My question involves a consumer law issue in the State of: California/Hawaii
I could really use some advice. This is the situation: We leased 2 cars over 2-1/2 years ago from Toyota in the state of CA; we have 2+ years left to go on the leases. We never intended to leave CA but due to issues with our home mortgage, we are short selling and leaving to Hawaii where I have family who will help with childcare, etc. After a brief conversation with Toyota agent, we assumed all was good to go and that we could take our cars until I heard otherwise from a few web forums on car shipments. So I called Toyota Financial again and sure enough they said we cannot move them out of the continental US. They told me to write a letter of explanation and perhaps we could get an exception. We tried this but we have not received any exception.
I did find out from the 2 major car shippers that I can take the cars TO Hawaii without a letter from the lien holder (just current registration). However, it is upon the return, that I would need a letter of permission from the lien holder because there is law in Hawaii that requires anyone leaving the islands to have letter of permission (to avoid their cars from leaving unknowingly). Of course, if I registered the cars in Hawaii, this could also become an issue as I would imagine that Toyota would be notified of the new residency. I had also read that as long the car was registered in another state it was not required to register in Hawaii
We would like to keep paying both loans and move the cars here. However, if they do not agree, we have to make the decision of either 1. Return them back to Toyota early 2. Take them to Hawaii despite the fact we would need a letter upon return (we are thinking we may be able to buy them out in a year or two – just not now) 3. Switch cars with a family member in CA and continuing to pay the lease although we would not be driving the cars.
If we return them early, I have read this constitutes a voluntary repossession which is worse than a short sell as far as long term credit implications. I also realize that we will need to pay the difference in value and the resale prices. In theory this should only be about 15k but I am fearful they will auction them at very low prices causing that gap to increase total payoff now for the 2 cars is 57k.
My question - if we took them too Hawaii, what could Toyota do if they discovered this? Are we breaking a contract or are we breaking a law?
Your advice would be very much appreciated.
Thanks, D

