Most Common Car Leasing Scams
Car leasing has become a quite fashionable thing nowadays. More and more people prefer car leasing to car buying. But the problem is that thousands of car consumers have no idea about car leasing details, and this serves as a privilege for fraudulent auto dealers. Thus, car lessees should be aware of the most common car leasing scams. Here they are;
- The negotiated price of the car or the so-called capitalised cost has a direct impact on the monthly lease payments. After the negotiations are over, the dealer cannot raise the capitalized cost. However, some auto dealers may cheat you by not mentioning the capitalized cost in the car leasing contract thus trying to raise the already negotiated price of the car. The law requires that the negotiated price be stated in the contract. But in most cases the car consumers are not aware of this point. Some car leasers do not even know that they have the right to negotiate the price of the car, and they buy cars paying manufacturer’s suggested retail price.
- If you are paying a down payment or you have equity in a trade-in, you need to make sure these facts are included in the contract. Trade-in equities and down payments are able to reduce your monthly payments. But the thing is many dealers will not inform you about this, and you will be the victim of one of the most common car leasing scams.
- Another common car leasing scam involves hiding real money factor. Car lessees usually get confused when dealing with these numbers. Money factor is the interest rate represented in a fraction. In order to get your interest rate you should multiply the money factor by 2,400 (E.g. if your money factor is 0,003, your interest rate will be 0,003 x 2400=7,2%). Many people do not know this and naturally, they are pressured to pay higher interest rates.
- One of the most common car leasing scams is offering add-ons to the vehicle and asking extra fees for that. These add-ons are mostly unnecessary accessories and equipment the price of which should have been included into the car price.
- And the last of the most common car leasing scams is the one connected with early lease termination fees. As you know early lease termination involves huge amounts of money to be paid. There are lease termination fees which range from $300-$400 and there are also lease termination penalties which can involve thousands and thousands of dollars. Usually a fraudulent auto dealer doesn’t inform the lessee about these termination penalties telling him only about the termination fees.
We hope you will be an educated and careful lessee!