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Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Advice

Discussion in 'Gen III 2010+ Prius Main Forum' started by theowl, Jul 17, 2009.

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  1. theowl

    theowl Prius Convert

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    I've been cruising around in my new Prius since I got it about 3 weeks ago. I ABSOLUTELY LOVE IT. Tonight, I got a STRANGE call from the dealership while I was on vacation. It was one of those calls that you know you should not pick up, but I did.

    OK, so the guy from the dealership sayid, "Toyota has found a problem with your lease and refuses to honor it. We need you to come in and fix it." I asked what the problem was, and he said it was that no sales / use tax was charged. I told him that part of the salesman's and sales manager's pitch to me was that, since I am resident of Washington, DC and DC promotes hybrid drivers by waiving the sales / use tax on new hybrids, I would save about 10 percent of the sticker price for my purchase or lease. This was mentioned multiple times during the sales pitch. The guy on the phone said that I was misinformed and that the waiver applies only to purchases, not leases. I told him that the tax waiver was THE DECIDING FACTOR in my decision to get the Prius and that my sales contract showed NO TAX in the contract. I love my Prius, but it was an impulse purchase and a second car for me at that. I only got it because I felt like I was getting a good deal due to the sales / use tax exemption.

    I told him that I would be happy to come by and talk to him when I get back from vacation, but I will not be paying them another dime because we reached an agreement on price almost a month ago before I decided to buy.

    So, I am here asking for advice... What are my options? Obviously, I have a signed contract, and it appears that Toyota is trying to back out of it. If I tried to do the same thing, Toyota would surely repossess my car and wreck my credit. If they keep refusing to recognize and honor my lease, do I just give them the car back???

    The dealership is Bill Page Toyota on Annandale Road in Falls Church, VA. I posted earlier saying GREAT things about this dealership, and I hope this works out satisfactorily that Toyota does not renege on my lease. I promise to let everyone know what happens when I go to the dealership. Until then, any and all advice is GREATLY APPRECIATED.
  2. DianneWhitmire

    DianneWhitmire High PRIUStess

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    Read this:
    Special Tax Break Available for New Car Purchases This Year

    The tax break is done in your taxes, but I think it's on a buy only, hon. Have them convert the lease contract to a buy, and then take the tax deduction when you do your taxes in 2010 (for 2009) ...

    Or, can the dealership fax Toyota Financial proof that you'd pay 0 sales tax as a DC resident? Where is that written?

    Sorry -- am clear across the country... so I am unclear on taxing where you are.

    If the tax break is for buy-only, tell them to convert you to a buy. That's easy!!!



    2 people like this.
  3. JamesBurke

    JamesBurke Active Member

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    I would say your lease is void at this moment. Any attempt to force you into another less favorable lease I would consider fraud if your current lease says "no tax" in writing. They should do one of the following. 1. Take the car back and refund all your money IE payments and down payment. 2. Offer to sell you the vehicle at the market price (msrp currently) with an interest rate equal or less than your lease interest rate. 3. Rewrite the lease with the monthly payment reduced by the tax amount so that your cost per month stays the same.

    A lease has same credit qualification as a purchase so why not just buy?

    I know this dealers Honda dealership across the street (4 cars)and some of the salesmen on the Toyota side. I would be surprised and very disappointed if they didn't work this out in your favor.

    Don't accept anything you don't like. If things go bad get an attorney and contact the Fairfax County Attorney's office.

    In VA, a leased car is considered a rental car and you pay a sales tax if you and the leasing company are in state or a use tax if you go out of state. (Leased an Acura and tax was not disclosed at signing. Cost $60 plus extra a month. Never again)
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  4. theowl

    theowl Prius Convert

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    Hi, Dianne -

    Thanks for replying. The deal for DC residents is that the city does not charge the regular sales / use tax at the time of purchase. I have not heard of other localities doing anything like it. The special deal only applies to new hybrid vehicles.

    The dealership made me aware of it and even made an extra effort to point out on the lease contract that there was no DC sales / use tax being applied.

    I'll listen to what the dealership has to say and see if they offer to convert my lease to a purchase agreement. I'm not a fan of purchases, though. I trade frequently, and I went for a two-year lease on my Prius. I fell in love fast, but - when it comes to cars - I have a tendency to have a wandering eye.

    Again, thanks for the advice! I have a feeling that if I had gotten my car from you, then there would have been no confusion. Unfortunately, your dealership is not too close to DC!
  5. DianneWhitmire

    DianneWhitmire High PRIUStess

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    OK -- I am confused!
    Any Virginia dealership MUST do biz with DC residents... you're so close! How can TFS not know this tax issue exists??

    :: scratching head ::

    and oh heavens, ya give me too much credit. Things happen here too from time to time ... nobody's walking on water around me all the time LOL (and not me, I have my days TOO!!!!) ;)

    Thanks... and I sure hope you get this resolved. Perhaps a phone call a tad upwards to the GM of the dealership (not the GSM, the GM, or find their Finance Director) will answer your questions. Upper management often has a way of explaining better with power to resolve. Between me, a couple of bosses here and myself, we can always come up with a solution and have the power to settle someone's concerns and fix issues w/o asking "permission" of higher-ups. :)
  6. DianneWhitmire

    DianneWhitmire High PRIUStess

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    James, I agree with you here:

    3. Rewrite the lease with the monthly payment reduced by the tax amount so that your cost per month stays the same.

    That is how I would fix this IF the state of VA and DC ain't talkin'... :confused:



  7. theowl

    theowl Prius Convert

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    Thanks, James. I appreciate the advice!



    That's what my neighbor (an attorney) just said when I emailed him. Argh!



    I just really only lease because I turn over cars quickly. Two year leases seem to work best for me. When the term is up, I drop off the car and go shopping for something new and don't have to haggle over trade ins, selling on my own, etc.



    Before this dreaded call, I was singing the praises of Bill Page Toyota. The sales guy and the sales manager were great. The sales guy actually never EVERYTHING about the car. You could tell he really took a lot of time to familiarize himself with the vehicle before selling it. I could not say the same about the guy who said us our last Mercedes! Not even close. So, I am hoping this can be resolved quickly and easily when I get back from vacation. Of course, I am trying not to let it totally ruin my vacation, but I just looked at pictures of my car and only felt sadness and bitterness. I just don't want this whole thing to sour me on a car that I love.



    I hope it does not get to that, but I'll do what it takes not to be fooled with.

    Thanks again for the advice. I really appreciate it.
  8. theowl

    theowl Prius Convert

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad



    That's what I think, too!



    As soon as I get back from vacation, I'll definitely talk anyone I can up the food chain.

    Thanks again, Dianne! I really appreciate the advice.
  9. gmalis1

    gmalis1 New Member

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    1 Give the the car back and tell them to shove it up their ***.
    2 Keep the car and tell them to "sue" you. The DEALER AND YOU signed the lease...it's a binding agreement.
    3 Have them rewrite the lease, lowering the price so the lease payments equal what you are paying now.
    4 After this gets worked out, one way or another, NEVER return to this dealer again and make sure you tell everyone you know what transpired.
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  10. theowl

    theowl Prius Convert

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad



    Thanks, gmalis. The dealer's call is starting to sour me on the Prius, though I am fighting that urge with every fiber of my being. I mean I love it, but - after losing a night's sleep over this on my vacation - I actually woke up this morning thinking that your option #1 was the best.

    With a clearer mind, I think I am going to go in with option #2 and thell them that if they want this all wrapped up option #3 is fine with me but I won't sign anything that takes another penny out of my pocket.

    I'm not going for otpion #4 now. I don't want to bad mouth anyone, but that option will be on the table if this is not resolved FAST.
  11. Zaxcom

    Zaxcom Member

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    I went through almost the same thing. Two weeks after I got the car they said my lease was not correct. See this thread.

    http://priuschat.com/forums/gen-iii...592-bank-tried-change-payment-after-fact.html


    I called my sister who is a contract lawyer and she had me read a statement of contract law to the bank. The bank realizing I knew what I was saying and having legal backing did not have one word to say when I finished the statement. I left them with 2 options, live by the terms, or come and get the car and terminate the contract.

    The short story is the bank realized that they could do nothing about it. We had a signed contract and taking back the car would leave them with a car that they could not sell for profit and I had no money in play on the deal so they had no financial penalty to hang over me. They are living by the terms as agreed to at purchase.
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  12. Jabber

    Jabber Chicagoland Prius Guy

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    Zaxcom, be careful on your advice. Your problem was a different residual. That is far from not paying tax.

    Owl, let me throw some other advice into the thread. I have been a leasing and finance manager for years for dealerships. Every brand. The problem you are going to have with the current situation is the BACK of the contract. Yes, the side that nobody ever reads. Here is what it states:

    Taxes and other Charges. You are responsible for and will pay when due all taxes, repair bills, storage fees, fines, and other charges and assessments in connection withthe vehicle. If you fail to pay these amounts the Creditor (TMCC) may do so for you. If the Creditor does so, you agree to repay the amount when the Creditor asks for it. You agree to comply with all registration, licensing, tax and title laws applicable to the vehicle.

    What this means is that TMCC and the dealership can leave your contract as is if you decide to take up the firm stance and say, "Sue me". You have to be very careful on what you choose to say to them. If you mention "lawyer", the dealership, if they were smart, is say OK. And cut all communication with you. And let the attorney's fight it out, which will cost you more than the tax money due.

    What I would do in your situation is this. Speak with the dealership, preferrably the GM as Dianne stated, and agree to re-sign whatever they want as long as your payment does not go up one dollar. It is the dealerships fault, not yours, that the tax wasn't collected. A smart GM will just back the tax amount out of the deal, which loses profit, but not nearly as much as a potential lawsuit and the bad word of mouth press.

    I'm like Dianne here, I have no idea what the taxes are supposed to be in different states. I need to know one thing though. Do you have a flat sales tax, a use tax, or both? Unlikely you have both, but I have seen it before (city of chicago for example). Are you familiar with what the difference is? Just in case:

    1) Sales tax is charged against the difference between the selling price and the trade in value (if applicable).

    2) Use tax is charged as a percentage of the payment, i.e. 6% use tax on a $300 payment would amount to $18 dollars per month. Total payment is now $318.

    There is a big difference in the total amounts due, so one might be more easily had than the other.

    IF all else fails, turn it into a buy instead of a lease. Since this is the newest Prius, The value will remain high enough to where in 2 or 3 years, if you decide to get rid of it, you won't get hurt financially (be upside down).
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  13. Argyle

    Argyle New Member

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    Don't take this as a personal attack, but as someone sitting in the peanut gallery, I have to wonder about some stuff.

    So you have the financial means to pick up a ~$30K car 'on impluse' as a second vehicle and flip your cars every two years and you come to an internet forum for free contract law advice?

    Did the dealer ever say how they needed to 'fix it'? Did he say that had to charge you more or were they going to play with the numbers to keep the gov't happy? (Your post only said the dealer wanted you to come in to 'fix it', you did not come out and say they wanted to charge you more.)

    And the tax exemption was 'THE DECIDING FACTOR' for buying a Prius? There had to more reason than that for picking this car. Someone could give me a tax break on a Humvee and I would turn them down. Partially because it isn't the right vehicle for me and partially because I have never had to pay a dime for a hummer. :cool:

    But jokes aside, the situation just sounds so foreign to me that I can't get my head around it. If I had the money to afford impluse purchases in this price range, leases which cost more than buys and rapid vehicle turnover, I would think I would have an attorney on speed dial. It just isn't a scenario that would ever come up in my life.
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  14. fred garvin

    fred garvin New Member

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad



    people are different

    if i wasn't paying a mortgage, saving for two retirements, two weddings, three college educations, two long term care insurance contracts and two regular term life insurance policies, i might buy more car, in the form of a lease, and only keep it two years.

    not that i don't love my wife and kids, but every once in a while, when paying bills, i wonder what it would be like to have my income and not have all that "overhead". The places i would go, the cars i would drive, the hot babes that would still not want to go out with me! The truth is I would probably be lonely and probably have destructive habits, so what is best for me is what i am doing.

    and on the point of seeking free advice from the forum - read the thread - two or three car sales/finance professionals have offered wisdom here, in short order, and on the weekend, so he can enjoy his vacation and deal with this later. its a beautiful thing.
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  15. bikr357

    bikr357 Plugged in Member

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    I had a friend in a similar situation with a trade-ion and purchase of a Mitsubishi several years ago. Basically the salesman/dealer made a mistake on the transaction and wanted to change the terms after the deal was made and all the papers signed. The signed Contract stood, in her case, and there was noting the dealer could do but eat the "loss" caused by their mistake.

    Your situation is likely similar and to verify you need to check the fine print of the lease to see if there are anything which voids the lease if Toyota does not approve it. Otherwise I think you and the Dealer have a binding agreement and the Dealer and Toyota have the problem. Don't let the Dealer make it yours; let the dealer and Toyota work it out. Good luck and enjoy the car and vacation.
  16. Jabber

    Jabber Chicagoland Prius Guy

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    But again bikr357, it is nothing to do with giving him the wrong price on the car, the wrong interest rate charged, the wrong residual used. If that was the case, he could tell the dealer to go pound sand and they have no choice. This is dealing with taxes. That is SPECIFICALLY mentioned in the terms of the contract, as I have quoted. No where on the contract does it say that if the dealership charged the incorrect interest rate, we have the right to change it at any time. In fact, it specifically excludes us from changing any terms on the contract.

    I am not a lawyer, but I have been doing this long enough to know what can be argued for and against when it comes to vehicle financing.
  17. Outlander

    Outlander New Member

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad

    I had a similar thing happen to me with GM. The dealership wrote a lease deal that GMAC would not honor because it was an unsupported mileage band (miles over the lease term).

    In my case I got a call from the store manager informing me of the situation and acknowledging their mistake. I, too, had driven the vehicle for 2-3 weeks. The contract was void because of the change in terms and we couldn't come to agreeable new ones.

    I said thanks but no thanks. They took the vehicle back and provided me with a full refund.

    It seemed a bit harsh at the time but it is their business to know their programs and tax laws. After all, it is what they do for a living.

    If you get any kind of unfair hassle from the dealership at all move on. They don't have any leverage over you to accept new terms.

    By the same token, don't leave them hanging one extra day. That's when it gets sloppy and folks start saying silly things like 'your driving a car that you don't have a binding contract to use constitutes GTA' or implies agreement to new terms. Another consideration is that the vehicle is back to being their insurance liability.

    I encourage you to wrap it up quickly with a clear 'yes' or 'no' decision so that everyone can move on.

    Jabber had some good input. I think rewriting the agreement to arrive at the same price would be reasonable.
  18. theowl

    theowl Prius Convert

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad



    Zaxcom,

    Thanks for sharing this. I hope Toytoa and the dealership agree to honor their end of the deal, just like I am doing with my end by paying my monthly payment.
  19. theowl

    theowl Prius Convert

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad



    No personal attack taken. I'm welcome to hearing as many points of view as I can before I go back to the dealership. That's the reason I came to post my question here on the forum. I've gotten some good advice from the PriusChat community, in my opinion. I really don't want to escalate this to the attorney level. Bringing in the lawyers will be my last resort.



    Well, I loved the car for one. It was the perfect car with perfect equipment, and the perfect inside/outside color combo. When the dealer started hyping the 10% savings due to the DC tax break, that was what made it a no brainer for me. Like you, I'd never pay a dime for a Hummer. In fact, you'd have to pay ME a lot of money to take one!
  20. theowl

    theowl Prius Convert

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    Re: Odd Call from Dealership - Dealership is Claiming that Toyota is Not Honoring My Lease - Need Ad



    fred, thanks and that's exactly it. This is an awesome community, and I've loved being a part of it since before and after making my purchase. These posts have really helped me getting ready for when my vacation ends and I go back to the dealer and see how they want to resolve this.
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