Honda cracks down: No more returning leased cars to others’ lots

  • Honda is the latest automaker to take more control over leases - and boost inventories - by limiting vehicle returns to its own dealer network.
File photo used for representational purpose. (AP)
File photo used for representational purpose.

Honda Motor Co. has a rude surprise for drivers of its leased cars: No more turning in your vehicles to other dealers.

The carmaker said Thursday it will require the drivers with expiring leases to return their vehicles to authorized Honda and Acura dealers and refuse to accept buyouts from unaffiliated dealers or others. Honda cited tight supplies of cars and trucks as a result of shortfalls in critical components and congestion at ports as the economy recovers.

Also check these Cars

Find more Cars
Honda Amaze (HT Auto photo)
Engine Icon1199 cc FuelType IconPetrol
₹ 7.20 Lakhs
Compare
View Offers
Honda City (HT Auto photo)
Engine Icon1498.0 cc FuelType IconPetrol
₹ 11.82 Lakhs
Compare
View Offers
Honda Elevate (HT Auto photo)
Engine Icon1498 cc FuelType IconPetrol
₹ 11 Lakhs
Compare
View Offers
Honda City Hybrid (HT Auto photo)
Engine Icon1498 cc FuelType IconMultiple
₹ 19 Lakhs
Compare
View Offers
Honda Elevate Ev (HT Auto photo)
UPCOMING
₹ 18 Lakhs
Alert Me When Launched
Honda Hr-v (HT Auto photo)
UPCOMING
Engine Icon1198 cc FuelType IconDiesel
₹ 14 Lakhs
Alert Me When Launched

The Japanese company is the latest automaker to take more control over leases -- and boost inventories -- by limiting vehicle returns to its own dealer network. The industry has struggled to meet consumer demand in recent months due to a global shortage of semiconductors, which has curtailed production and lifted prices for used cars.

“Our goal is to make sure our dealers have access to quality pre-owned Honda and Acura vehicles to satisfy the needs of new and returning customers," Petar Vucurevic, a vice president at Honda’s financing arm, said in a statement.

Nationwide, auto inventories stood at about 1.5 million units at the end of May, the equivalent of about 25 days of supply, according to the National Automobile Dealers Association. That’s down from 2.6 million units and 61 days a year ago amid the pandemic, which depressed demand as showrooms closed and consumers sheltered in place.

It’s not uncommon for drivers to get out of their leases by going through a third party -- such as another dealer at a different brand who offers them a good price on a new car and is willing to take the old one off their hands.

The policy change, which Honda will reassess at the end of the year, applies to both existing and new leases, a spokesperson said.

Honda’s not alone in limiting options for drivers of leased vehicles looking to sell to the highest bidder. General Motors Co.’s financial arm introduced a similar policy earlier this month and Toyota Motor Corp. is reviewing its policy on leased vehicles.

While becoming more widespread, the practice is not new: A spokesperson for Ford Motor Co. said the company has refused to accept third-party lease returns for years.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.

First Published Date: 09 Jul 2021, 09:35 AM IST
NEXT ARTICLE BEGINS

Check Latest Offers

Please provide your details to get Personalized Offers

Choose city
+91 | Choose city
Choose city
Select a dealer

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy
Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.