Auto Leasing Scams

Car-leasing has long been thought of as a more alluring alternative to buying, offering the flexibility to drive a new car for less.

In reality, however,leasing is an option that is laden with many pitfalls to the average customer. Regulations on leasing does not require as much disclosure as buying a vehicle. This has allowed many leasing scams to arise that trick the customer into believing they are into a good deal when,effectively, all they are getting is a rough deal supporting the dealer’s terms.

Below are some of these common scams and how to avoid them

Artificially low interest rates:

Man dealers may quote a lower interest rate which when looked at in reality is much higher.

They do this in man ways either by purposefully quoting the money factor as the interest rate or calculating the loan without including some closing
fees, such as a deposit for the security, into the total cost of the loan lease.

Take the money factor for example: this is typically seen as a four decimal digit, something like 0.004. Lease high end used vehicles is very common in todays leasing world and is one of the great deals available.

Some dealers may quote this as a 4% interest rate when in order to get the true figure you need to multiply it by 24 to get a rough idea of the interest
rate on your loan. Using this example, the interest rate is a much higher 9.6% than the “quoted” rate of 4%.

Ensure you investigate the numbers and fully understand the formula used to calculate their interest rate. Keep an eye out for any fees not factored into the calculation.

If you are not entirely satisfied, then do not sign the lease agreement.  Discover car lease specials in todays market. There are some cheap deals. If you think you will not pass any credit checks why not try car finance for bad credit today.

Terminate your lease early for a low penalty

This is an old favourite leasing scam. You ask your dealer how much you will pay if you want to terminate your lease and he tells you: “You want to get out
early? not a problem, you only pay an early termination fee of $600”.

What he is actually quoting is only the small administrative penalty for early termination, there is a much stiffer penalty involved called early termination fee
and this can run into thousands of pounds.

Make sure you are clear not to confuse the early termination administrative penalty with the termination fee.  Read the small print carefully and fully understand what you will get charged should you choose to end yourlease before its scheduled end.

Pay for an extended warranty you don’t need

The best car lease deals offer extended warranty which you may need to take out, talk to the professionals and not just one. do your research.

This is another fragile game to boost the dealer’s profit at your expense.
The dealer slides an extended-warranty into the deal whilst it’s already factored into the monthly payments, or you may be tricked into buying a 36-month
warranty on a 24-month lease.  

It is not neccessary to pay additional money for a warranty already built into your payments or for one that goes beyond your lease term.
They might try slip an extended warranty in. But be aware and do not accept as the warranty is already factored in.

No security deposit

Any dealer who advertises a zero security deposit is not providing you with all the details.
A security deposit will always be factored in the lease under the provision for disposition fees.