 |
A dealer has many more opportunities for fraud in an auto lease, compared to a purchase transaction, because consumers are unfamiliar with lease terminology. In truth, leasing is never a better deal than buying. Some examples of common scams include:
Trade-In Value: A typical trick is to tell you that your trade-in car is a "wash" because its value equals its outstanding loan or lease balance. However, the dealer then secretly adds in some of your old loan balance into the new lease. The dealer must disclose any "negative" prior loan or lease balance in the "Itemization of Gross Capitalized Cost" section of the lease. Warning signs that "negative equity" has been added into your lease are if the "Agreed Upon Value of the Vehicle" looks higher than you negotiated, or your contract shows extras like service contracts, alarms, or stereos, that are not actually installed on the vehicle.
Stealing the Trade-In. If you negotiated a positive value for your trade-in, to be applied to your down payment, the full value you negotiated must appear in the "Amount Due at Signing" box. Otherwise, some or all of the value of your trade-in may have been stolen.
Payment Packing. Once you have negotiated a price and an interest rate, the dealer may quote a falsely high monthly payment to you. Then the finance manager later offers you an extra, like an alarm or stereo, telling you it is only a few dollars a month, or free, because you are such a good
customer. He adds in the few extra dollars a month to your monthly payment, but in reality you pay those extra few dollars plus the "pack" which the first employee never told you about. You may be paying thousands of dollars over the life of the loan for worthless add-ons. (This scam occurs in purchase transactions too).
|
|
