Help! Doug: Can Dealers Legally Advertise Lease Payments Disguised As Car Payments?

June 23, 2010

Q. I'm no genius but I've got common sense. I was almost taken by a dealer that advertised a really low monthly payment, without making it clear in the ad that the payment was not on a loan. The money down was not a real down-payment, but a strange lease down-payment I had to pay tax on. So, I bolted out of the dealership the moment I saw I was being suckered. I went home, reviewed the ad and saw the fine print. Yes, it was a 5 year lease. I would have also been penalized 25 cents a mile had I gone more than 10,000 miles per year. (I normally drive around 18,000 per year. I would have been in a world of hurt if I had mindlessly followed the directions of a floor manager telling me that it was a great deal, and that I should "just sign here"). Are such misleading lease advertising schemes legal?

Answer: Yes, as long as the fine print gives the true conditions of the offer, that kind of ad is perfectly legal.    

There's similarity between your question and that posed months ago in a previous article I published in a different publication. I responded to questions of a "Push, Pull or Drag" ad, how if creating the impression that you'll get $3,000 for anything you can "Push, Pull or Drag" is legal, when the dealer is only offering $3,000 if the price of the car you buy is grossly inflated? Email me ( if you or any other reader wants me to email out a copy of that article.

Fine print will never be made illegal. It would be good if the scummier dealers had to make their fine print the size of the Surgeon General's Warning on cigarette packages, but that's not going to happen. Difficult or nearly impossible to read conditions left in fine print will persist in the future, acting like the punch-line of some mean-spirited practical joke to those who make the effort to read them.

If you hadn't walked out, and signed that 5 year lease, and then ran up 8,000 more miles per year than you were allowed, the hole you would have dug yourself into would be deep and dark. Unfortunately, you are among just a few who have the nose to smell something fishy, and willing to simply get up and walk out of a dealership. And for this fact, I cannot over emphasize what you did by walking out deserves high commendation.

Yet for those who instead walked into that same trap, and swallowed hook, line and sinker, many have been spared by our current credit crunch. Let me explain: Many people who would have become victims when credit was easy to get avoid being victimized now because they can't get approved for any lease whatsoever. Because it is harder to get approved for a lease than a loan, there is a smaller pool of naive, gullible, and inexperienced people who, even if they fall prey to such schemes, can be taken advantage of because--thankfully--they can't qualify get approved for any lease.

Here are some guidelines for avoiding "fine-print" rip-offs:  

1) Invest five bucks and buy a magnifying glass if that is what it takes to read fine print of any ad you are ready to jump at. If fine print is too fine to read, and the offer seems too good to be true, assume it is another misleading ad.

2) Contact the BBB and see what kind of "grade" they give that dealer. Check the number of complaints that dealer has received. Avoid any dealer with a BBB or DMV history of a lot of complaints.  

3) Write me and ask me about any offer that seems too good to be true. I will gladly try to look over an offer with you, to discern the real story behind a very inviting offer that could be "too good to be true."

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