Consumer complaint received 2023-08-08
Company: HYUNDAI CAPITAL AMERICA
State: ND
Product: Vehicle loan or lease
Sub-product: Lease
Issue: Problems at the end of the loan or lease
Sub-issue: Problem with paying off the loan

Complaint:
This problem involves a complaint I have by me to Kia Motor Finance. On XX/XX/XXXX XXXX I signed a lease agreement with Kia Motor Finance in order to finance a XXXX Kia XXXX. The pages of the document will be attached. The vehicle was involved in a total loss incident on XX/XX/XXXX. My insurance has gotten a letter of guarantee for the title, they have sent Kia Motor Finance the requested amount of {$35000.00}. 

From that point I have called Kia Motor Finance twice asking about what the residual value of the vehicle should be and what equity I should get back. I have called twice, talked to a supervisor twice and received no definitive answer on the amount that I should be owed back as equity of the vehicle. Two different supervisors were unable to read or understand the terms of the contract as it relates to total loss. They pretended like Early Termination of a lease contract as it relates to Total Loss isn't in the lease contract. It is. I've read it. I've spent over two hours separately trying to get their supervisors to understand that, in the lease contract, there are conditions to total loss and there are numbers and letters and terms that they could very easily follow along to get to the same conclusion that I did, but they refused to do that. They refused to state any possible amount and brushed it off as if a different department handles total loss, and that they're incapable of performing simple math calculations. I had asked them if I could have faith that they will honor the letter of the contract that I signed with Kia Motor Finance as it relates to the terms and conditions of a total loss event. Turns out they could not verbally commit to that. That's not even the complaint. 

My complaint is that the check that they have sent me for a " XXXX XXXX '' is short by over {$1500.00} from what it should be based on the terms outlined in the contract. In the event of a total loss as outlined in Section 25A ( LOSS OF VEHICLE ) of Kia Motor Finance 's Motor Vehicle Lease Agreement, it refers to Section 22C ( i ) ( c ), which states that, " if this lease is terminated in connection with a total loss, the early termination charge you owe will be the Standard Formula, minus the early termination fee referenced in Section 22C ( i ) ( x ) ( 2 ) ''.

The Standard Formula as outlined in Section 22C ( i ) ( x ) is " The sum of ( 1 ) the difference, if any, between the Adjusted Lease Balance and the Vehicle 's Realized Value.. '' Okay, so what's my Adjusted Lease Balance? It's right here in Section 22D. ADJUSTED LEASE BALANCE. It's " the Adjusted Capitalized Cost disclosed on page 2 of this lease, less all depreciation and other amortized amounts accrued up to the termination date calculated by the Constant Yield Method. " Constant Yield Method means the method of determining the rent charge portion of each base monthly payment ... '' The rest of the wording will be attached below.

Okay, so what's my Adjusted Lease Balance? From the wording of the contract, it should be my Adjusted Capitalized Cost, which is on page 2, {$32000.00}, MINUS all the monthly payments I have made on the vehicle thus far, which is 17 payments in the amount of {$340.00}. This amount totals {$5800.00}. So my Adjusted Lease Balance at the end of my last payments before the vehicle was considered a total loss should be {$26000.00}.

In Section 22C ( i ) ( c ) EARLY TERMINATION LIABILITY : Early Termination in connection with a Total Loss, the early termination charge you owe will be the Standard Formula minus the early termination fee.

Okay, so in order to release the title of the vehicle in relation to a total loss, I will owe the difference between my adjusted lease value, and the vehicle 's realized value. My insurance got the Letter of Guarantee for the amount of {$35000.00} and sent off the check for the amount of {$35000.00}. The difference between the Vehicle 's Realized Value and the Adjusted Lease Balance ( Vehicle 's Realized Value which my insurance paid out ) is {$35000.00} - {$26000.00} = {$8300.00}.

My insurance overpaid for Kia Motor Finance 's Letter of Guarantee by over {$8000.00}. That's the equity of the vehicle that I should receive. That's the amount that should be REFUNDED to me, as the person who signed the contract with Kia Motor Corporation. If my insurance paid out under the amount of {$26000.00} I would have been left to pay off the remainder!

Kia Motor Corporation sent me a check as a refund in the amount of {$6800.00}. This is the wrong number. They have provided no explanation for how they do their calculations or how they have determined this amount because it surely isn't conducted following the letter of the contract I signed with them.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation