Ford Lease Buyout Ends for EVs
Limiting car lease return options is hardly ever a consumer-friendly move.
In June of 2022, Ford changed its lease agreements, prohibiting the option for customers to purchase their electric vehicles at the conclusion of their lease terms. This change is specific to the Mustang Mach-E crossover, F-150 Lightning pickup truck, and E-Transit van models. This seemingly small change could have a significant impact on shoppers.
What Good Is a Lease Buyout Anyway?
The car market these days is exceptionally fickle due to the volatile microchip shortages and supply chain disruptions. As a result, the demand for cars, new and used, is extremely high, while vehicle inventories remain limited. This has led to skyrocketing used car prices, with sellers profiting from shoppers seeking a new-to-them car as soon as possible.
However, those who leased their cars and agreed to a buyout price for when the term finished were afforded the choice to buy the vehicle at a relative discount compared with current high prices—especially for hybrid and battery-electric vehicles. Furthermore, those who bought out their leases could make a quick buck flipping their cars on the hot used market.
Why Would Ford Put an End to Lease Buyouts?
The official stance from Ford about its new policy is that it wants to keep EVs in its dealer network to maintain control over battery recycling and materials, and to meet its goal of carbon neutrality by 2050. As well, batteries are among the most expensive items in an EV, and being able to recycle old ones from lease returns or end-of-life vehicles may help automakers overcome potential shortages in the future.
While that’s Ford’s official stance, there’s plenty of reading between the lines to see why any automaker wants to keep a tighter grasp on its EVs. Ford may want to benefit from the high prices in the used car market by selling its lease returns. It’s running a business, after all.
Earlier this year, the Blue Oval announced a spin-off division called Ford Model E, which only handles EVs. At the time, the automaker proposed changing its new EV-only division’s sales model to better suit the electric vehicle (EV) market and to help the company reach its carbon footprint goals. This new policy could be a part of those changes, along with a direct-to-consumer model, bypassing dealerships entirely.
Has This Happened Before?
This isn’t the first time an automaker has limited customer options at the end of their leases. Honda, Acura, and General Motors shoppers interested in finding the best offers for their lease return vehicles have also been stifled. These automakers now only allow lease buybacks at their own dealerships. This means buyers looking at alternatives to their below-market lease buyouts by taking Carvana or Carmax offers could be losing out on extra cash.
Tesla has also canceled the buyback option for its lease returns on all leased vehicles delivered on or after April 15, 2022, further normalizing the new policy at Ford (and perhaps setting the industry playbook for EV leases). No matter how you look at it, limiting choices for the shopper certainly doesn’t feel customer-friendly.