Obtaining the Terms of a Lease
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a price drop like a better deal from someone else. Use
competition to your advantage: Request a free, no
obligation quote from each of our partners listed to the
right. Then when the salesman tries to convince you that
$500 off sticker is a "great deal", you can say,
"Gee, that's funny. I got three offers right here
that are $1000 less than your price." Then watch his
price drop to 100 bucks over invoice. |
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As of January 1, 1998, the Federal Consumer Leasing Act
(a.k.a. Regulation M,) requires dealers to disclose in writing
the gross cap cost, residual value, lease payment, and number of
months.
Unfortunately, the new rule stops short of requiring
disclosure of the money factor or interest rate. However, with
persistence you can obtain the factor from the dealer or
calculate it with a hand calculator given the other terms of the
lease. (Chart Software publishes computer software called Expert
Lease Pro that will perform all of the calculations forward and
backwards.).
Leaving the money factor out of the disclosure gives the
dealer a significant loophole allowing him tell you one thing
early on (ie residual and cap cost) then fudge the money factor
to fatten his profit margin when it comes time to sign the lease
agreement. To avoid this pin down the dealer on ALL of the terms
of the lease including the money factor early in the
negotiations.
Even with the new regulations, sales people are often
reluctant to provide the specific terms of the lease or are very
vague about the figures. Their strategy is to wait until the
very end of the process when the contract is presented for your
signature to make the required disclosures. At this point you
may have invested many hours in haggling and negotiations and
may be willing to sign anything (they hope) just to be done with
it. Don't make this mistake. Insist on disclosure of the terms
early in the process before you have invested so much time and
energy that you are unwilling to walk away. If the sales people
plead ignorance be persistent and if necessary, ask to speak to
the finance manager. Also, be sure to take clear, organized
notes and always write down the name of the person providing the
information. If possible, get the sales person or finance
manager to write the figures for you on his business card.
Having the figures in their hand writing will avoid any possible
confusion in the future over who said what.
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