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Top 10 Leasing ScamsTM
  1. Secret Price Hike
  2. Disappearing Trade
  3. Quote the Factor As APR
  4. Phony Lease/Buy Comparison
  5. The Undisclosed Acquisition Fee
  1. The Payoff Packing Scheme
  2. The Extended Warranty Rip-Off
  3. The Phantom Options Scam
  4. The Single-Payment Rip-off
  5. Phony Lease Trade-in

Free Bonus Scam: The Call-Back Leasing Scam

2. Disappearing Trade-In

This bold and illegal scam is a big money maker for dishonest dealers. Simply put, part or all of your trade-in value "disappears" and is never applied to the lease. In car salesman lingo, this is referred to as a "home run". In attorney general lingo, this is referred to as "fraud".

How it works: After negotiating a price of $20,000 for a new vehicle, you decide to trade-in your old car which is worth about $2500. You own the vehicle out-right (no loan balance) so your equity is $2500. Instead of calculating the payment based on $17,500 ($20,000 less $2500) or $263 per month, the salesman uses the full $20,000 and comes up with a payment of $345. Your trade equity mysteriously "disappears" in the lease calculations. You might think, "That's a big difference - I would notice that." But to many shoppers who just got done hearing about $589 loan payments,  a $345 per month lease is nothing short of a miracle, and they buy it - hook, line, and sinker. More often than not, the victim never knows what happened and consider themselves satisfied customers.

Variations: The same scam may also show up in the following variations.

  1. Disappearing Down Payment. The salesman does not fully apply your cash down payment (cap reduction payment) to the price of the vehicle.
  2. Cancel the Trade/Down Payment. The salesman fully applies the trade equity or down payment then performs a secret price for about the same amount thus canceling out the effect of the trade or down payment.
  3. Disappearing Rebate. The same as the disappearing Down Payment except it's the rebate that disappears. A note of caution though: not all manufactures will extend rebates to leasing customers. If a salesman tells you that a rebate does not apply to a lease, confirm this by calling the manufacturer's 800 number or by calling other dealers.

Either way you slice it, it's fraud and it's illegal in all 50 states.

How to Prevent: Prevention is essentially the same as Scam #1: Disclosure before negotiating, then check all the numbers yourself. If anything looks fishy, it's probably because it is.


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