“Do you think this is good for the consumer?”
A car salesman says rumor has it Toyota is going to stop allowing third-party payoffs on its leases. Is this true? And what does it mean?
The TikTok creator behind Benzs and Bowties (@benzsandbowties) posted a video about the rumor a few days ago.
“Word on the street is that beginning Oct. 1, Lexus and Toyota Financial will no longer accept third-party payoffs,” he says. “But it goes a step further than that. They will force you back to your original dealer. So that means if you wanted to pay it off, either the dealer you originally got the car from would have to do it or you would have to do it.”
According to Benzs, that means Toyota and Lexus drivers will have less options when it comes to paying off leases going forward.
“So, for example, as of today, if you had a lease through Toyota or Lexus financial, and you wanted to trade it to Mercedes-Benz of North Olmsted, we could pay that off for you up through the end of the month,” he says. “Come Oct. 1, we won’t be able to do that. And if you bought the car in California, you would have to go back to that dealer to get them to pay it off or you could pay it off yourself, of course.”
Benzs says he isn’t sure why Toyota would make this decision.
“A lot of lenders tightened up their rules about payoffs during the Covid era, because inventory was so scarce,” he says. “To be doing all these years later is very curious. Do you think this is good for the consumer? This is gonna really limit what they can do.”
No, this rule changed around 2021.
In the comments section of the video, viewers quickly noted that this specifically applies to leased vehicles.
“This is a little misleading since he only says the word ‘lease’ once towards the end of the video,” one person said. “This is for leases, not purchases.”
It doesn’t seem like Toyota has rolled out a new policy regarding lease payoffs in the recent past or that it has one on the horizon.
According to the Toyota Financial Services booklet, the original dealer is already required to process the return of leased vehicles.
“If you return the vehicle to a third-party dealership, this is an unauthorized return and you remain responsible for all obligations under the lease agreement until we receive the payoff funds and all required documentation, or the vehicle is delivered to a Toyota or Lexus dealer,” the policy states.
In a Reddit thread posted to r/askcarsales five years ago, one person said the policy is really not as restrictive or confusing as it might sound. “You call [Toyota Financial Services]. They email you a document. You upload it to Carvana. TFS does not charge additional costs,” they wrote. “Whatever the buyout is for you is the buyout for everyone. It’s pretty straightforward.”
Motor1 contacted Benzs and Bowties via TikTok comment and direct message for comment. We’ll be sure to update this if he responds.
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