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GM Financial halts lease-end payoffs with non-General Motors dealers


jasonj80

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GM Financial halts lease-end payoffs with non-General Motors dealers - News Chant USA

GM Financial will cease working with non-General Motors dealerships on off-lease car payoffs beginning July 1 to make sure GM dealerships have “priority access” to the automobiles coming again to market, in keeping with a message obtained by Automotive News. The microchip scarcity is the first motivator of the coverage change, a GM spokesperson confirmed by way of e mail, “to better support our GM dealers through the current economic environment and the challenges they’re encountering sourcing quality pre-owned vehicles.”

GM is really screwing over their lease holders.  

 

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I don’t think so, I actually would assume this is going to violate some state antitrust and consumer laws. Say a dealer will not offer you any money for your pickup truck lease turn in. They can buy it and make a higher profit and you’re forbidden to sell to a carvana, vroom or another dealer that would offer you more money. 
 

This has all the markings to explode into a PR nightmare by GM, pisses off their existing customer that they are trying to screw and they walk back or don’t even start the program in July. 

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1 hour ago, akirby said:

But can’t they buy out the lease with the dealer then sell it to the other dealership?  I think this just ensures the dealer gets first crack.


The dealer is who is buying, so they say I’ll give you 15k for your equinox, Carvana or Toyota dealer says we’ll give you $18500 for your equinox. Your only option would be  to buy the car yourself and then sell it to carvana etc to get the $18500, what it allows is GM finance/dealers to under pay for cars that they can then sell at a larger profit. 
 

The GM lease customer is getting screwed yet again in this case. 

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1 hour ago, jasonj80 said:


The dealer is who is buying, so they say I’ll give you 15k for your equinox, Carvana or Toyota dealer says we’ll give you $18500 for your equinox. Your only option would be  to buy the car yourself and then sell it to carvana etc to get the $18500, what it allows is GM finance/dealers to under pay for cars that they can then sell at a larger profit. 
 

The GM lease customer is getting screwed yet again in this case. 

 

My salesperson was telling me they had a F-150 Platinum come off lease. I'm assuming that Ford Red Carpet lease said hey you can get this truck for $47K and they where only expecting to have to pay $43K and they passed on the deal (never leased before so not 100% if I have this right).My sales person followed the VIN on the truck and it went to an auction and sold for $54K!

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2 hours ago, jasonj80 said:


The dealer is who is buying, so they say I’ll give you 15k for your equinox, Carvana or Toyota dealer says we’ll give you $18500 for your equinox. Your only option would be  to buy the car yourself and then sell it to carvana etc to get the $18500, what it allows is GM finance/dealers to under pay for cars that they can then sell at a larger profit. 
 

The GM lease customer is getting screwed yet again in this case. 


I thought the lease buyout amount is predetermined and doesn’t change.  Why would that change whether it’s the dodge dealer or caravan?  I’m missing something.

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8 hours ago, jasonj80 said:

 Say a dealer will not offer you any money for your pickup truck lease turn in.

 

jason80, why would a dealer be offering any money for the turn in? If you are at the end of your lease, doesn't the lessee either buy the vehicle at the pre-determined (on the contract) value, or relinquish the vehicle?  The lessee doesn't own the vehicle (yet), so why would the dealer be making an offer?

 

The only people I see getting hurt are those who are not able to purchase their vehicle at the pre-determined price, and then re-sell it to someone else for a greater value.  In that case, they should have bought the vehicle outright, rather than leased. A lessee never owned they vehicle in the first place, why should they be able to profit in the current market?  What if the market was in the tank, aren't they protected if the dealer tried to change the end-of lease value, and tell them they owe more money?

 

HRG

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4 hours ago, HotRunrGuy said:

 

jason80, why would a dealer be offering any money for the turn in? If you are at the end of your lease, doesn't the lessee either buy the vehicle at the pre-determined (on the contract) value, or relinquish the vehicle?  The lessee doesn't own the vehicle (yet), so why would the dealer be making an offer?

 

The only people I see getting hurt are those who are not able to purchase their vehicle at the pre-determined price, and then re-sell it to someone else for a greater value.  In that case, they should have bought the vehicle outright, rather than leased. A lessee never owned they vehicle in the first place, why should they be able to profit in the current market?  What if the market was in the tank, aren't they protected if the dealer tried to change the end-of lease value, and tell them they owe more money?

 

HRG


I think he’s saying Carvana could offer to buy the vehicle and they do the lease termination with GM financial.  But I agree with you that the buyer can just buy out the lease and flip it to Carvana.  If you can get credit to lease you can get credit to do the buyout.  It’s more hassle and it does give the GM dealer better odds of getting the vehicle but doesn’t prevent Carvana from buying it at a higher price.

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1 hour ago, akirby said:


I think he’s saying Carvana could offer to buy the vehicle and they do the lease termination with GM financial.

 

Maybe this is a new form of entitlement?  People thinking they can profit from selling a vehicle THEY DON'T OWN outside of their lease.

 

Supposedly, this language is in the contract they signed; Joe Bartuch, govt vp of U.S. gross sales and credit score for the lender, advised GM that the captive finance company would notify clients over the approaching weeks that the phrases of their lease settlement stipulate they “are only able to submit a lease purchase request … by contacting GM Financial Customer Experience or working with a participating GM dealership.”

 

HRG

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17 minutes ago, HotRunrGuy said:

 

Maybe this is a new form of entitlement?  People thinking they can profit from selling a vehicle THEY DON'T OWN outside of their lease.

 

Supposedly, this language is in the contract they signed; Joe Bartuch, govt vp of U.S. gross sales and credit score for the lender, advised GM that the captive finance company would notify clients over the approaching weeks that the phrases of their lease settlement stipulate they “are only able to submit a lease purchase request … by contacting GM Financial Customer Experience or working with a participating GM dealership.”

 

HRG


But it sounds like until recently GM had been allowing 3rd parties like Carvana to execute the lease termination on behalf of the leasee.  And while you’re correct that Carvana doesn’t own the vehicle the leasee  does have the right to purchase the vehicle at lease end and do whatever they want with it.  So now they’re just enforcing that clause and forcing the termination to be done at the dealer in hopes the leasee will just leave it with the dealer and not buy it back and go sell it.

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16 minutes ago, akirby said:


But it sounds like until recently GM had been allowing 3rd parties like Carvana to execute the lease termination on behalf of the leasee.  And while you’re correct that Carvana doesn’t own the vehicle the leasee  does have the right to purchase the vehicle at lease end and do whatever they want with it.  So now they’re just enforcing that clause and forcing the termination to be done at the dealer in hopes the leasee will just leave it with the dealer and not buy it back and go sell it.

 

Akirby, you and I agree.   I'm hoping to hear back from jason80 as to why he thinks GM lessee's are getting screwed.

 

Heck, they leased a GM product in the first place. They deserve this,,,,,

 

HRG

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The reason why they get screwed is at the end of the lease the buyout is $30,000. Carvana/Non GM Dealer offers the applicant $35000 for their vehicle, they hand the keys to Carvana and they get a check for $5000 and don't have to do anything else other than sign some paperwork. Carvana sends the money to GM Finance and handles the paperwork for the buy out the customer is completely out of the transaction . By forcing them to go to a GM dealer the dealer can say I'll give you $32000 for the same car,  the person now has two options. 1. Accept the $32000 for the vehicle, hand the keys to the dealer sign the paperwork and take the $2000, easy transaction but $3000 less than they could have gotten. Or get a loan (cash )for the $30000, buy the car outright from the lease company themselves, then go to the other dealers and get more money. They are just dragging their customers though more loops and additional time to have they dispose of the vehicle as a way to appease dealers who are probably the dealers with questionable ethics to begin with. They know most customers are not going to do that, plus most will read that they can only turn into the same dealer. Some GM leases are learning while they can extend their lease month to month, they don't get any more miles.

 

We also know how some dealerships operate and will tell the customer they don't get any additional money at the end of the lease vs buyout and they can't turn it in elsewhere.

 

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10 hours ago, jasonj80 said:

The reason why they get screwed is at the end of the lease the buyout is $30,000. Carvana/Non GM Dealer offers the applicant $35000 for their vehicle, they hand the keys to Carvana and they get a check for $5000 and don't have to do anything else other than sign some paperwork. Carvana sends the money to GM Finance and handles the paperwork for the buy out the customer is completely out of the transaction . By forcing them to go to a GM dealer the dealer can say I'll give you $32000 for the same car,  the person now has two options. 1. Accept the $32000 for the vehicle, hand the keys to the dealer sign the paperwork and take the $2000, easy transaction but $3000 less than they could have gotten. Or get a loan (cash )for the $30000, buy the car outright from the lease company themselves, then go to the other dealers and get more money. They are just dragging their customers though more loops and additional time to have they dispose of the vehicle as a way to appease dealers who are probably the dealers with questionable ethics to begin with. They know most customers are not going to do that, plus most will read that they can only turn into the same dealer. Some GM leases are learning while they can extend their lease month to month, they don't get any more miles.

 

We also know how some dealerships operate and will tell the customer they don't get any additional money at the end of the lease vs buyout and they can't turn it in elsewhere.

 


Ok so that’s exactly what I was thinking.  The leasee isn’t being screwed out of the extra money, they just have to go through a couple more steps to get it.  And you’re right that some buyers won’t do it and of course it’s meant to benefit the dealers.  
 

Hard to blame GM for simply enforcing their contract terms to help their dealers who have almost no vehicles to sell.   I didn’t even know that turning in a lease to a 3rd party was an option.

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2 hours ago, akirby said:

Hard to blame GM for simply enforcing their contract terms to help their dealers who have almost no vehicles to sell.   I didn’t even know that turning in a lease to a 3rd party was an option.


It's easy to blame GM for this, they screw a few customers here and a few there and wonder why they have 15% market share; Will they lose a million customers over this - not at all, but they will lose a few and those few will tell friends etc etc. 

What this also does is stops customers from cross shopping as they can't go to a Ford / Hyundai / Kia etc dealer and drop their lease there which also used to take care of end of leases if a customer would switch brands. So rather than make better vehicles compared to others they just stop their customers from shopping there. 

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43 minutes ago, jasonj80 said:

What this also does is stops customers from cross shopping as they can't go to a Ford / Hyundai / Kia etc dealer and drop their lease there which also used to take care of end of leases if a customer would switch brands. So rather than make better vehicles compared to others they just stop their customers from shopping there. 

 

It's not GM's responsibility to make it easy for their current customers to shop elsewhere, it's Ford/Hyundia/Kia dealers responsibility to work with those customers, and work-out a solution where the vehicle gets paid-off by the lessee, so they can still shop at a non-GM dealer, and still get the "bonus" you are anticipating.

 

Makes me wonder if you are affiliated with a non-GM dealership, and are looking for those turn-ins for something to sell?

 

HRG

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33 minutes ago, HotRunrGuy said:

Makes me wonder if you are affiliated with a non-GM dealership, and are looking for those turn-ins for something to sell?

 

HRG



Not at all, I work in the Real Estate Development world. I've lived around Metro Detroit for a lot my whole life and I've just seen first hand GM screw customers, dealers, suppliers, communities, and employees continually over the past 30+ years, and they have been doing that for 20 years prior to that. 

 

Don't get me wrong Ford ( and others) are not perfect by any means and have made mistakes but they at least try in making it right at times. 

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1 hour ago, akirby said:

I hear you, but how many people know you can turn in your leased vehicle at a non GM dealer?  I didn’t know that.  Does Ford allow the same thing?  If I had a lease I would assume it has to be turned in at a dealer.


I believe so. I think that's handled by the individual dealers. How else would they get conquest sales when so many people lease these days? 

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5 minutes ago, fuzzymoomoo said:


I believe so. I think that's handled by the individual dealers. How else would they get conquest sales when so many people lease these days? 


Turn in leased vehicle, go across the street and lease a new one.  Or lease the new one first and then turn it in.  

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4 minutes ago, akirby said:


Turn in leased vehicle, go across the street and lease a new one.  Or lease the new one first and then turn it in.  


That might work for someone like you who isn't lazy or understands how this stuff works better than most, but for average Joe idiot, they're going to want this as easy and least confusing as possible. 

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5 minutes ago, fuzzymoomoo said:


That might work for someone like you who isn't lazy or understands how this stuff works better than most, but for average Joe idiot, they're going to want this as easy and least confusing as possible. 


But does Ford even allow you to turn in a Ford lease at a non Ford dealer and have them handle the paperwork?  Do other brands?

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