Louis Ehrlich of Boynton Beach, Fla. had never leased a car before. He had always purchased his vehicles outright.
But since he’s 94, he thought leasing might be a good option. So earlier this year, he ventured to a Broward County, Fla. car dealer, where he traded in his 1993 Lexus as part of the deal.
After the negotiations and signing a two-year lease he describes being “as long as a newspaper page” with a lot of fine print, Ehrlich said he wasn’t given as much for his trade-in as he was told.
“The salesman was so nice. He acted like he was my best friend,” Ehrlich said.
When all was said and done, he said he’s sorry he leased because the process was confusing.
The Palm Beach Post recently has received a number of calls from people in their 90s and from their relatives about their car-leasing experiences.
A Texas man called, saying he was upset to learn his 95-year-old mother, who lives in Palm Beach County, signed a four-year lease. He’s not sure she should be driving and felt like she had been taken advantage of.
Another Florida resident in his 90s asked how he could get out of the lease he signed after being “worn down” during a five-hour ordeal at the car dealer.
Al Payne, regional director of Seniors vs. Crime, a project of the Florida Attorney General’s Office, said he has received numerous phone calls from seniors who leased vehicles and then regretted it. Payne said that often, the callers have signed a contract without reading it.
“Read your contract before you put your signature on it,” Payne said.
Most people assume leasing a car is similar to renting, but leasing is simply another method of financing a vehicle, said Gregg Fidan of RealCarTips.com.
“Most dealers will give you a fair deal if you are informed. If they sense you have not done your research and can take advantage of you, they will. There are so many numbers and things like residual values and capitalized costs,” Fidan said.
Fidan recommends going through the nonprofit Checkbook.org and using its LeaseWise service. The fee is $350, and the company obtains bids from dealerships in your area and negotiates the best lease on your behalf. Checkbook.org can be reached at 1-800-475-7283.
Car Leasing Scam Warnings:
Due to the confusing nature of leasing, many dealers will change the numbers around in the contract and literally steal money from you. To prevent this, understand terms such as capitalized cost (the purchase price of the car).
Many car shoppers don’t realize they need to negotiate the purchase price of the car when leasing, so they leave it up to the dealer and end up paying the full sticker price.
A dealer can misrepresent the money factor, which is basically the interest rate shown as a decimal. To convert it to an interest rate you’re familiar with, you need to multiply by 2,400.
Add-ons such as pin striping or extended warranties can be hidden in the lease agreement, usually in the capitalized costs. You don’t need an extended warranty since the manufacturer warranty usually covers everything during the short duration of the lease.
Watch out for double first payments. Leases usually require you to make the first monthly payment up front, but sometimes the down payment includes this; other times it doesn’t. Make sure you are not paying it twice.