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Net Sale Proceeds

Dealers should not use the term “net sale proceeds” to make the consumer lessee liable for expenses incurred by the dealer for disposing of the vehicle.

For example, if the lessor sells the vehicle at auction for $5,000 and pays an auction fee of $300, the realizable value is $5,000 (not $4,700).

The only way the lessor can recover the $300 is by having disclosed it on the original lease agreement as a separate fee, and incorporating that into the “cost of borrowing” (i.e., if auction fees or costs of inspection were included as lease-end charges in the lease agreement).