Has anyone sold their leases Model 3 to a dealer? [as of 10/28/21 not possible any longer]

[CapeOne]

Not sure where to find these "lease documents" they refer too. The only item they give you is the lease contract.

If you don't have anything in writing, there's little you can do. The Tesla website (see below) qualified the third party dealer selling option as "depending on what is allowed under the lease contract." While #10 and #26 on MS and MX lease contracts outline purchase option and costs and M3 and MY lease contracts state there is no purchase option, I have not seen any Tesla lease contract that addresses selling directly to third party dealers.

 

[Scrannel]

Right, but I believe what's missing in all this is the anti-trust "restraint of trade" clause.

1. I lease a property (house, apartment) specifically to sub-let, Airbnb, etc. That is, to make $.
2. Property owner agrees but but does not include in original lease contract.
3. I ask for clarification and he/she sends me a letter stating sub-let was OK.
4. That letter is valid.

When Apple and AT&T wanted to keep iPhone users from changing to T-Mobile (eg) even though the users had agreed to Apple and AT&T's restrictions, the courts ruled that their mutual agreement (their contract) was invalid to begin with because it was a defacto restrain of trade. So even though the users agreed to AT&T's/Apple's "lock-in", the courts said the contract itself was invalid. An agreement that violates existing law is invalid to begin with. Again, I am not a lawyer.

 

[Scrannel]

Let's say Willard leases a Tesla betting that between Covid and the chip shortage, he will be able to sell the car to a dealer in a couple years for a profit and still pay off the lease. Two years later Tesla (and others) suddenly realize THEY can make a profit in the used market and change their rules. I suspect that is a violation of the "restrain of trade" clause. And, not just for Tesla. I am not a lawyer.

 

[CapeOne]

Let's say Willard leases a Tesla betting that between Covid and the chip shortage, he will be able to sell the car to a dealer in a couple years for a profit and still pay off the lease. Two years later Tesla (and others) suddenly realize THEY can make a profit in the used market and change their rules. I suspect that is a violation of the "restrain of trade" clause. And, not just for Tesla. I am not a lawyer.

Contents of M3 Tesla lease contracts that have been posted here clearly state that the lessee has no purchase options/rights to the car. The ability to sell the car directly to a third party dealer appears to have essentially been a temporary "courtesy offer" or "incentive" from Tesla. The manufacturer or leasing company owns the vehicle and lays out the lessee's rights in the contract. They are not obligated to allow the lessee to buy the car (although most do) or sell directly to a third party dealer UNLESS that is put in writing in the contract or some other related agreement.

Back in the late 1990s when General Motors offered the EV1, it was lease only with no option for the lessee to buy it and/or sell to anyone.

It would not be an antitrust violation for the lessor to take away an offer for a lessee to sell the lessor's car to a third party dealer but it would be a breach of contract if that option/right was included in the contract (or related agreement) and they took it away.

I think the lesson here is to get detailed confirmation (preferably in writing) about any element of a lease or purchase that is important to you. Never assume that just because an "offer" is available now that it will be good indefinitely UNLESS it is specifically part of the signed contract.

 

[Scrannel]

It wasn't just a temporary courtesy. Remember Honda and others made the same offer and now, like Tesla, are retracting it. And I disagree, it could well be a "restraint of trade" issue, and thus, anti-trust. I want to make a profit based on Tesla's agreement. I go forward but Tesla later decides to -- essentially -- negate that part of the agreement I was counting on to make a profit. "I bought the car because you said I could sell it. Then you changed your mind." I believe that is restraint of trade. Let's see what lawyers say.

 

[Kairide]

It wasn't just a temporary courtesy. Remember Honda and others made the same offer and now, like Tesla, are retracting it. And I disagree, it could well be a "restraint of trade" issue, and thus, anti-trust. I want to make a profit based on Tesla's agreement. I go forward but Tesla later decides to -- essentially -- negate that part of the agreement I was counting on to make a profit. "I bought the car because you said I could sell it. Then you changed your mind." I believe that is restraint of trade. Let's see what lawyers say.

I am still confused why those who leased a M3 or MY are upset now that they can't sell their leased vehicles to a third party dealer. You knew that you had no rights to purchase the vehicle at any time during or after the lease was over. Yes, Tesla did allow third party sales of leased M3 and MY vehicles previously, but that was as a courtesy, but not an obligation as stated in the lease contract. Everyone who signed the lease paperwork agreed to this. Yes, the market has unexpectedly changed, but that doesn't mean you can freewill and interpret your contracts anyway you want so you can make an easy buck.

Imagine if the manufacturers decided to change the residuals in the signed lease contracts to match the current market. Obviously they wouldn't do that since they know the contracts were signed and can't be changed unless both parties agree. They got the short end of the stick for any lease that is ending during the pandemic and have to suck it up.

Have fun taking all the car manufacturers to court, I'm sure it will be an easy win.

 

[DiamondM]

I am still confused why those who leased a M3 or MY are upset now that they can't sell their leased vehicles to a third party dealer. You knew that you had no rights to purchase the vehicle at any time during or after the lease was over. Yes, Tesla did allow third party sales of leased M3 and MY vehicles previously, but that was as a courtesy, but not an obligation as stated in the lease contract. Everyone who signed the lease paperwork agreed to this. Yes, the market has unexpectedly changed, but that doesn't mean you can freewill and interpret your contracts anyway you want so you can make an easy buck.

Imagine if the manufacturers decided to change the residuals in the signed lease contracts to match the current market. Obviously they wouldn't do that since they know the contracts were signed and can't be changed unless both parties agree. They got the short end of the stick for any lease that is ending during the pandemic and have to suck it up.

Have fun taking all the car manufacturers to court, I'm sure it will be an easy win.

No one is arguing the fact about trying to purchase the car. The debate in question is about selling to a 3rd party dealer.
Its clearly states that the leasee cannot purchase the car at the end of the term. In this case the Lesee is not purchasing but selling.

 

[CapeOne]

It wasn't just a temporary courtesy. Remember Honda and others made the same offer and now, like Tesla, are retracting it. And I disagree, it could well be a "restraint of trade" issue, and thus, anti-trust. I want to make a profit based on Tesla's agreement. I go forward but Tesla later decides to -- essentially -- negate that part of the agreement I was counting on to make a profit. "I bought the car because you said I could sell it. Then you changed your mind." I believe that is restraint of trade. Let's see what lawyers say.

Lessors are under no obligation to allow lessees to buy their car or sell it to another dealer UNLESS it appears in the contract. Since not allowing a lessee to sell the lessor's car to third party dealers isn't an antitrust violation, allowing it and then not allowing it wouldn't be either.

Given that Tesla qualified selling to third party dealers as dependent on “what is allowed in the lease contract”, the lease contract becomes the relevant/binding factor. If it is not addressed in the lease contract, the "selling to third party dealer" statement essentially becomes an illusory promise; although I'm pretty sure Tesla was honoring it through October 28th.

 

[MrFusion]

This whole discussion is a moot point. You can’t buy the car. Only Tesla can take the car back. I knew this when I leased mine. I’ve sold numerous other leased cars to other dealers in the past, but when I leased my 3 I knew I would be keeping it for the entire lease term since there wasn’t any way out. That’s why I only leased it for 2 years instead of 3.

For a great example of this just look back to the GM EV1. They were all leased with no purchase option. That’s why nobody has an EV1 today.

 

[CapeOne]

This whole discussion is a moot point. You can’t buy the car. Only Tesla can take the car back. I knew this when I leased mine. I’ve sold numerous other leased cars to other dealers in the past, but when I leased my 3 I knew I would be keeping it for the entire lease term since there wasn’t any way out. That’s why I only leased it for 2 years instead of 3.

For a great example of this just look back to the GM EV1. They were all leased with no purchase option. That’s why nobody has an EV1 today.

I mentioned the EV1 in one of my previous posts but I think what some are getting hung up on here is Tesla's (former) statements that M3 and MY lessees may be able to sell to third party dealers. The lessee not being able to buy the car themselves is an unrelated issue that no one seems to be disputing.

What I have been trying to point out is that if Tesla qualified the "selling to third party dealers" statement as being dependent on what's in the contract, the contract further becomes the relevant/binding factor. If it’s not addressed in the contract (and it doesn't appear to be in any I've seen), the statement essentially becomes an illusory promise.

 

[Scrannel]

Can Tesla say whatever they want? Yes. Can Tesla do whatever they want? No. Because there's a thing called law. When Apple & AT&T tried to keep customer's iPhones locked to AT&T they cited the written contract between users and AT&T. They still lost. Why? Because the entire arrangement -- once challenged -- was deemed to be restraint of trade. Is this the case with Tesla? I don't know. At least I'll admit it.

 

[Kairide]

No one is arguing the fact about trying to purchase the car. The debate in question is about selling to a 3rd party dealer.
Its clearly states that the leasee cannot purchase the car at the end of the term. In this case the Lesee is not purchasing but selling.

Tesla now says the leasee cannot sell to a third party. Selling to a third party is not part of the lease agreement, therefore Tesla does not have to allow it. As the owner of the vehicles, Tesla can say they want them back at the end of the lease.

Can Tesla say whatever they want? Yes. Can Tesla do whatever they want? No. Because there's a thing called law. When Apple & AT&T tried to keep customer's iPhones locked to AT&T they cited the written contract between users and AT&T. They still lost. Why? Because the entire arrangement -- once challenged -- was deemed to be restraint of trade. Is this the case with Tesla? I don't know. At least I'll admit it.

There is law, but courts also look at common sense and things that should be known.

Example: When you sign a lease to rent a house you are agreeing to live in the house for a certain period of time, for a certain amount of money. Usually there's verbiage about not allowing sub-leasing, but there's no statements about selling the house as it's inferred that you aren't the owner therefore you have no right to sell it at the end of your lease.

Same with Tesla M3 and MY. It isn't stated that you are allowed to sell the leased vehicle in the lease agreement. Therefore it's up to the owner (Tesla) to decide if they want to allow it or not.

Relating this to locking a cellphone to a carrier is not even in the same ballpark when it comes to setting precedence. Tesla isn't saying you can only drive on roads made by Tesla or charging at Tesla Super chargers only. They are saying when your lease is over, they want their vehicles back.

 

[Gauss Guzzler]

Was Apple leasing those phones?

 

[Scrannel]

Apple claimed because they had a contract with the owners the contract would prevail. Apple didn't own AT&T either. The problem for Apple was. they promised AT&T an exclusive for the iPhone in exchange for a % of each owner's contract plus, of course, the iPhone sale itself. Know what? I'll ask my lawyer, he's on retainer.

 

[MrFusion]

Apple claimed because they had a contract with the owners the contract would prevail. Apple didn't own AT&T either. The problem for Apple was. they promised AT&T an exclusive for the iPhone in exchange for a % of each owner's contract plus, of course, the iPhone sale itself. Know what? I'll ask my lawyer, he's on retainer.

Apple didn’t own the phones either. Big difference. In this case Tesla owns the car.

 

[Scrannel]

OK, take this for what it's worth. This is NOT a legal opinion. Spoke with my lawyer who does a lot of contract law, but he's in the entertainment side, nothing to do with cars. So, take this for what it's worth: basically there's such a thing as "expectations" (I do not know if that is a legal term.) So, let's say you leased a car and, after signing the contact, went to pick it up and it had no wheels. Since, of course, your general expectation was it would have wheels (one could even say a long-standing industry standard), the dealer would have to put wheels on the car or the contract is void. First thing to note here is that, though the contract is silent on condition etc., it does not always prevail. You are expecting a new car, ready to drive. They can't say: "Where does it say that in the contract."

HOWEVER... if the car was openly advertised or shown on their site as coming with NO WHEELS -- let's say it was for racing car use, whatever -- then YOU would have to put wheels on it. Again. lease is silent on condition and so forth and, YES, a decision can be based on outside the contract info. (The contract will be found to be irrelevant unless it speaks specifically to the issue). What you would be rightfully expecting, PROBABLY prevails

He reminded me of the guy who sued a fast food chain because the food they served him did not look like food shown on the menu. And, he won. In other words, any information as to the "state" of anything advertised, sold, leased etc., can be used to make the manufacturer/supplier do what they said they were going to do. Contract does not always prevail, and ownership has nothing to do with it.

So... what does he think about this situation in particular? Again, I am not a lawyer and he is in entertainment law. He is guessing to say they can't do that. He also brought up anti-trust. Obviously the companies that are doing this want to make the profit (windfall) you would have realized. He thinks that's restraint of trade. But of course, you'll have to sue them. This comment does NOT represent a legal opinion and I am not a lawyer. You would need to engage an attorney familiar with the case law because, for all we know, something like this may have been litigated in the past, so there may be legal precedence. FWIW

 

[CapeOne]

OK, take this for what it's worth. This is NOT a legal opinion.

An interesting perspective, however I don't know that everyone who leases a car should (laws can vary by state) or does automatically expect to be able to sell it directly to a third party dealer. It’s basically suggesting that there’s an implied contract in car leases that the lessee can sell directly to third party dealers unless stated otherwise in the written contract.

 

[DiamondM]

Tesla also implied it could be done and the vehicle was purchased under the assumption it could be done.
One would have to assume there are other pending lawsuits on this topic since 4 or so mfg have also gone to this policy
w/out notice. Or maybe these are baseless claims and suing would result in no outcome. Who knows..

 

[MP3Mike]

Tesla also implied it could be done and the vehicle was purchased under the assumption it could be done.
One would have to assume there are other pending lawsuits on this topic since 4 or so mfg have also gone to this policy
w/out notice. Or maybe these are baseless claims and suing would result in no outcome. Who knows..

Even if someone took it to court and they won, what would they actually win? The lease doesn't have anything in it specifying the buy-out value/calculation. So even if you could force Tesla to make an offer to sell the vehicle, they could say they want $200,000 for it. Which no third-party dealer would agree to.

I just can't see this going anywhere.

 

[CapeOne]

Tesla also implied it could be done and the vehicle was purchased under the assumption it could be done.
One would have to assume there are other pending lawsuits on this topic since 4 or so mfg have also gone to this policy
w/out notice. Or maybe these are baseless claims and suing would result in no outcome. Who knows..

Just because something can be done or has been done in the past does not automatically obligate a company to do it for everyone or in all circumstances now or in the future. In these cases, it can really boil down to what is considered reasonable and customary.

I would definitely consider the lessee being able to purchase the car at lease end as reasonable and customary which I assume is a (legal) reason why Tesla explicitly addresses that in the contract by stating it's not allowed. I'm not sure that being able to sell directly to a third party dealer would be considered reasonable and customary. That's something the "courts" would have to decide.