What is Lease Fraud and Why Would a Dealer Cheat a Consumer on a Lease?
Dealers can often make more money on a lease, sometimes above the table and sometimes not. All leases are financed, and dealers often get kickbacks on lease finance agreements which are larger than the kickbacks they receive on sales. Dealers often put the large “lease inception payments” in their pockets as well; in a sale, this would be a downpayment and would ultimately represent the owner’s equity in the car. Further, leases give dealers the opportunity at lease-end penalties, such as mileage or condition penalties, which are not present for sales. For instance, when you lease a car, the lease normally specifies how many miles you can drive under the lease. In many leases, it adds up to somewhere around 12,000 miles per year. If you drive more than that, the dealer and/or the leasing company can impose a mileage penalty on you, which can involve a whole lot of money if you’ve driven quite a bit over the limit. Also, the dealer may attempt to charge high retail prices for dents, scr
