| e the economic downturn is not beating you up too | | | | will respond dishonestly. |
| badly. Obviously it’s taking its toll on several | | | | I do have a few tips if you are concerned about being |
| sectors of the economy, one of which is car dealers. | | | | switched into a vehicle lease, or if you are confused |
| I would hope that car dealers will fight their way out of | | | | as to whether you will be paying more for a lease |
| the downturn with ethical and honest sales and | | | | than for a purchase. Here are a few tips and pointers: |
| service, and undoubtedly some will. However, there will | | | | 1. Remember that, with a lease, you are not buying the |
| be those that will not, and will turn instead down the | | | | car. You are borrowing it, or renting it, for a longer |
| dark path of deceiving consumers. To prevent against | | | | period of time, and a lease deal actually has much in |
| these dealers and these deceptions, we offer the | | | | common with renting a car. There are often hidden |
| advice and insight as found on my blog and in several | | | | fees at lease end which can make a seemingly |
| articles I have written for many publications. | | | | less-expensive lease actually cost you more. There |
| One area of car dealer fraud that we continue to see | | | | are hidden fees for excess mileage and wear and |
| quite a bit of involves fraud in car leases. Even with | | | | tear to the vehicle. If you know you drive 25,000 miles |
| the credit crunch, dealers are still able to arrange for | | | | a year, then your lease should reflect that you drive |
| financing for car leases, and car leases are frequently | | | | 25,000 miles a year. If you lease a vehicle with a lease |
| more expensive for consumers, although they appear | | | | allowance of 15,000 miles a year, you would be |
| as less expensive on the surface. | | | | penalized severely at lease end for the additional |
| The classic lease fraud is the “bait and | | | | 10,000 miles a year. |
| switch,” where a consumer goes to a dealer to | | | | 2. It would be virtually impossible to describe all of the |
| buy a car and believes he is buying a car, but is | | | | ways in which a lease can be more expensive than a |
| instead switched into a lease. Sometimes dealers will | | | | purchase. First and foremost, you are buying nothing |
| tell consumers that they need to sign up for a lease | | | | other than the use of the vehicle for a period of time |
| “for a short time” to let interest rates | | | | within certain mileage limits, nothing more. You are not |
| come down, or some other malarky, and promise to | | | | buying any ownership interest in the vehicle. Right then |
| change the deal to a purchase deal “in a few | | | | and there, a lease is usually more expensive because |
| weeks.” When the consumer returns “in | | | | you have no trade-in at lease end. Many consumers |
| a few weeks,” the salesperson who negotiated | | | | are confused because they believe they can trade in |
| the lease with him is nowhere to be found and no one | | | | a lease at lease end and receive credit, as if they |
| at the dealer has any interest in changing the | | | | owned the vehicle. This is not true. |
| consumer into the promised purchase transaction. | | | | 3. At lease end, if you have any outstanding obligation |
| There are various reasons why dealers would prefer | | | | on the lease (mileage penalty, condition penalty, unpaid |
| to put you into a lease as opposed to a purchase. For | | | | lease payments), these are often rolled into your next |
| one thing, dealers often get larger incentive bonuses | | | | vehicle purchase or lease. Watch your contract |
| from the leasing companies to put consumers into a | | | | carefully to make sure that you get a fair deal on your |
| lease, so dealers frequently make more money from | | | | next purchase or lease. |
| the lenders on leases. Same with the manufacturers: | | | | 4. I recommend to all of my clients that they not sign |
| depending on what is going on with vehicle inventory, | | | | anything on the spot at the dealership. Take the lease |
| manufacturers will often give dealers incentives to put | | | | or purchase contract home and digest it overnight. |
| consumers into leases instead of purchases. Finally, | | | | Discuss it with a friend or a spouse. Go over it more |
| lease contracts are confusing, permitting dealers to | | | | than once. If consumers took this step alone and |
| throw more curveballs into the lease which result in | | | | nothing more, they would likely avoid much of the fraud |
| higher hidden fees and payments by the consumer. | | | | and monkey business at dealers because they would |
| Currently, as of today, GM sales are off by over 40% | | | | not be signing documents in a pressurized situation, |
| and Ford sales are off by over 30%. I do not know | | | | after having been worn down by hours at the |
| the current status of Chrysler sales, but it’s | | | | dealership. |
| probably similar. GM and Ford are in a position where | | | | If you, or your friends, have any further questions on |
| they, and their dealers, will do just about anything to | | | | leases and the potential for lease frauds, please do not |
| move vehicles off the lot. As stated above, there are | | | | hesitate to contact us. And, if you have been cheated |
| truthfully quite a few dealers who will respond to the | | | | on a lease, please consider us for your attorneys to |
| current pressures with honest ways and means of | | | | resolve the situation. |
| promoting vehicle sales, but there are also those that | | | | |