Recently, NHADA was asked: “Can a dealership charge an administrative fee for helping a customer purchase their vehicle at the end of a lease?”
It’s a practical question. Assisting with a lease buyout can involve considerable staff time coordinating payoffs, arranging financing, and processing titles and registration—with little or no compensation to the dealership.
NHADA referred the question to Hilary Holmes Rheaume of Bernstein, Shur, Sawyer & Nelson, P.A., an NHADA Gold Partner, who provided the following guidance:
'Regulation M under the Consumer Leasing Act requires that a dealer disclose on the lease form all “other fees” that are due at the end of the lease term, which would include any administrative fee. As a result, anything that is not in the initial lease form cannot be collected at the end.'
The key takeaway for members: Under this guidance, a dealership cannot add an administrative fee at lease end if it was not disclosed in the original lease agreement. Calling the charge a “buyout assistance” or “handling” fee does not change that guidance.
Before assessing a fee, dealerships should review both the original lease agreement and the lessor’s requirements. A fee’s inclusion in the lease should not be treated as permission to charge it if the lessor prohibits it.
If you have questions about lease buyouts or other compliance and regulatory matters, don’t hesitate to reach out to NHADA at support@nhada.com. We’re here to help.