you have a question or comment about the coronavirus pandemic, submit yours via the form below or here.

Get the latest news, information and videos about the novel coronavirus pandemic here

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