6 Ways Dealerships Deceive Their Customers When Leasing a Car
However, for those not familiar with how car leasing works, it sometimes becomes easy to fall prey to deceitful dealerships. Let’s look at some of the most common leasing tricks that are used by some dealers:
1. “Leasing is a better deal than buying because your payments are significantly lower for the same car.”
Yes, lease payments are lower when compared to loan payments for the same vehicle. This allows some dealers to propose leasing as a better deal then purchasing, especially when the customer isn’t familiar with how leasing works. To make the payments even lower, dealers can stretch out the car lease term to five years.
However, leasing won’t work for everyone, especially for those who drive over 15,000 miles annually. But not all dealers will explain this, plus a five year lease on a vehicle with only a three year warranty increases your risk of expensive repairs on a car that you don’t even own. The bottom line, don’t lease a car if you’re not familiar with how leasing works.
2. “Leasing won’t show up as a debt liability on your credit report because it’s similar to renting.”
False. Leasing is not the same as renting and it will show up on your credit report as a debt obligation. So if you miss a payment, just like with a loan, this will damage your credit. You can also have your car repossessed when miss your payments. If you are worried about your debt load than leasing isn’t the solution. On top of this, leasing requires a check of your credit history, same as when purchasing a car with a loan.
3. “The best way to acquire a new car is to lease first and then purchase the car at lease-end.”
Mostly false. Sure, you get lower monthly payments when leasing which enables you to drive a nicer car than you may otherwise be able to afford. But when you decide to purchase the car when the lease ends, this adds additional costs which make the total cost of the lease-then-buy scheme more expensive than just buying the car from the start.
4. “Price rebates and discounts don’t apply to leasing.”
As we already mentioned, many dealers take advantage of customers who aren’t familiar with leasing. Many of them will state that leasing always strictly based on the sticker price. This is false. Leasing has discounts, rebates, and can be negotiated. The only thing to keep in mind is that certain rebates don’t apply to special lease deals.
5. “The lease price doesn’t matter because we sell the car to the lease company and they lease it back to you for the payment you want.”
This is complete nonsense. If you hear your dealer say this, it’s probably to go to a different dealership. As we mentioned above, leasing is always based on discounted, negotiated, or rebated price. The monthly payment is in part based on the lease price. Yes, dealers do sell the cars to the lease company, but at the same price that you agree on with the dealer. And your monthly payments will be calculated based on this price.
6. “All our leased cars need to have extended warranties, paint protectant, rust proofing, window etching, and maintenance contracts.”
This is not only deceptive but false. There is not a single company that requires these addons, no matter how hard the dealer may try to convince you. These are simply add-on items that bring high profits to the dealer. You should just refuse these items or refuse to pay for them if they are already on the car.