KLING
John Rennison, The Hamilton Spectator
Toyota Financial Services has bought back Martin Kling’s leased Corolla and will sell the vehicle at auction.
Toyota Financial Services has bought back Martin Kling’s leased Corolla and will sell the vehicle at auction.
The firm accepted a payment of $3,500 to let him out of his five-year lease. Toyota also refunded nearly all the money Kling paid for an extended warranty, when signing his lease in 2014.
As Action Line originally reported July 14, Kling, now 86, suffered a heart attack months after signing the lease and his doctors told him he could no longer drive.
His dealer wanted him to pay them $7,500 to get out of his lease, which bound him to paying $362.37/month until 2019, a total of $21,500.
While Toyota would not discuss the details of the case with Action Line, the firm did begin negotiations with Kling and his family following our report, saying they could better the $7,500 buyout offer put forward by Upper James Toyota.
“During the last week of July, Toyota accepted a payment of $3,500 from the Klings to exit the lease, and Toyota assumed ownership of the car,” Joe Sobotka, Kling’s nephew, told us. “The car was returned to Upper James Toyota. Toyota made arrangements to pick up the car from the dealership, and the monthly lease payments stopped. Toyota said the total cost of the lease was $21,566, and they expected to sell the car at auction for $16,000. They said the auction costs are $500, and they agreed to refund $1.671 of the $1.809 cost of the extended warranty, noting part of this coverage was used for an oil change. This left an amount owing of about $4,500, but Toyota offered to accept $3,500 from the Klings.”
Sobotka waited before contacting Action Line to be certain all was good.
“I didn’t let you know sooner because I wanted to verify that the lease payments did stop, that Toyota cashed the cheque, and that there were no further issues raised by Toyota or the dealership.”
When entering into the lease, Kling paid about $3,700 for an extended warranty and freight, delivery and dealer preparation fees. There was also a carry-over charge of $2,656 from a previous lease with the dealer. Those costs inflated his monthly payments and the family was unable to sell the car on the Lease Busters website, despite offering a $2,000 cash incentive.
According to media officer Bob Nichols of the Ministry of Transportation, 26,669 drivers lost their licences in 2013 for medical reasons, the last year for which figures are available.
The Ministry of Government and Consumer Services (MGCS) and the Ontario Motor Vehicle Industry Council (OMVIC) can seldom help consumers caught in such a predicament.
Operations vice-president Ilya Pinassi of Parkway Motors — which operates Upper James Toyota — said he understood this family’s frustration.
“It is our practice to provide multiple options to our clients so the client can make an informed final decision on what works best for them,” he said. “In this case, there was no incentive for either our salesperson or the dealership for Mr. Kling to choose a lease, finance or cash option.”
The dealer appraised the 2014 Corolla at $14,000.
For as little as $5 per month, most consumers can protect themselves from such unexpected out-of-pocket expenses.
If Kling had done business with one of Walkaway Canada Inc.’s 12 Hamilton-Halton area dealers, he could have literally walked away from his obligations within the first year of signing his lease. That’s because the first-year coverage is complimentary to anyone regardless of age.
After 12 months, president Robert Varga of Walkaway says drivers under the age of 79 can protect themselves for as little as $249 for the full term of a seven-year lease or purchase agreement. The most comprehensive coverage costs $1,299 for the full term of the lease or purchase agreement.
“We cover loss of a driver’s licence due to age, illness or injury,” says Varga.
“Negative equity is an epidemic today,” he says. “That’s because terms of contracts are far longer (72 months on average) and little to no money is put down anymore.”
Source: The Hamilton Spectator