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The Internet offers a quick, efficient way to request auto lease quotes from multiple dealers. We recommend clicking on each of the links below to harvest two or three quotes before setting off to do battle.

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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

7. The Extended Warranty Rip-off

In this scam the salesman sells the customer an over-priced extended warranty on a lease vehicle where the vehicle is under warranty during the entire period of the lease.

How it Works: Extended warranties are high-profit items for any sale. According to a study by the New York Attorney Generals office, dealer markups range from $200 to $900. It is no wonder warranty contracts are pushed so hard - even when they are not needed. Here are some of the bogus arguments and gimmicks salesman will use to trick unsuspecting lease customers into paying big bucks for unneeded warranties.

  1. Pitch: "This special price on the warranty is only available through us at the beginning of the lease. If you decide to buy the car at the end of the lease the warranty will cost you much more."  Translation: "Chances are, you won't buy the car at lease-end, so if you don't buy it from me now, I won't get a bonus."
  2. Pitch: "This is such a good deal, we make it a standard item for all vehicles we sell, even leases." Translation: "All our customers are suckers and we expect no more of you."
  3. Pitch: "This is much more than a warranty. It also covers all of your regular scheduled maintenance and oil changes. It practically pays for itself!" Translation: "The $650 warranty I am selling you will save you $90 on oil changes."
  4. Pitch: "This extended warranty will make your car worth more money at the end of the lease." Translation: "Why should you care? It's not your vehicle."
  5. Pitch: "The warranty is refundable if you turn in the vehicle at the end of lease." Translation: "I'm going to forget to tell you that the refund is prorated from the day that you sign the lease so in effect most of the extended warranty is wasted during the lease period while the vehicle is under the manufacturer's warranty."

How to Prevent:  The first and most important step in avoiding the extended warranty rip-off is simple: Don't sign a lease for longer than the manufacturer's warranty period. If you follow this rule, you completely eliminate the need (and the cost) of extending the warranty. Remember, when you lease you don't own the car.  If your lease is entirely within the period of the manufacturer's warranty, there is absolutely no benefit to you by extending the warranty. By the way, don't forget mileage when considering a vehicle's warranty on a lease. Most new vehicles come with a 3-year 36,000 mile bumper-to-bumper warranty. But on a three-year lease that allows 15,000 miles per year (45,000 total miles), you could easily find yourself out of warranty in the last year of the lease.

If you find that you must lease beyond the manufacturer's warranty (even though we don't recommend it), consider an extended warranty from a large, reputable third-party company.

For more discussion on extended warranties and leases see our page on Extended Warranties.



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