Our firm is investigating potential lawsuits on behalf of individuals who leased a new or certified pre-owned or used motor vehicle and have been charged with so-called “excess” wear and damage, especially when not leasing another vehicle with that dealership upon surrender of a vehicle.
If you or someone you know leased a vehicle and was responsible for excess lease wear and damage charges, please contact Parker Waichman LLP today.
Consumer Vehicle Leasing Continues to Mount
Many consumers are opting to lease new or used motor vehicles rather than purchase them outright. According to The New York Times, citing data from Edmunds and Kelley Blue Book, the leasing rate in the United States in 2014 was higher than in any other time in more than 10 years. In fact, consumers rented more than one out of every four new vehicles and that figure has risen significantly in the past two years—some 27 percent, from 22 percent in 2012—Edmunds indicates.
Today’s rise in auto leasing is occurring for a number of reasons, including that American consumers have become accustomed to ubiquitous monthly payments for a growing range of common products, such as mobile telephones. “The consumer mind-set has shifted in many ways; it’s been driven by this narrow focus on monthly payments, regardless of total cost,” Jessica Caldwell, senior analyst at Edmunds, told The New York Times. “That’s a perfect environment for leases, where auto dealers already try to keep customers’ attention on the monthly payment.”
The New York Times also noted that, “Automakers are capitalizing on the laser-like focus on monthly payments,” noting that, in December 2014, nearly 40 vehicles were promoted with monthly lease deals of $199 and under. This is a fairly new culture shift given that leases were typically seen in the luxury vehicle arena; however, Ms. Caldwell notes that, consumers began seeking lower-end leases in all car brands, including Nissan, Honda, and BMW. Previously, those cars were offered at more affordable prices and consumers chose to purchase them. Today, more and more dealers are offering tempting lease programs on non-luxury brand vehicles, driving up activity in this area. In the luxury brand area, leasing behavior is up in some brands and down in others, The New York Times wrote.
Technology has also led to the increased desire to lease. Today, vehicles provide safety and entertainment and, noted The New York Times, have become a “smartphone on wheels.” Today’s consumer is beginning to view vehicles in the same way they view computers and cell phones, with consumers seeking the most current technology. The purchase packages are often pricey, driving the price of many non-luxury brands well above the base price of many motor vehicles that do not offer state-of-the-art technology.
Leasing a vehicle enables consumers the ability to pay for a vehicle with the latest technology and to make payments that are more affordable for a short lease period—three years. In three years, notes The New York Times, the new leases will be offering even more advanced technology, making it easier to keep up with ongoing vehicle obsolescence without facing losses this would present with a purchase. “What’s offered inside a car these days is changing so rapidly that some consumers don’t feel they want to be tied down to one vehicle for the next 10 years,” Alec Gutierrez, senior analyst at Kelley Blue Book, told The New York Times.
Vehicle Lease Agreements
In an auto lease, the lessee is required to sign a lease agreement that defines rights and obligations. Virtually all vehicle leases contain a provision under which the person who leases the vehicle (the lessee) is financially responsible for “excess wear and damage” as described in the lease.
The problem for many lessees—when the lease is up—is that the lease description of “excess” wear and damage is often vague, and this can lead to unexpected charges for things the lessee considered normal wear and tear. Such charges are more likely to occur when the consumer turns in the vehicle and does not lease another vehicle from that dealer. Dealers are usually more accommodating to consumers who are leasing another vehicle from that dealership.
The categories of “excess” wear and damage for which the lessee might be charged include glass that is damaged; damaged body, fenders, metal work, lights, trim, or paint; missing equipment that was in or on the vehicle when delivered; missing wheel covers, jack, or wheel wrench; missing or unsafe wheels or tires; any tire with less than 1/8 inch of tread remaining at the shallowest point; torn, damaged, or stained interior including dash, floor mats, seats, headliners, upholstery, interior trim, or trunk liners; and any damage or condition that causes the vehicle to operate in a noisy, rough, improper, unsafe, or unlawful manner.
Car Wear and Tear Recourse
Various states may have car wear and tear laws that are touted to provide recourse when consumers are concerned that they may be the subject of a car wear and tear scam. For example, in some states, arbitration may be recommended to consumers to avoid a lawsuit in car and wear and tear dispute. When consumers believe there may be fraud associated with lease car wear and tear charges and car wear and tear reimbursement is sought, consumers should be aware that, in addition to potential arbitration mandates, there may be other mandates, including charges when, for example, an itemized appraisal is requested. There may also be time frame limits associated when alleging an auto lease car wear and tear dispute and recourse is sought at the dealer or state level.
Parker Waichman is thoroughly versed in the various laws surrounding lease car wear and tear and has assisted consumers who seek car wear and tear recourse over alleged scams. However, to help reduce the chances of a dispute over wear and damage charges, the lessee should take precautions before returning the vehicle:
- Read the lease carefully to learn what wear and damage charges might be.
- Thoroughly clean the vehicle inside and out and photograph and video the vehicle.
- Document the remaining tire tread depth by taking a photograph of a Lincoln head penny upside down in each tire tread.
- Replace any missing equipment and make necessary repairs; maintain receipts to prove expenditures.
New York State Law Specific to Wear and Tear Disputes
Parker Waichman notes that New York State provides laws that are meant to protect consumers who have leased vehicles and who dispute the amount for which they are charged upon termination of those lease. These include The NY Personal Property Law (“PEP. LAW”); Chapter 41; Article 9-A, §330, et seq., under which the New York Motor Vehicle Retail Leasing Law (“MVRLA”) may be found. This law provides New Yorkers with the legal right to challenge excess wear and damage charges billed to consumers for the leased vehicle at the time the lease is terminated.
Also, pursuant to N.Y. PEP. LAW §343, entitled, “Assessment of Excess Wear and Damage to the Vehicle,” both the holder of the lease and the consumer (lessee) must meet a variety of stringent mandates regarding the timing, form, and substance of the notice and actions to be taken.
And, pursuant to N.Y. PEP. LAW §346, entitled, “Penalties,” the consequences a leaseholder may face for violating the terms of the Motor Vehicle Retail Leasing Law are set forth. This includes liability to the consumer (lessee) for the actual damages the consumer suffered; any civil penalties; and, under some circumstances, reasonable costs and attorneys’ fees.
The attorneys at our firm understand these laws and are expertly able to review lease agreements, determine if consumer lease responsibilities are met, and seek compensation for qualifying consumers.
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