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Getting a fair car lease
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October 21, 1997: 2:54 p.m. ET
Simpler agreements will make leasing easier, but shopping around still pays
From Correspondent Valerie Morris
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NEW YORK (CNNfn) - In early October, seven auto companies -- including Toyota and Volkswagen -- agreed to settle charges of burying cost information in leasing agreements and to stop deceptive lease advertising. The move was part of a Federal Trade Commission crackdown on dealer abuse.
Starting Jan. 1, when you lease a car, the dealer will be required to fully and accurately disclose all costs and payments.
In the past, "customers didn't know where their money was going to. It's not on the contract, so it was a little difficult to figure out the lease," said Hawthorne Chevrolet President Steve Barna.
The rules call for a new lease form boiled down to a single page -- no matter how long that single page turns out to be. Previously, the customer was quoted only a lump sum figure, the gross capitalization cost. On the new form, that figure will be itemized.
"You'll be able see… the actual trade-in value in a clearer way," said Remar Sutton, president of the Consumer Automobile Task Force.
The FTC is also cracking down on deceptive lease advertising -- especially when it mentions low or no down payment.
Zero money down ads still have fees that need to be paid up front, according to Barna. They usually include the first payment, security payment and sales tax. (116K WAV) or (116K AIFF)
The FTC wants those items clearly disclosed and big enough to read.
Other issues to keep in mind:
- Never lease on your first visit.
- Always compare to other offers.
- Make sure your lease is based on how many miles you actually drive.
No matter how simple your dealer tells you the lease is, keep asking until you understand.
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