A car lease promised no buyout fees — but this man couldn’t find a local dealer who would charge less than $1,000

Benjamin Sugarman knew the lease on his Kia Optima was about to expire, and he was ready to buy it.

After reviewing his lease agreement, he knew exactly how much he should be charged to own the car he’d been driving for three years: $0.

But he ended up paying an extra $1,000 at a local dealership.

“I wound up just biting the bullet, because I had no choice,” Sugarman said. “I wanted the car.”

Some consumers in other states, including Florida and Massachusetts, have found themselves in similar situations in recent years.

In November, Florida Attorney General Ashley Moody subpoenaed six car dealerships for documents related to lease buyout fees, and several lawsuits have been filed in the state alleging violations of the Consumer Leasing Act, a federal law that prohibits dealerships from charging fees not disclosed in original lease agreements.

One Palm Beach attorney said he recovered more than $130,000 for customers who had paid such fees.

“I believe the dealers in Pennsylvania are taking advantage of customers by imposing these fees and charges that are not in a contractual document, a lease,” said Sugarman, a 36-year-old real estate agent from Malvern. “That’s just not OK.”

The Pennsylvania Attorney General’s Office declined to comment on this specific case, but said consumers should report potential violations to their office for investigation.

“We are comfortable saying now that certain fees may be illegal,” a Pennsylvania Attorney General’s Office spokesperson said in a statement. “The lease agreements would likely dictate” whether a fee was legal.

Sugarman had leased cars his whole life, but never bought a leased vehicle before spring 2022.

He loved the way his 2019 Kia Optima drove, with its turbocharged engine, and he had put fewer than 15,000 miles on it over three years due to the pandemic.

“I wasn’t driving my car as often and as far, in terms of various trips and what not, so the miles were pretty low,” Sugarman said. “It was a no-brainer for me to purchase it off of the lease.”

As the lease expiration date approached last year, he said he called Kia’s financing department and was told that he could buy his lease out only through a dealership under Pennsylvania law.

It didn’t need to be the dealership where he had leased the car three years ago, but Sugarman said he decided to go to that dealer, Murray Kia of Conshohocken, thinking it might be easier where he had done business before.

He reached out to the dealership in January 2022. For the next two months, Sugarman exchanged emails with a finance manager for Murray Kia who walked him through the process of buying out the lease and answered Sugarman’s questions.

As he was preparing to make the purchase, Sugarman noticed a charge that was not in the original lease agreement, a document The Inquirer reviewed along with purchase agreements for the buyout.

In a March email, Sugarman wrote: “I’m prepared to proceed with the purchase but request that you please remove the $1,000 ‘Lease Buyout Fee’ since I have a $0 fee as part of my lease.”

The manager replied: “That’s what we charge to purchase your lease out at this dealership. You can go to any PA Kia dealership if you would like.”

Murray Kia of Conshohocken was sold to Raceway Kia last year. Raceway Kia officials did not return repeated requests for comment about whether they had knowledge of the practice.

The Inquirer was able to reach the former finance manager, who said he could not recall the lease-buyout policies at Murray Kia or connect a reporter with anyone else associated with the dealership.

After Sugarman was told that he had to pay an extra $1,000 at Murray Kia, he began to do more research.

“I started contacting other dealers just to see if, A, this was on the up and up and, B, if this is going to be the case everywhere,” Sugarman said.

Some local dealers did not return his calls or messages or told him that he couldn’t buy out his lease at their dealership.

At Jim Sipala Kia of West Chester, a salesperson sent Sugarman the purchase offer for his Optima — and tacked an extra $1,000 onto the price of the vehicle, without specifying it as a line item on the purchase agreement.

The dealership also required a $399 “safety check,” according to a purchase agreement and email exchanges shared with The Inquirer.

The sales manager of Jim Sipala Kia did not return several calls and emails seeking comment.

Since Sugarman was financing his purchase — meaning the extra $1,000 plus interest would be spread out over a few years — he ultimately decided to go back to Murray Kia and buy his car off the lease , he said.

But he still feels as though he was ripped off.

By sharing his story, Sugarman said he hopes to warn people about unknowingly paying these fees. Maybe, he added, it could lead to policy changes, too.

“I’d like to see these charges and these fees be wiped out,” Sugarman said, “and not be permitted by dealers for lease buyouts.”