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Leased Kona EV? Make sure to read every sentence of your lease agreement.

Discussion in 'Hyundai Kona Electric' started by navguy12, Oct 5, 2021.

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  1. Oct 5, 2021 #1
    navguy12

    navguy12 Well-Known Member

    Eastern Ontario
    I made a sidebar observation in this thread:

    https://www.insideevsforum.com/community/index.php?threads/2021-hyundai-kona-may-have-same-battery-issues-as-2019-2020-models.11899/page-9#post-147775

    At least in the Province of Ontario, it has been my experience with long, convoluted lease agreements (Infinity and as of two weeks ago, Honda) that there is one “gotcha” that is never discussed (but one must initial that the clause has been read and understood).

    As expected, when the car is turned back in, it will immediately go to auction.

    As long as the car sells at that auction for at least what the expected lease end residual value was, there is no issue.

    If, however, the car sells at auction for an amount less than the expected lease end residual value, you as the lessee are obligated to pay that difference.

    My advice to anyone who has leased (any) vehicle, read every sentence of the lease agreement.

    In Ontario, these agreements are 10-12 pages long and the subject “gotcha” is buried within the section dealing with what the lessee is legally obligated to pay for at the end of the lease.

    YMMV.
     
    Kirk likes this.

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  2. Oct 5, 2021 #2
    persianrider

    persianrider Member

    That's a pretty big "gotcha"

    Imagine you get into an accident and they repair the car for 5-7k... (these days a simple front bumper/hood/headlight will cost that)

    When "auction" time comes, this will show on the carfax, therefore the resale value will be seen as "less" and you'll end up losing out and having to fork an amount out.... ishhhhhhh not cool

    Although I wonder if this is just a clause to back themselves up "if" needed

    I've never heard any of my friends from Ontario have issues with such a clause on any of their BMW/lease returns
     
    navguy12 likes this.
  3. Oct 5, 2021 #3
    navguy12

    navguy12 Well-Known Member

    Eastern Ontario
    Without actual access to the documents, one could assume your friends vehicles sold at auction for at least what the expected residual amount was for if/if their leases had the clause buried within the text.

    I signed off on my dads lease of his 2021 Honda product with the knowledge that there is a 50/50 chance it will not be worth 52% of its initial value in Sep 2024.

    I am of the opinion (since 2018) that by Q4 of 2023, values of ICE vehicles will become unstable enough that any lender of record for a new ICE vehicle will not recognize that new ICE vehicle as collateral for any loan on said vehicle.

    Anecdotally, my wife thought I was nuts getting an EV in June 2018.

    In August 2021, she bought her Kona EV based on the total EV user experience over the previous three years and told me last month “no regrets and doesn’t miss her ICE car at all”.
     
    electriceddy likes this.
  4. Oct 10, 2021 #4
    Danhen

    Danhen Active Member

    Has anyone ever seen an automobile lease with this kind of clause in the United States, Hyundai or otherwise? How interesting is it that if the car sells for substantially more than the residual value you don’t get a refund…
     
  5. Oct 10, 2021 #5
    navguy12

    navguy12 Well-Known Member

    Eastern Ontario
    An example of how flawed the current franchised dealership model is from the point of view of the customer.
     
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