Leases are entirely a more complex underwriting process than purchases. A straight purchase is a cleaner process for the bank and dealer, where as leasing is more tedious and riskier. But, the lower payments are so attractive to customers, leasing is here to stay and growing.

Lease turn-in fees (disposal fees) are true fees that banks charge, NOT DEALERS. When customers turn in their leases, the banks do have considerable costs in remarketing that vehicle. The lending institution needs to transport that automobile to auction, pay the auction fees to rep the vehicle, as well as pay a person to follow through the entire process. Also, the bank charges for excess mileage, damage, plus wear and tear… AGAIN NOT THE DEALERS. These charges are necessary because mileage and condition directly effects the auction prices of the vehicles.

In addition, the dealers need to store the lease returns on their lots, for anywhere from two weeks to two months until the banks come and pick up the vehicle. Most dealer lots are filled to capacity with their own inventory and most auto dealers need additional storage lots that are offsite to cover their everyday needs. Also, the dealer is responsible through their own insurance for any damage or theft to the lease turn-in vehicle between the time the customer drops off the vehicle until the time the bank picks it up. This is a huge area of liability that becomes a burden for dealers.

In a perfect world, a win-win for the customer and dealer is when the lease buyout matches the wholesale value of the car, truck or SUV. The dealer can then buy the vehicle, giving them a nice used car to sell at retail, and saving the customer that turned the vehicle in from the disposal fee costs.