The Expert Podcast

…Why are there so many problems with titles for vehicle lease buyouts Here's an article from Nebraska but it's just one example We see this all the time. Where somebody gets to the end of their lease and they decide to buy out their lease And then they have a huge title problem Maybe months or years later they end up with a vehicle they can't drive because they don't have legal title. And they paid big money for it So how does that work? So what happens with a lease is when you buy that car. From the dealer. The dealer will put the vehicle titled into the name of the lease company So normally that's going to be the manufacturer has a captive lease. company So if you buy it from Toyota dealer it's going to be Toyota motor credit or Toyota leasing your vehicles titled. in the name of the lease company It's not titled in your name because the lease company is technically the owner. You may be the registrant's meaning that your name is on the registration and license plate, but the title owner is the leasing company. That's different than when you finance a car When you finance a car through Toyota, you are listed as the owner. And Toyota or the lender whoever it is, is listed as the lien holder, that's different You are the legal owner It's just there's a lien holder attached to that title record. When you lease a vehicle. The leasing company is the owner. You're just a registered driver. Now when you get to the end of the lease, 2, 3, 4 years in. And you have a lease buyout on. that you decide to exercise. You have to come up with a lump sum maybe it's 15 20,000 to buy out the rest of that vehicle. So you pay your money whether it's cash or you finance it with another bank. What's supposed to happen is that leasing company is supposed to take the title, sign it over to you as the new owner. Record it with the DMV or title agency in your state and the state will issue a new title with your name now listed at the owner. If the leasing company doesn't follow through on that. They will remain the owner. You won't notice a difference because you're still registered You're driving it You renew your plates your insurance. And then it could be a year or two or three years later. You decide you want to sell that car. Or trade it in. or do something with it. And you go to look for the title and you can't find it and you go to the DMV or the title agency, and you find that it's still in the name of the leasing company. They never switched it over. That's a problem because that far down. In history. The leasing company might find it difficult to transfer the title then because they no longer have the records. They might not even have that original title certificate…They might not even have a file for you showing that you paid for it. So we've seen where clients have had to spend hours and hours filling out forms sending in documents Sometimes you have to go to court or file a bond a surety bond. to get that title in your name. So it's very important at the end of your lease If you buy it out to get that title transferred to you immediately. And if you don't see it showing up in the mail within a month or so. Follow up. Make sure that that leasing company does what they're supposed to do Look. Most of the time they don't…They don't. Forget to do this on purpose They're not trying to hurt you They're not trying to scam you They're not trying to mislead you. It's just that. Leasing companies don't normally have a large department of people that are responsible for issuing titles. That's like an afterthought Their main business is leasing new vehicles collecting payments. They may have a title department They may have. Administrative people who do titles. But it's not their biggest. So sometimes it falls through the cracks, but if it does you want to make sure that you follow through. To have them do it How do you make sure it gets done? What we recommend doing? If you don't see that title within a few weeks. Is go ahead and get the form for the title transfer There's an official DMV form in every state, 50 different states 50 different forms. Find the one for your state. Fill it out. Put all your information. Owner. VIN number vehicle. Leasing company name. Print it on paper, mail it to that. Leasing company. With a little arrow sticker saying sign here. Have it already filled out, put a return envelope in it. So that they can easily send back to you, put a stamp on that return envelope. That way Even if the lease company doesn't have a large…department of people just sitting around waiting to help you, even if it gets on somebody's desk who's busy with other things. They can easily process it just sign it mail it to you and you can take care of it because if you don't. Follow through and make that happen. You could find out 2, 3, 4 years later. That you now have a vehicle with no title and there's no clear pathway to getting a title And that could be a problem. There's been many people we've talked to over the years hundreds of them. Who have discovered they paid off a lease. Tens of thousands of dollars. And they have a title problem And sometimes that title problem takes legal action to fix You don't want to be put in that position because at that point it's very very difficult Oh, look the least companies want to help you out They're not out to screw you over. They want to help you but just make it easy for them and follow through if they forget if they don't. Help you right away Or if the person that you're talking to is isn't really that cooperative, just hang up and call back and talk to somebody else or better yet do it in writing Don't try to do it over the phone because on the phone everything is anonymous Nobody has any accountability. If they decide that they don't want to help you they can just. Forget about you ever call them and then go onto something else in their daily routine. And you'll never know why it didn't get done. So if you do it in writing it's a lot better you have a record of it and it makes it easier for them to follow through to get you the title for the vehicle you deserve to have in your name.