Death Is No Excuse For Not Paying Your Car Lease

We’ve written before about people who co-signed a loved one’s loan and were left owing the debt after the borrower passed away before the loan was repaid. But even if you weren’t the co-signer, you might still end up being on the hook for thousands.

The L.A. Times’ David Lazarus has the story of an 81-year-old widow whose husband passed away in December, and who has been hounded by Toyota’s lawyers for more than $2,300 they claim her late husband owes on the leased Prius that she has already returned to the company.

Her husband had signed the lease for the vehicle a year ago. He knew he had prostate cancer at the time, but the widow says the sales rep at the Toyota dealer assured her husband that his eventual passing would quality as an “interruption” of the lease, meaning the Prius would be returned to Toyota and there would be no further lease payments.

And after her husband succumbed to his cancer in December, she contacted Toyota Financial Services which eventually sent out someone to pick up her late spouse’s car.

Then in February, after hearing nothing in the interim from Toyota, the company sends her a letter explaining that the Prius had been sold at auction, but for several thousand dollars less than what had remained on the lease. Not only did Toyota demand that she pay that difference, but it also tossed on hundreds of dollars in fees for repossessing and reconditioning the car.

In total, the bill from Toyota came to $2,352.72.

So she contacted the company to once again explain that her husband was dead and that she was not a co-signer of the lease.

But then she got the bad news that the sales rep had apparently given them bad info. Death is not considered an interruption of the lease, but is actually an “early termination” leaving the lease-holder the obligation to “pay a substantial charge if you end this lease early.”

But again, the widow didn’t co-sign the lease. And she, personally, is not liable for the debt. Even Toyota’s attorneys seemed to agree with that. However, the car company lawyers say her late husband’s estate owes that money, and she’s the one who inherited the estate when he passed.

“The estate is me,” says the widow. “Everything in the estate has gone to me.”

A rep for Toyota’s leasing division tells Lazarus that “This is something that, unfortunately, comes up with leases,” and admits that the widow’s situation is “a tough one.. it’s sad.”

However, Toyota maintains that the request for the $2,352 is “a legitimate claim based on the contract.”

As Lazarus points out, and we agree with, this whole situation could have been handled in a better fashion by the car company.

When the widow contacted Toyota about her husband’s death, it would have been the perfect time to remind her that her late spouse’s death was not the end of the lease and that she’d have to pay the difference between an auction sale price and the value of the lease, or at least that it would cost her $225 to have the Prius repossessed. At the very least, she could have saved that money by having a friend drive her to the dealership.

Whether or not you agree with Toyota’s insistence on being paid, consider this a reminder that death is not always the end of debt, so long as there is someone out there the lender can get the money from.

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