Death is considered early termination of a car lease.

[tvguy]

I suspect someone in Toyota PR is going over to Toyota Finance today with a big hammer, and after they hit a few people over the head, Toyota Finance will send someone out to apologize and tell this lady and tell her she doesn't owe a penny.

An attempt to collect $2,352.72 generated tens of thousands of dollars in bad publicity. While it may be legally correct, from an ethical and PR standpoint, this is a classic bonehead mistake.


http://www.latimes.com/business/la-fi-lazarus-20140321,0,2080849.column?track=rss#axzz2wXQPy4IT

 

[wiigirl]

 

[clh2]

I don't see this as much different than parents still owing student loan money that they cosigned for their kids, and the kids passed away.

I am willing to bet that Toyota offered some sort of insurance in case the leasee wouldn't be able to make payments for whatever reason.

Really, you need to know what you are signing.

If I die, the amounts due on my mortgage are still due. Any fees that need to be paid by the seller would still need to be paid. There isn't a "death-forgiveness" clause in my mortgage papers.

May not be a popular opinion, so flame away.

 

[clh2]

I suspect someone in Toyota PR is going over to Toyota Finance today with a big hammer, and after they hit a few people over the head, Toyota Finance will send someone out to apologize and tell this lady and tell her she doesn't owe a penny.

An attempt to collect $2,352.72 generated tens of thousands of dollars in bad publicity. While it may be legally correct, from an ethical and PR standpoint, this is a classic bonehead mistake.


http://www.latimes.com/business/la-fi-lazarus-20140321,0,2080849.column?track=rss#axzz2wXQPy4IT

Forgot the rule!

 

[mom2cinderella]

With a mortgage, there is still ownership of a home that can be sold.

I just skimmed the article but I don't think the problem is that she could no longer make payments,

Death, it turns out, is considered "early termination" of your contract, and that can mean thousands of dollars in penalty fees.

it's that she is being penalized for her husband dying.

 

[tina.tina]

Definitely know what you're signing.

Summary: A salesman told husband death would terminate the lease. Wife called and told them to come get the car. After a few weeks, they pick it up. She thinks it's done.

Later, an attorney/collection agency sends letter asking for fees to be paid related to the "repossession" along with the difference between what was owed and what Toyota recouped by auctioning the car. The letter makes clear that the wife wasn't on the lease. The estate is "who" they are collecting for. As the wife says, she IS they estate.

Sad. The author pointed out that Toyota could have had the local dealership sell the car rather than auction it- probably resulting in a profit rather than leaving over $2,000 owed.

 

[lost*in*cyberspace]

I don't see this as much different than parents still owing student loan money that they cosigned for their kids, and the kids passed away.

.....

FYI, co-signers are only liable for private student loans if the child dies, not government student loans.

Another sob story shading the facts. It's too bad, but the man's estate owes the money. Good for Toyota for standing firm.

 

[HM]

A coworker's young husband died of a massive heart attack while playing basketball years ago. His car was a fairly new lease. She was told she had to keep paying for it through the terms even though her name was not on the lease and no one was driving it.

 

[lost*in*cyberspace]

A coworker's young husband died of a massive heart attack while playing basketball years ago. His car was a fairly new lease. She was told she had to keep paying for it through the terms even though her name was not on the lease and no one was driving it.

Yes, because his estate is responsible for his debts.

 

[MomToOne]

I work in this field a little bit.

Toyota Finance can't force a Dealer to sell a car for them. IF the car had been turned back into the dealer, then the Dealer often would have had the option to purchase the vehicle from Toyota finance and then resell it, keeping any profit on the transaction for themselves. But the dealer doesn't have to buy out the lease, and won't if they don't think they will make a profit on it that will be comparible to any other vehicle they might be able to put in that spot on the car lot - space on car lots is not infinite. Toyota Finance owns the car at that point (and actually legally has since the lease was signed) - and a dealer can't be forced to buy it from them, or to sell it on their behalf (oh, the paperwork nightmare that would entail - trust me!). And this story is even further complicated in that the car wasn't turned into a dealer, they called for Toyota Finance to come pick it up. The story refers to just a "Toyota worker" coming to pick it up, which is horribly vague - that could have been a Toyota Finance worker, or more likely it was a tow company Toyota Finance contracts with. While we like to think of "Toyota" as a great big company, the fact is dealerships are their own companies, not owned by Toyota but by other entities who just have a dealership agreement with Toyota, and they are completely separate from Toyota Finance.

And technically the salesperson was right - death did terminate the lease. You can terminate a lease at any time you want with just a phone call. Just if you do it before the end date, it's an "early termination" which involves all the fees that were incurred. I'm not saying the salesperson wasn't shady when he said this, but I really don't know WHAT was said. The man who leased the car may have just heard what he wanted to hear. Generally dealerships put a hard sell on "gap insurance" on leases that cover this sort of thing, so I actually tend to think maybe the salesperson wasn't being shady. But again, I don't know because I wasn't there and the salesperson's side of the story wasn't presented in the article.

Toyota Finance is out over $2K on this. While it's sad, yes, the estate owes this money. Otherwise, costs like this will just be passed on to you and me as consumers. I'm a liberal - I think we all need to cover for our fellow men on things like health care, food and housing and I will pay higher prices and taxes to do that - but I don't think we all need to cover car leases.

 

[RitaE]

On the surface the story of the 81 year old recently widowed women being "picked on" by the large heartless corporation will always pull at the heartstrings.

But the facts are, from the story the guy took out the lease with full knowledge that he was soon to die. It's hard to make judgement on the validity of the claim of "but the sales person told him it wouldn't matter." Fact is, we haven't heard from the sales person and we can't hear from the guy. The only thing that can accurately be judged is the terms of the lease on paper and his signature. And those items clearly say his estate owes the money.

I think I agree with the statement than from an ethical standpoint it would be nice of Toyota to just call it even. It isn't much money to begin with and considering parts of it are the things like "reconditioning fees" etc, just write it off and pat yourself on the back for being compassionate.

But from a moral standpoint, it really isn't very different than other claims against his estate …. credit cards, the mortgage, doctor's bills. Does anybody ever come back and scream at those people when they try to collect from an estate what is legally their fees?

 

[clh2]

FYI, co-signers are only liable for private student loans if the child dies, not government student loans.

Another sob story shading the facts. It's too bad, but the man's estate owes the money. Good for Toyota for standing firm.

I agree with this, parents are responsible for what they cosigned for. Parents do not cosigned on the government student loans.

 

[lost*in*cyberspace]

I agree with this, parents are responsible for what they cosigned for. Parents do not cosigned on the government student loans.

Parent loans (PLUS loans) are forgiven if the child dies.

Back to the subject; this man's estate must pay all of his debts. Not sure why a car lease debt is so special.

 

[andrews_dad]

This is a car LEASE, not a mortgage or a student loan. They are getting that car back, anyway. It is basically a long term rental deal. I love toyota. In past 10 years we've owned a Maxima, Altima, 4Runner, and two Prius's. Wife is a regional manager and drives a TON to each facility (as in 38,000 miles in past 11 months on the current Prius) and each car has held up to the beating... but this is DUMB!

 

[lost*in*cyberspace]

This is a car LEASE, not a mortgage or a student loan. They are getting that car back, anyway. It is basically a long term rental deal. I love toyota. In past 10 years we've owned a Maxima, Altima, 4Runner, and two Prius's. Wife is a regional manager and drives a TON to each facility (as in 38,000 miles in past 11 months on the current Prius) and each car has held up to the beating... but this is DUMB!

I'm not sure why you consider it "dumb" to make someone honor a signed contract.

It would be the same scenario if the man had a loan for this car. His estate would still owe the payments. If the wife didn't pay, the car would have been repossessed, the car would be sold, and she'd be liable for any money left on the loan (if any after the sale).

 

[tvguy]

Parent loans (PLUS loans) are forgiven if the child dies.

Back to the subject; this man's estate must pay all of his debts. Not sure why a car lease debt is so special.

Yup perfectly legal. But absoutely horrible business practice. And a marketing nightmare. Given this weeks $1 billion dollar fine Toyota paid, certainly makes me think about whether I want to do business with a company that has this mindset.

 

[Iowajes]

Seems to me that Toyota is absolutely right in this one.

Isn't part of marriage that you are on the hook for debts accrued by the other person during your marriage? (Depending on the state, possibly not before, but possibly that too.)

Just because he was the only one to sign the lease, I don't know why she would think she doesn't have to honor her husband's commitment as the spouse, and certainly as his 'estate'.

 

[bumbershoot]

""The estate is me," she said. "Everything in the estate has gone to me""


She's wrong. She's also lucky that there IS an estate. My MIL wasn't so lucky, she didn't even get life insurance (everyone thought she would die first so they diet have it on 10 years older FIL). Of course that meant there was nothing for his debts, which made things simple but embarrassed her tremendously. She did insist on paying the IRS debts he had incurred by not filing for 6 years but telling her he had (that was so fun to discover), and refuses to file injured/innocent spouse. Should I contact the papers about the IRS debt that's legally here but morally not? Nah.

Anyway, the estate isn't hers until the debts are done. This was a debt of his.


After my mom died stepdad didn't need the two leased Jettas and turned one in a year or two early. While I don't know if there was a fee, if there was I'm sure he paid it. She had an estate and that would have been a debt.

Does being in a community property state factor into a lease?

 

[carmelhp]

Seems to me that Toyota is absolutely right in this one.

Isn't part of marriage that you are on the hook for debts accrued by the other person during your marriage? (Depending on the state, possibly not before, but possibly that too.)

Just because he was the only one to sign the lease, I don't know why she would think she doesn't have to honor her husband's commitment as the spouse, and certainly as his 'estate'.

No, she is not "on the hook" so to speak. If the charges are legit, and that's a big "if," then the estate, if any, is liable. There may be no estate if everything was owned jointly, except the car, and it all passed to her outside probate, as a survivor or beneficiary, depending on state law.

 

[tvguy]

Okay, here is something that doesn't add up to me.
He had the car a year.
He had a 3 year lease.
He still owed $27,470.68 on the lease.
What? That's more than the car should have SOLD for, not counting the 9 to 12 payments he had already made, and he was LEASING it, not buying it.
That's a lease payment of over $1,100 a month.
Looking at the local Toyota dealer website, that car leases for $149 a month with $2,999 down for 24 months for a total of payments of $6,575, NOT $27,000+