7 On Your Side Goes Undercover To Expose Dealerships Overcharging Thousands Of Dollars On Lease Buyouts

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NEW YORK (WABC) — With used car prices doubling this year, more car owners than ever at the end of leases have been buying them back — instead of returning them.

But earlier this year, 7 On Your Side told you about a buyout mess where dealers overcharged thousands of customers on lease buyouts.

Now, Nina Pineda has the results of a two-month investigation showing a worrying trend in the extent of this problem.

Either they locked up or they took off.

“I think they’re doing something wrong, I mean why would you run if you were doing something right?” said Nissan car owner Taylor Brown.

Brown admits he got angry when he went to buy his Altima at the end of the lease and the purchase price was well above the residual value or the price predetermined on his original contract.

At South Shore Nissan in Amityville – it was quoted at a premium price of $1,365.10. And at Nissan of Westbury – a whopping $5,094.51 extra.

“I felt helpless, who am I going to call?” said Brown. “So I called 7 On Your Side.”

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Brown and 7 On Your Side went undercover at both dealerships. The first was South Shore Nissan overcharging Brown by more than a grand – phantom charges not written on the invoice. The salesman called it a “concession fee”.

“Well, each dealership has a buyout fee for processing your lease buyout,” the seller said.

The nearby CFO explained that Pineda asked if this is standard and each customer is billed.

“Yeah, because you take his time, the finance manager has to take care of your paperwork,” the manager said.

He called it “overhead”. But moments later, when Pineda asked him about those charges, he denied ever mentioning them.

“You said all the customers were accused of this,” Pineda said.

“I didn’t say that,” the manager said.

“I’m sorry you were on camera saying that,” Pineda said. “You explain that they are for overhead – for the sales manager.”

“I have no comment,” the manager said.

“It seems like pure dealer profit,” Pineda said.

The manager then said he had nothing to say.

Our next stop was Nissan of Westbury. Brown initially received an invoice loaded with two additional charges totaling more than $4,600.

The CFO said the $4,000 fee is standard and each customer doing a lease buyout is charged the fee.

“So like 60 customers paid that $4,000?” asked Pineda.

The manager said yes.

Do the math – that’s $239,700 in surcharges. We caught eight Nissan dealerships in New York overcharging.

Next, 10 customers spoke to us virtually about the surcharges. They all said the fees were something different.

Brown’s bill labeled it a “purchase fee” and they tried to press him for a “tri-state lemon law fee”.

“So it’s a lemon tax?” Pineda asked the hidden camera.

“That’s right, it’s to cover our liability to the state,” the official said.

7 On Your Side checked with the New York Attorney General, who says he has never collected “lemon law” fees from dealerships.

Yet back inside the dealership, the sour freshness remained.

“It’s 7 On Your Side, we have a problem with these accusations,” Pineda said.

We went back to see the CFO. He, too, denied charging the fees he just explained.

“I didn’t write that,” he said.

“You wrote this – we’ve got you all on camera writing all of this,” Pineda said. “You said it was an ‘administration’ fee, an overhead fee. This fee is not…it’s fiction. It’s a deception.”

In the end, South Shore’s general manager claimed he was doing nothing wrong, but he and Westbury’s finance manager agreed to repay.

They said customers who have been charged excessive fees can come back and get a check from that dealership.

Nissan Corporation told us that these dealers couldn’t charge these other fees that they would keep, and within one day the dealers reimbursed every customer we fought for – a total of $31,500.

After our investigation, the Nissan company also began accepting lease buyouts at no additional cost.

Taylor Brown even got a $300 discount.

“I really appreciate it,” Brown said.

How to know if you think you’ve been overcharged on a lease buyout:

First, determine the price you should pay.

Obtain your original lease documents and research the residual value. Add all fees listed on your lease.

Did you have rent to pay when you bought it? Add that and that should be the price of your vehicle.

Then check your buyer’s invoice from your buyout.

Look at the vehicle (before taxes). Compare the two. If it’s different, you may have paid too much. Return to the dealership. If they don’t help, complain to 7 On Your Side AND file a complaint with the New York Attorney General.

Plus 7 on your side | Pain at the pump: New York’s “gas police” carry out random checks at gas stations

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