Consumer complaint received 2023-01-12
Company: HYUNDAI CAPITAL AMERICA
State: NC
Product: Vehicle loan or lease
Sub-product: Lease
Issue: Problems at the end of the loan or lease
Sub-issue: Termination fees or other problem when ending the lease early

Complaint:
In XX/XX/XXXX, I purchased a new XXXX XXXX XXXX automobile from XXXX XXXX on XXXX XXXX XXXX. in XXXX. According to the lease, the gross capitalized cost was {$32000.00}, and the agreed upon value of the vehicle was {$30000.00}. In order to lower my monthly payments, I put {$5000.00} cash down on the car. This was entirely discretionary ; it was NOT required under the lease. The adjusted capitalized cost of the car was {$26000.00}, after the original cost was reduced by my {$5000.00} cash down and other incentives/rebates. I financed the {$26000.00} through Hyundai Capital America/Kia Finance* ( `` Hyundai '' ) XXXX and my base monthly payment was calculated based on that number. ( Note : It is my understanding that Hyundai owns Kia. ) On XXXX XXXX XXXX, I was in car accident and my car was declared totaled. The other driver accepted full responsibility for the accident. I immediately reported the accident to my insurance company, XXXX XXXX XXXX XXXX XXXX XXXX XXXX '' XXXX, as did the other driver to her insurance company. 

XXXX had my car valued and the evaluation report showed that the actual cash value of the car at the time of the accident was {$30000.00}, while the actual net settlement amount ( which took into account 3 % tax, registration fee and title fee ) was to be XXXX. When XXXX informed me that they intended to send a settlement check to Hyundai in the amount of {$30000.00}, I objected and said that that amount should be reduced by my cash down payment of {$5000.00} because, otherwise Hyundai would obtain a windfall of {$5000.00} and I would lose {$5000.00}. XXXX told me that I would have to take this up with Hyundai. 

I called Hyundai ( actually its Kia Finance division ), and was told that, under the lease contract, they were due my {$5000.00} cash down payment -- even though this was MORE than the outstanding balance on the loan, would OVERCOMPENSATE them for the car by {$5000.00}, and cause me to lose {$5000.00} without any fault on my part -- because in situations such as this, they were not only due the outstanding balance on the loan ( which would make them whole ), but also any money I put down in cash -- even though this caused the settlement amount to be GREATER than the outstanding loaned amount. In support of this position, they pointed to a provision in the loan agreement that says " We are entitled to all insurance proceeds for physical damage to or loss of the Vehicle, even if the amount of the proceed exceeds the Adjusted Lease Balance or other amount you owe under this Lease. '' The lease agreement does not explicitly state that a cash down payment will be lost if the assessed value of a totaled car exceeds the outstanding loan amount, nor would a reasonably intelligent person reading this provision ever think it would be applied in this way. Moreover, this provision -- as applied in this way -- is unclear, without consideration, unethical and fraudulent. 

If Hyundai is allowed to keep my {$5000.00} cash down payment, they will be unjustly enriched, since this money makes them MORE than whole, while it leaves me unjustly damaged through no fault of my own. I have had several conversations with Hyundai ( as well as XXXX ), and they have been to no avail. 

One final point : I leased a XXXX XXXX XXXX from the same dealer at the end of XX/XX/XXXX. When I did, I asked if my {$5000.00} cash down payment on the XXXX XXXX XXXX would transfer over to the XXXX car, and I was told that it would not since the XXXX car would be covered under a new account. At no point was I told that this was so because Hyundai would take the position that my {$5000.00} cash down payment would be lost, even though this OVERCOMPENSATED them for the car. ( In fact, the XXXX dealer told me that if I had purchased the car before the accident, my pay off amount would the something in the neighborhood of {$24000.00}. ) Thus the XXXX dealer took ANOTHER {$5000.00} cash down payment on the new car. This was unethical, as well as being unjust, because, as the XXXX dealer later told me, he knew Hyundai would " scoop up '' my {$5000.00} cash down payment as if it was their own. 

Can you help me fight this unethical and fraudulent practice?

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