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There are numerous down sides to leasing a vehicle, such as the scams in leasing of vehicles. Such scams have been found to actually deceive the consumer into making a purchase on the sellers terms which more often than not ends up being much more costly in the long run.
The key is to be aware of these scams, so you can head them off at the pass. Don't let someone take advantage of you, do your homework before you go to the car dealership.
Some dealerships will give a quote of a very small interest rate to the person looking to lease a car. Realistically, the interest rate is far higher than that of the promised amount.
It is possible for the dealership to do this without actually lying by not factoring in some of the other rates that should actually be brought into the equation prior to signing of any of the paperwork. They will generally forget to factor in the security deposit, registration fees, taxes and such.
If a dealer is stating that the interest rate on a lease vehicle is 4%, in decimal form it would look like this 0.004. Realistically, that 4% interest rate should be multiplied by the term of the lease, generally 24 months. When doing this, it is actually an interest rate that is closer to 9.6%, which is much higher than the promised 4%.
To avoid a scam like this, be sure you fully understand everything prior to signing into any contract with a dealer. Be familiar with the formula that is being used on the loan in order to find out exactly how much interest you will be paying on a monthly basis.
Low penalties for early termination of lease, is another scam that is frequently found among car dealerships. Many dealers will say if the lease is terminated early there is a small early termination fee of $300 or so and that’s it. They are not being truthful with you.
There are several other fees that go along with terminating a lease contract. In the vast majority of cases terminating a leased vehicle contract prior to its expiration can cost several thousands of dollars at a minimum. All of the fees will be in that small print on the bottom or back of your contract, be sure you read it carefully before you sign the agreement.
Another interesting scam often found in many dealerships is an extended warranty. This will almost always cost extra on a per month basis. This is just another way the that car dealership has found to receive more money than it should be getting.
This actually raises their profit margins at your expense. For the most part there should already be a warranty price figured into the monthly payments. The most common scam with warranty’s are when the seller tries to get the buyer of a 24 month lease to purchase a 36 month extended warranty.