Did you sell it to them?

Then why are they in the wrong? I never get why people complain about what they got for trade-in. Giving it to the dealer at that price is no different than giving it to someone who walked up to you on the street for that price. Would you have sold it privately for anything close to $10,000? Then why sell it to the dealer for that? You could have sold it yourself if you thought that price was so bad.

When you trade something in like a conversion van at a Mazda dealership, you're going to get hit especially hard. That van will only sell for about $18,000 looking at the market for E150 conversions -- but the Mazda dealer ain't gonna sell it. He can't sell a conversion van at his dealership. He's gotta auction it. And a dealer isn't going to buy one at auction for more than maybe $13,000. So you'd probably be doing pretty good to get $11,500 for it. $10,000 ain't a horrible deal. And you could have walked if you thought it was.

 

This is how it works: When you try to lease the first thing the dealers gives you is the manufacturer's captive lease company. For example, Mazda American Credit. MAC is offering about 7% APR on their lease. If you did some competitive shopping you will find that most dealers will offer you deals from other competitive banks, and, in my case, the dealer setup financing through USBank after the MAC offer was refused by me. My APR through USBank is about 4.75% instead of the 7% -- that's pretty significant. As an exercise, if you leased through MAC, go back and tell them, in hindsight, you've made a mistake with who your finance company is and you want to redo your lease agreement. :D

So, what then happens is that the finance company buys the car from the dealer, takes title, and then collects payments from you. In essence, the dealer sold the car to the bank. In many people's case this is MAC, but mine, it's another finanancial institution.

Nope, the signature line for the dealer states that the dealer is authorized to make the deal on behalf of USBank.

But this is the crux of the argument. I agreed to the 15K because you can see my signature a few inches below that on the lease agreement. Next to my signature is also the dealer's signature where they also agreed to the 15K. As the lease document clearly states multiple times -- like most other contracts -- the written document is the entire agreement. Whatever happened before is moot. I think other people have pointed out that if you had negotiated a deal for 15K and the dealer wrote done 12K in the agreement and you signed it -- there would be no way that the dealer would redo your agreement -- the first thing they would do is point out the multiple places that instruct you to carefully read what you're signing. Tough luck. Why shouldn't they be held to the same standard as they hold us?

That's the second issue. I've done the math and determined that by giving me 15K instead of 12K, the bank is out about $320, and the bank is apparently trying to hold the dealer responsible because, well, the dealer is responsible.

Somebody asked about funding to the dealer. The dealer told me that the finance company isn't going to "fund" the dealer which implied that the bank isn't going to pay for the car at all because the dealer jacked up the agreement. I believe this was a tactic to freak me out so I would resign. In reality, I bet the finace company is telling the dealer that you cost us $320 and we're taking it out of what we're paying for the car.

Maybe it would be easier to resign the agreement if the guy just said, "We're losing about three hundred bucks," instead of implying that they aren't getting paid at all! There was also the implication that I had to resign it, like this was just a procedure I had to do. I can handle the honest mistake, but being deceptive about correcting it...and I'm supposed to do the "right thing?"

I feel bad for the dealer, but that's why contracts are written up in black-and-white so that both parties are crystal clear what they are agreeing to. It's little ol' me who gets a car once every several years versus an organization that does this day-in-and-day-out with two or more people involved with every deal. It appears that I've benefited and they are out $320. I'm sure we can come to an equitable resolution where both of us walk away happy.

 

I understand and agree with what you're saying here, but you seem to be missing the point.

You said that the dealer was, quote, "taking about $1600 out of my pocket", when that is not the case at all. You never intended to use (or you intended to pay for) the extra 3K miles, so the fact that you got them is entirely moot. You either don't need them, or expected to pay for using the extra miles from Day One, before you ever saw the contract, when you agreed that 12K was enough for you. The dealer trying to correct their mistake isn't taking anything out of your pocket that wasn't going to be taken out anyhow.

You also might want to look into some contract law. While contracts are rarely void soley on the merits of a unilateral mistake, they are void when the other party in the contract had reason to believe there was a mistake within the contract when they signed it. And the assumption that the dealer was being generous at the last minute by changing the terms despite the previous agreement, isn't likely to float. The parol evidence rule (where the written terms supercede all previous agreements) doesn't apply in such case where mistakes were made by one party and knowingly taken advantage of by the other.

 

Both sides agreed to 12,000 and there was a typo for 15,000. The honorable thing for you to do is to re-sign for 12,000. The honorable thing for the dealer to do is give you a modest compensation for the extra hassle and for your goodwill.

People can argue all they want about what the dealer *might* have done if the tables were reversed, what some other dealer did to them, etc. Doesn't have anything to do with it. This is an issue of honor and it is between you and you. You know what you really agreed to and you know the intent on both sides. Your honor is priceless. You're gonna sell it for $1600? That's a rip-off.

 

Another point is that if the contract is not approved by the bank or leasing company and you refuse to come in and sign a new contract that can be approved they will more than likely repo the car from you...

 

look at tyour contract and contact the leasing comapny directly and see what their side of the story is. FInd out what they approved and then have some ammo for the dealer. you might also inquire as to what their commsion on the lease is at end into that.

I'll tell you this though, unles he typed up the contract on a typewriter, the pc programs they use to do this now are nigh infallible. Everything is sent to them and they just pull up the best deal, for you or for the, i know, i walked on 5 arrangments & 3 interest changes before i got what i wanted. Be nice be firm ask for compensation for your trouble and walk if they won;t do it.. trust me they WILL call you back into the dealership. Ask them to come down on the price of the car to give you 15k at the price they quoted you if you want.

 

One thing to note: If the car is turned in with 36,000 miles on it or less - then the bank is out NOTHING for the mistake even if it is not corrected.

The difference in allowed miles (up front) is normally 1-2% of MSRP going from 12k per year to 15k per year. ON a $32k MSRP this is either $320 or $640 depending on the lease bank. So they only way this error costs them is if the car is turned in 3 years from now with more than 36k on it. If not, then none of this even matters.

I have been leasing for years and one thing that always bugs me is you get ZERO credit for un-used miles. They hit everyone with a steep charge for miles over and any dents and dings - but if you turn in a perfect low-mile car you get nothing back - and the bank just makes extra money off the deal.

In my case, I have been able to sell my cars coming off lease and make a little money on them. Sure beats paying a "disposal fee" and giving them back a low-mile car. :D

Dennis

 

I've financed all of my cars and don't know if it the same for leases, but one of the documents that I've had to sign persuant to the finance agreement is that if financing the stated deal cannot found/approved, the deal is void and the car must be returned.

 

That is a true statement. So I assume (as someone else pointed out) that if the bank would not fund the lease and the lessee would not sign the new contract, then they might just repo the car. Any/some up front money paid might be in jeopardy as they could claim this as exenses in repo'ing the car, etc.

A local dealership here got in trouble because in place of the simple "if the financing does not work out, you have to immediately surrender the car" agreement they had one that involved penalties. $xxx per day that you had the car and $0.xx per mile you had driven it. So what they would do is promise folks a low rate/payment and they sign and drive off. A couple of days later they call them to tell them the "bank would not go for that deal" and the new rate/payment is higher. If you don't come back and sign the deal is off. If the customer tries to return the car they whip out the agreement the customer signed and calculate how much the customer owes to return it. I heard they keep a person at the BBB busy with the complaints from this dealer alone.

Dennis

 

This one needs to go to the state attorneys office not the BBB...

 

If the customer signs an agreement to pay the dealer for the use and miles on the car if financing falls through, I don't think they can sue anyone over it.

Is it legal? Sure - nobody made them sign it.

Is it explained to the customer what could (will) happen? I am sure not.

Is it ethical? I don't think so.

Dennis

 

Just because some dealers and sales people are jerks doesn't mean we should treat them all poorly... re-sign at 12k miles.

 

Hey
How much are you paying for the lease...Maybe you are over paying and should of gotten 15k per year.

How many miles were on the car when you got it.

 

The dealer came back to me at least three times with different leasing options (because I was getting bids from other dealers)and on the last one I asked him to fax me the lease agreement so that I could review it. It had a great payment, a great drive-off, and the 15K miles (when I really had only asked for 12K the first time I contacted him). I'd been getting numbers back from dealers for four year terms instead of three, for cars with options I didn't want, different colors, so I didn't think anything of this lease with a different mileage. I thought he had found a great deal for me, so I told him I'd come in and sign papers. It was only until the dealer contacted me about their error and I looked at other leases that I was able to confirm that the residual made more sense with a 12K lease and that's what they should have had. It was too good to be true.

Really now, the purchase agreement and the lease agreement both list the 15000 so there was no reason for me to think of it as an error. The agreement also stress how important it is for you to read the agreement carefuly, because it implies once you sign it, it's set in stone.

I spoke to the dealer on Saturday and they are deeply sorry fo the mix-up and have told me that they will fix it with the bank on their end, without reneg'ing on the deal they offered me. I'm anxious to see what happens next.

 

Well stated, Nubo.

Bill