WASHINGTON–Many of the nation’s auto dealers are telling customers they don’t want them to return their leased cars right now.
Many auto makers and dealers had already told customers they were given them the option of extending their leases by a month during the coronavirus pandemic.
But it was “more than a gesture of good faith—a lot of dealers don't want the cars back right now,” according to USA Today.
USA Today said it interviewed 10 people who have expired leases who, when they went to return their vehicles to the dealership, learned that the dealer wouldn’t take them or made returning the vehicle difficult.
“Several of the customers were told that they could return their vehicle if they leased another one,” USA Today reported. “But the resounding message was that the dealer lots were full, and that there wasn’t any room for them to put the returned leased vehicles. Customers reported having issues with dealers of BMW, Volkswagen, Kia, and Lexus vehicles.”
Shrinking Values
According to USA Today, not only is space an issue in dealer lots, but so is the value of a used and formerly leased vehicle. As CUToday.info has reported, currently, the wholesale value of a used car is the lowest it has been in years, meaning leasing customers who return cars will lead to the dealer—or automaker—taking a bigger loss than expected since the value of used vehicles is down.
“Yet, if the customer holds onto the lease for longer, the value could rise again, and losses could lessen,” USA Today reported.
USA Today said many automakers are offering lease extensions or payment deferrals to keep customers in cars and from missing payments.
“In addition to that, automakers have begun offering large incentives to get people to continue buying cars even as the COVID-19 pandemic has strangled the economy,” USA Today said.
The publication added J.D. Power is forecasting sales will bottom out in April and predicts that the coming months will see an uptick in sales.