Scam - Buying the car at the end of the leasing

Hi everyone,

I encountered a problem, I'm not really sure what I should do next so I post here hoping I will receive some advices.

The issue: I leased a car 5 years ago and the contract ends soon, the residual value is 3.000CHF and the car's value was around 25K. Now I want to buy the car and pay the rest of 3.000CHF but the car garage says he is not obliged to do that. Instead he wants the car back and he will pay the 3.000CHF. This is absurd, I paid almost the full value of the car. The leasing is with Cembra, I called them and they did not helped me. What can I do?

Please any advice is appreciated, thank you for your time.

Sounds legal to me.

Tom

What does the leasing contract say?

Not a scam at all, just a very bad deal for you.

If you plan on buying the car at the end of the lease, it's very importat to make sure the garage signs a waiver called " verzichtserklärung" .

If no such waiver is signed, they have first refusal. Usually at your costs.

Leasing can be a minefield of extra costs, not something you should get into without careful consideration.

You leased a car and unless the contract stipulates that you must be able to buy it at the end of the lease then the seller has every right to take it back. Clearly a 25k car is still worth more than 3k after 5 years though, so it is almost certainly an artificially low figure.

Don't lease your next car, buy it instead and avoid these kinds of problems.

PS: Be careful about naming the actual leaser when you use the word "scam". Unless it is genuinely a scam, it could be taken as libel and I am guessing your username has part of your real name in it.

Your failure to read and understand the contract you signed does not represent a scam, but rather careless on your part. As for what to do next? Read the contract! I pretty sure the garage owner is correct.

Other option is to make it worth 3k...

Sadly this isn‘t uncommon and seems to be a „feature“ of Cembra leases. I‘m pretty sure that in other countries agreeing an unusually low residual value, but not allowing the purchaser to exercise it would be illegal as anti-consumer behaviour.

Have you investigated whether it is possible to buy out the lease before it ends? If it‘s possible, the cost will be similar to whatever payments you have left plus the CHF 3k. The contract normally has a schedule in it which shows the costs to do this over time.

Tough, learn to read what you sign, i can guarantee it is very clear in your leasing contract

Why would the garage pay you the residual value?

The garage would pay the leasing company the residual value, not to him.

Tom

OP, you may have more luck if you decide you want to roll the contract into a new one (ideally not with the provider you mention).

You might be able to “part ex” the 25-3k into a new car, this might be appealing enough to the garage if it works for you.

As you say, your situation Isn’t the norm and you’ve been stung, but it is worth checking these things before you sign.

Expensive lesson learned.

Thank you everyone for the answers. I understand this is a mistake and as some of you said, leasing being a minefield .

I had similar discussions with BMW when I leased my car. I paid a reasonable deposit and at the end of the leasing period the residual amount is around 2K which I intend to pay off and keep the car. The dealer was a little cagey when I asked if this would be a problem, saying that it wasn't very common but it should be fine. I then asked him to explicitly state in the agreement that I would have first refusal and not the garage. He was pretty reluctant to do it, telling me that the garage should honour my wishes, but I insisted so there is some vague sounding language in there.

I probably should have gotten a lawyer to check and amend it but hey ho!.. let's see how it goes

Unless you are buying a collectors item, cars are almost always depreciating assets. In entering a lease, you should be pretty clear about what you want to do with the car at the end of the lease before you sign up.

Another option is to take out a personal loan for the car rather than a lease. The interest rates these days can be competitive with leases, insurance would be cheaper, interest fees are tax-deductable and you can sell the car anytime you like.

I guess it's worth thinking about paying the money penalty to end the lease a couple months before contract as eyebebee mentioned. They cannot refuse an anticipated termination, it's on the contract You might loose a few hundred CHF, not several thousands.

I'd assume BMW Bank would avoid to screw customers to avoid staining the BMW car brand. But, be careful anyway. I signed the same terms with BMW but I feel relatively safe because the residual for my lease is high, damned high.

Switzerland has such laws as well - https://www.seco.admin.ch/seco/de/ho...dingungen.html

So you may actually get your contract overturned through court on that basis. There's of course process risk - if court doesn't agree with you that this is a scam, you'd owe court costs and other side's legal expenses.

More precisely, what "paying the money penalty to end the lease a couple months before contract" means? Getting a loan and paying the rest of the months + residual value + some penalty?

Those are money issues which come after the contractual issues are sorted out. Read about "vorzeitige vertragsauflösung" or something like that in your contract first.

But be careful. Some contracts state the car must be in good condition when returned. So if you key it, or "accidentally" drive into the garage wall, you'd be expected to repair it at your own cost.

However, you could take out any accessories, if the tires are good try and swap them for a well used set (but above the legal minimum). Remove any extra carpets or mats. Enjoy several large cigars inside the car or have your smoking friends puff away inside it. I'm sure other EF'ers can think of other things to do that would impact the value without it being down to you.

I can understand your wish to lease. There are many reasons and not everyone has +- CHF 50k to splash out on a new car. Next time talk to CEMBRA direct, not through the vehicle dealer, as the rate can be higher to compensate for his commission. As a good client they will likely give you a better rate.

Then go to another garage and you can negotiate a cash discount.