Auto leasing is big business and unfortunately there are some rogue dealerships out there that are less than honest with buyers about the terms of their lease.  While most auto dealerships are ethical and will not mislead you when you ask the right questions, there are others who are out to do nothing more than make a quick buck.  Learning how to spot auto leasing scams is a good way to protect your interest when shopping for a new vehicle.

One common auto leasing gimmick is to sell you on a deceptively low interest rate when in actuality you are paying more than double what you thought was the case.   When you are lured in by deals such as a 3% interest rates on leased vehicles, it may sound too good to be true and often it is.  These types of scams works by making use of some easily overlooked "fuzzy math". 

Sometimes this play on numbers takes the form of calculating your payments or interest rate without considering all of the costs.  Leaving out things such as the closing fees, administrative costs, tags, title and so on can give a deceptively low feel for the actual total cost of the lease.  When this inaccurate "total" is used to calculate monthly payments as an example, many buyers will bite on something that they think they can afford only to later discover that the actual payments are higher than they anticipated or budgeted for.

Another version of the faulty math scam is taking the money factor and using it to represent the interest rate.  A money factor is expressed as a four digit number with two zeros after the decimal like so  - .0062.  A shady salesman might try to represent this as a 6.2% interest rate.  In reality, you would have to multiply the money factor by 24 and you would end up with a rough idea of your actual interest rate.  In the example above, it would work out to approximately 14.8% - a far cry from the quoted figure of 6.2%.

Still other auto leasing scams involve selling you things that you simply don't need.  Take the extended warranty scam for example.  This scam involves convincing customers to purchase extended warranties on lease vehicles by telling them that it will save them money, increase the value of the car at lease termination, or be fully refundable later down the line.  To your average consumer, this extra purchase may sound like a wise decision when in fact it is entirely useless and unnecessary.  If you are leasing a new vehicle that is still covered by a factory warranty, you have no need for this type of coverage.  Furthermore, what they neglect to tell you about the refundable nature of these policies is that your so-called refund is prorated and you can expect little if any money back in return.

If that's not bad enough, these shady characters have found a way to get you coming and going.  Most people understand that there will be penalties and fees involved in terminating a lease, yet contracts typically neglect to specify exactly how costly these fees might be.  Dealers have been known to simply add extra money to the actual termination fees quoted to them by the leasing company, thus overcharging the customer and padding their own pockets.

If these sound like horror stories, it might surprise you to know that most victims never even realize that they have been (quite literally) taken for a ride.  Most auto leasing scams operate under the customer’s radar to elude detection and questions.  As an educated consumer, you can avoid being a target for these scams by asking questions and requesting to see each and every penny accounted for in the calculations.

Another helpful tip is to shop around.  Not all dealerships operate with the intent to defraud their customers and getting a second quote on your lease might just expose the good from the bad.  By being aware and alert, you can avoid overpaying for your next vehicle lease.