Leasing Exposed – 8 Ways You Can Protect Yourself
Leasing has changed over the last 25 years. It is ultimately just another way to finance the car. Like all agreements (contracts) the key to happiness is understanding what you are agreeing to. Unfortunately, sometimes the contracts have parts which are buried in the “fine print”. The right thing to do is read the entire contract and question anything you are not comfortable with
The contracts are long, I know but you are going to have 2 or 3 years or more to think about what you are locked into. At the very least skim through by looking at the beginning of each paragraph. By doing this, certain things will catch your attention. I have found that there are 7 things to watch out for that are most commonly “buried” in the content
1. Dealer processing – beware of this! in NY it’s regulated at a flat $75. Border states often put a low payment then whack you for $400 or more to make up the profits.
2. Registration – certain counties add MTA and other fees that you pay based on where you live and register, not where you buy.
3. First payment
4. Rebates with a catch – there are tons of specific rebates. They may put in multiple! For example, military appreciation requires a copy of your military I.D. Don’t have one and your headed for payment hike boot camp.
5. Miles allowed- watch this because it will also have per mile charge if you go over. Look at the total allowed by lease end to see exactly what you are buying.
6. Sales Tax- to be fair they couldn’t put it in the add because it goes by the rate of where you live not where you get the car. It will jump your payment if you roll it in, so make sure you are clear as to what the total out of pocket cash you need for that payment. A 24 month lease at $300/month that requires $2400 out of pocket is actually $400 a month isn’t it.
7. Security deposit – a lot of good places (Northeast Ford) have programs to waive this.
8. Trade in value – Do you know what you got for it? If you do no money but trade in then that is your “out of pocket” some of it goes to fees like 1st payment, Motor vehicle charges and sales tax. You will find a section that itemizes these fees. You will also find a line or sentence that says “cap cost reduction” it’s kind of like down payment. Add those two sections and you have what you actually got for your trade. Like above in number 6 if your payment is only $200 for 24 months on that super expensive truck, BUT your trade is worth $12000 then you are actually paying $700 a month aren’t you?
Because we all live on a budget we want that monthly payment to be affordable, I get it. The point is that it doesn’t matter if you pay more upfront or throughout the lease, understand the answer to what should be the simplest question….. “How much is it?”
My opinion is very strong on this, it may seem like I am trying to condemn other dealers that border on deception, and it seems that way because….. I am. I have no quarrel with a dealership making profit, they have to. I have found that customers like to do business with a successful clean comfortable place. They want a good deal, but they want you to be able to service and care for them after too.
My gripe is being up front about it. What are they afraid of, if the product is good it cost money because it is worth it, not because you are good at the shell game. If the customer wants something unreasonable, you say no. Be proud of what you do, what you sell, and who you are. I have found customers like that, and I think it is the biggest reason I have so many.
Some people are even so kind as to read my content all the way to the last sentence. I really appreciate them.
Hi I’m Lann Rubin, I started in the car business in 1991 with a different approach. Talk to people, answer questions, tell them ALL about the numbers and get them same day service when they need it. For decades you have set records for me, and taken care of my family and crew.
My partner and I opened Northeast Ford to say THANK YOU and to continue taking care of those who carried us all this way………………. YOU!
Check us out at www.fordplegde.com