Californian used car dealership Calabasas Luxury Motorcars has had lawsuits against GM and BMW dismissed while settling with Mercedes-Benz over objections to the carmakers’ off-lease buyout policies.
The dealership initially sued BMW, Mercedes-Benz, and their captive finance companies in December 2021, asserting the brands with refusing to allow third-party retailers to buy or accept vehicles on lease as trade-ins. The car manufacturers hit back and said that lessees don’t own their leased vehicles and that the right they have to buy leased models is not transferable.
The first case overseen by a judge was the dealership’s lawsuit against Mercedes-Benz late last year. The two companies ended up reaching a settlement in December 2022 that was accepted by the court on January 25.
During the case, Mercedes Financial told the court that it did permit third-party dealerships to buy out vehicles from lessees but said a customer would need to ask Mercedes for a payoff amount and then share it with the third-party retailer.
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The cases brought against BMW and GM were dismissed, Auto News reports. In the case of Calabasas Luxury Motorcars Vs. BMW, Central District Judge Dolly Gee concluded that the California Vehicle Code states that consumers do not “have an absolute right to trade in a vehicle at the location of their choice, let alone that a competitor has a right to accept certain vehicles as trade-ins.”
After initially filing lawsuits against Mercedes-Benz and BMW in December 2021, the luxury car dealership did the same against GM in September 2022. This case was dismissed on April 10 by U.S. Central District of California Senior Judge Terry Hatter Jr after the dealer demanded an injunction against GM, asking for the court to end GM’s ban on third parties, including non-GM dealerships, from buying out vehicles leased by GM customers. The judge said he couldn’t grant the injunction because Calabasas didn’t explain why the issue couldn’t be resolved with a “legal remedy,” such as monetary damages.
