Interest fee

Nissan allows dealerships to charge $2,500 refurbishment fee on certain lease buyouts

Nissan is allowing dealerships to pass on up to $2,500 in “refurbishment fees” to consumers exercising their option to purchase on a lease. This decision affects lease buyouts where one chooses to have their car factory certified as a CPO vehicle. Previously, the company did not allow these costs to be included in a retail contract.

According to a letter sent to Nissan and Infiniti dealerships, the change took effect March 9 on lease buyouts funded by Nissan Motor Acceptance Company (NMAC) and Infiniti Financial Services (IFS), both captive lenders. Nissan spokesman Dan Passe confirmed the change to CarsDirect this morning, adding:

“This update now allows for a $2,500 cap on customer-approved refurbishment costs. Additionally, reconditioning costs are limited to repairs necessary to meet CPO requirements and do not include CPO certification fees, which are paid by the dealer. So why would anyone even want to have their own car certified?

Nissan sometimes offers special finance rates on certain Certified Pre-Owned vehicles, and financing a lease buyout may provide access to these rates. Mr Passe added: “Certified Pre-Owned (CPO) vehicle certification is NOT a requirement for customers to purchase their lease vehicle and should not be presented as such.”

If you’re not looking to take advantage of CPO rates, getting your car certified may not make sense. After all, being able to get a better interest rate might not mean much if a dealership can now add up to $2,500 in fees for what Nissan calls “rebuild costs approved by the client involved in the certification process”.

Just last month, Infiniti warned dealers of lease buyout issues stemming from questionable practices such as requiring consumers to pay ‘COVID fees’, ‘chip shortage fees’ and refusal to honor lease-purchase quotes. The latest decision appears to be a “cap” on fees that might be justifiable for a small segment of buyers.

Whether or not many dealerships present these fees as “mandatory” remains unclear. However, since Infiniti’s complaints are reportedly coming from the BBB, CFPB and attorneys general, the companies may try to better define some of the costs that dealerships are able to pass on during a period of record profits.

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