How the Lease Commissions are Split?

[oskar27]

Back in February 2013 I took a 3 years lease for my 2013 Edge Limited from dealer A. At the end of the lease I decided to get my new 2016 Edge Titanium from dealer B with a 4 years lease.

 

When the new 2016 Edge arrived at dealer B, I drove my 2013 Edge to dealer A, and they gave me a lift to dealer B (about 30km away) to pick up my new 2016 Edge.

 

Out of curiosity how the commissions are split in the above situation?

[akirby]

They don't split anything. Each dealer gets commission on the vehicles they sell or lease.

[27Sport]

And why wouldn't you just turn in your 2013 at the new dealer?

[oskar27]

I find it strange that dealer A did not get any commission because he had to have inspect my 2013 Edge plus he drove me to the new dealer. All this work for nothing?

 

The salesman at the new dealer had told me when the new Edge arrives I just drive there with my old Edge and drive away with the new one however when the time came the old dealer called me and said my old Edge has to be driven to their place and they will give me a lift to pick up the new one. I didn’t like that but the new dealer confirmed that so I had no choice. Kind of strange but that’s what happened.

[Burrcold]

I find it strange that dealer A did not get any commission because he had to have inspect my 2013 Edge plus he drove me to the new dealer. All this work for nothing?

 

The salesman at the new dealer had told me when the new Edge arrives I just drive there with my old Edge and drive away with the new one however when the time came the old dealer called me and said my old Edge has to be driven to their place and they will give me a lift to pick up the new one. I didnt like that but the new dealer confirmed that so I had no choice. Kind of strange but thats what happened.

You can return it to any dealer. Sounds like your original dealer wanted yours on return to resell it.

[akirby]

All that "work" was paid for in the original sale. Ford may also compensate the dealer for the lease turn in work.

[27Sport]

You can return it to any dealer. Sounds like your original dealer wanted yours on return to resell it.

Here in the States when you turn in your lease it has to go to auction. The dealer you turn it in to cannot keep it, unless they buy you out of the lease early. And I believe they cannot even do that with less than 4 months remaining on the lease.

[oskar27]

I had the same idea that they wanted to keep the car but if it has to go to auction why they didnt let me go to the other dealer and save the money / time to drive me over there to pick up my new car?

[richzx14]

I did an early lease return by 5 months on my 2014 SEL (replaced by 2016 Sport). I was prepared to pay the final 5 months payments and I received a letter from Ford Credit stating the vehicle would go to auction and I would pay (1) the lesser of the 2014 auction sale proceeds compared to fair market value or (2) the remaining 5 month lease payments. As it turned out, they credited me with an extra month month's lease payment which I didn't make. Bottom line I only paid 1 the equivalent of one month's lease payment plus some about $50 in fees vs. the remaining 5 months remaining lease payments. Saved me about $1,300-$1,400. The 2014 had very low mileage, very good options, and was in excellent condition which helped with the auction sales price.

[oskar27]

Who gets the auction price? Is it Ford Credit or the dealer?

[TheWizard]

Here in the States when you turn in your lease it has to go to auction. The dealer you turn it in to cannot keep it, unless they buy you out of the lease early. And I believe they cannot even do that with less than 4 months remaining on the lease.

 

There is no law that says vehicles coming off lease must be auctioned. Auctioning them is common practice only because the actual owner of the leased vehicle is the leasing company (a bank, leasing company or finance division of a vehicle manufacturer) and they usually don't want any inventory of vehicles. But if they did, (perhaps they wanted to add to a fleet of company cars for salesmen or executives) there's nothing keeping them from simply retaining ownership and using the vehicles however they please.

 

 

Who gets the auction price? Is it Ford Credit or the dealer?

 

When sold at auction, the auction price goes to the leasing company not the dealer.

[akirby]

Ford Credit. They own the car, not the dealer.

[akirby]

 

There is no law that says vehicles coming off lease must be auctioned. Auctioning them is common practice only because the actual owner of the leased vehicle is the leasing company (a bank, leasing company or finance division of a vehicle manufacturer) and they usually don't want any inventory of vehicles. But if they did, (perhaps they wanted to add to a fleet of company cars for salesmen or executives) there's nothing keeping them from simply retaining ownership and using the vehicles however they please.

 

It's not a law, it's Ford policy. I believe the idea is they do not want a dealer fudging the lease end paperwork for a vehicle they intended to buy and resell.