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The end of your three year car lease approaches. You have decided not to buy out the car (the residual is just too high, and you want a new car), and intend to turn it in to a dealer. If you are remaining as a loyalist with the same brand, and purchase or lease a new vehicle, it is likely that any "wear and tear" on your old car will be overlooked as you negotiate for your shiny new vehicle.

But what if you are changing brands, and simply turning in your old car to the dealer? Prepare in advance for the potential pitfalls, and know your consumer rights in this situation.

The Pitfalls:  Although your lease agreement will typically require that you pay only for "excessive wear and tear" at the end of the lease, the manufacturer's leasing company (for example, Toyota Financial) tries to define what it means by "excessive wear and tear."  These definitions do not even appear in the lease agreement itself, and are typically contained in a brochure sent to you near the end of your lease.

The finance company's definition of "excessive wear and tear" may include incidental scratches beyond a particular length, small dents, "worn" seats or trim, or tire depth that is a little too shallow.  Be prepared for an aggressive charge back to you after an "inspection," and an unwelcome notice of "what you owe us" – potentially amounting to hundreds, or even thousands, of dollars.  The finance company may even try to base its charge back on a "estimate" of repair costs – without in fact ever actually making repairs or replacements.

How to Prepare: You must at least anticipate a dispute.  Thoroughly clean the car inside and out.  Photograph your car from stem to stern – both still photos and movies.  Photograph a Lincoln head penny upside down in each tire tread to demonstrate remaining depth.  And then save the photos.

Your Rights:  Under New York Law, you have a relatively inexpensive recourse opportunity, in the event you disagree with the excessive wear and tear assessment from the automotive finance company.  The Attorney General has established an arbitration program where you can have your dispute adjudicated locally by a trained arbitrator in an informal hearing.  The filing fee is $75, and if you are successful, the fee will be reimbursed to you by the finance company.

If you can establish by your testimony, and are armed with photos showing inconsequential damage -- the usual things we expect will occur over the course of  driving a car for three years (e.g., door dings, incidental scratches, minor stains, 36,000 miles of tire wear) – you will be in a position to win your case, or settle it with the finance company's representative for a compromise amount.  As a practical matter, we have found in a recent case that if an arbitration is filed and scheduled, the finance company may simply compromise or abandon its claim.  The company is unlikely to want to pay their representative or lawyer to travel to your location, and may have no competing photos, or actual repair invoices to support its claim.

While you may be able to handle an arbitration, or a small claim dispute on your own, the trial lawyers at McConville, Considine, Cooman & Morin, P.C. are prepared to counsel and advise you in preparation for this process.  Our expertise and training in dispute resolution and litigation is also available to you for any situation where you or your business face a serious legal challenge, either as a plaintiff or defendant.  Call one of our experienced civil litigation attorneys, if we can be of service.

This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.