My dealership called to inform me that the signed lease contract was in error.

A week earlier I had signed and taken delivery of of my new '04 anthracite navi 5sp. My lease was a residual of 57% and monthly payments of 454 on 15k miles per year...

Now they say that they made a mistake and quoted my residual incorrectly. Apparently they used the 12k miles per year residual. According to them my residual should have been 55%. This adds up to a difference of about $700.00 on the turn in price and higher payments of $17.00 per month. They have agreed to eat the difference in payments but want me to sign a revised contract giving me a lower residual price at the completion of the loan.

What are my options here? I don't feel any obligation to sign another contract. Would honda financing nix the deal? After getting hosed on my audi trade in this gives me some level of satisfaction...

I haven't gotten my plates yet from them. And fear they may hold those up until they get this new contract...

 

I don't know for sure, but I think you have them by thier grapes, if they inadvertanly screwed you, I don't think they'd be calling you to say they over charged you? Wait it out and see what happens, I think your a winner on this.

 

If it does not change your monthly payment.... why not. If you decide to purchase it at the end (for you or to resell), it will benefit to you.

 

Why don't you try to squeeze some more freebies out of them, like a few free oil changes, accessories, polo shirt, etc.

Something similar happened to me on my current lease, I got seat covers, polo shirt, cap, and a coupon for a free detailing.



I wouldn't worry about the purchase price unless you intend to buy the thing at the end.

 

Just be careful of what you sign.
Why don't you tell them that you want to take the new contract home with you before you sign it?
That way, you can read through the whole thing at your leisure and without the pressure of being at the dealership.

If they give you any BS about anything, tell them that you made a mistake in YOUR calculations and you would like to lower your monthly payment. See how agreeable they are to that!!!!

Eneg

 

Agreed -- since the contract is binding and non-negotiable after YOU sign it, there is no compelling reason that they should require you re-sign anything.

Throw it back at them -- inform them that it's their mistake, you don't feel that there is a need to re-sign the document. If you do, they might try to squeeze some extra payments out of you (I don't know leases well enough to say whether that is possible or not).

I would definitely take it home and read over it and punch out the numbers at your leisure to ensure that the monthly payments are still the same and they aren't getting their money back in a different way. Ask to speak with someone directly at Honda Financing if necessary... basically bypass the middleman.

 

Saintor is right. From what you described, they are charging you for a 12K mi lease but giving you a 15K lease with a 15K/yr buyout.

They will have to drop the vehicle sale price on the contract to eat the difference, but assuming they don't change the cap cost or the monthly payments, it benefits YOU!!!! especially if you decide to buy the car at the end.

 

They are the experts and should know better. My guess is that they'd need to show that you were such a sophistocated purchaser that you either knew or should have known they'd made an err (and, what, were duty bound to tell them?). Do your homework. If they screwed up, imho, you should consider meeting them half-way somehow. Won't be good for you in the long run to screw them, even if they'd have done it you you if they could. Depending on your facts, screwing you on your trade may have been uncomfortable, but may not be so bad to risk always wondering how they are going to screw you back on service, warranty issues, etc. Gotta take the high road even when it hurts.

 

Hey, it's CALLED a contract for a single function. To hold both parties to the original deal. Any changes they have made are most likely to benefit THEM, not you. Don't sign anything unless you have a laywer review it and determine that it's in YOUR best interest for the changes. In fact, you should pick out the lawyer and they should pay for the review. It's a contract and like it or not it's currently the FINAL say unless you do a new one...If your lawyer decides to NOT sign the new contract, they still have to pay for his services.

 

WAIT! This is a common leasing scam. Don't do anything until I find the URL of where this common scam is described. Your original contract is in force; you've become happy w/the car, adn now they want to play on that to eke out a *little* more profit. PHEW! Found the link. Be glad you posted the suspicious activity to the forum. Who knows how much $$ I just saved you:
http://www.leasetips.com/callbackscam.htm

 

THANK YOU! After reading your link I have to say my temperature went up a few degrees. I just called the accounting person back and requested a detailed breakdown in writing on their letterhead as to why the contract was in error and a full accounting of what they were going to cover on the monthly payments. It was toward the end of the day and she stammered a few times eventually saying that she could send one but it wouldn't go out until monday.

I am inclined in the mean time to NOT sign anything just yet. I have their revised contract and it appears as if the only change is the lowered residual. I have excellent credit however so I don't think that they can rescind the lease. Also since they offered to pay the difference in monthly payments my scenario is a bit different then the one in the link.

If this thing starts to stink more than it does already then they have picked the wrong person to F*** with.

Merry Christmas!

 

Wait, how are they "agreeing" to pay the difference? I don't like the sound of that -- makes it sound like they'll send the financing company a check at the end of the month too. Or do you mean the leasing company is just going to eat the difference?

Either way, don't sign. I don't really see any reason you have to. It's a contract -- they are bound by it. I also don't see how their finance manager, someone trained specifically to handle leases and purchases, could have made such a big error "inadvertently."

 

:lol2: :lol2: :lol2:

 

audinomore, I think that's the right course. I'm curious why they need to revise the contract if they're going to eat the error. Seems that they would just do it. There would have to be some real numbers juggling if theyre going to do a new contract, with a lower residual, keep your payments the same and somehow do away with the difference in the monthly payment due to the lower residual. Especially since that will all have to be reflected IN the new contract. Better check that site again to be sure they're not trying any of the OTHER leasing scams. Be sure; they're not doing this for YOUR advantage, adn unlike some other posters, it would take more than a polo shirt or free oil change to get me to re-sign a contract already in effect, that has no obvious and tangible benefit for me! BEWARE; it sounds simply like a variation on the callback scheme.

 

???

When I did my lease.. I swear my Residual for 36 months, 15k a year, 04 w/out Navi was 59%.

39 months was 60% residual value.


Hmm... F those guys at the dealership.
If there is a problem with the Lease it's with Honda Leasing.. not the dealership. **The dealership no longer owns the vehicle**

Sounds like a Scam.

 

Actually... Post the name of the Dealership here!

The name of the dealership, what state they are in, what they sell .. etc..

 

The name of the dealership is Hinshaw's Acura in Fife, Washington. I am anxious to get their response in writing as that may be the nail in the coffin on this. I requested that it be signed by the GM.

None of the other details regarding the lease seem to be out of whack. I was told that the residual on a navi at 15k is 57% originally. Now they say that it should have been 55%. I don't like the way that this is going. A call to Acura corporate, Honda finance, the BBB and my attorney (happens to be my uncle) may be in order. Does anyone have the phone number to someone at Acura that I can contact?

Thanks,

Without this forum I may very well have been duped!

 

Sounds like a scam.
The document you have should be binding and no reason to re-do the lease agreement. With a lower residual your payment will go up so it sounds like they are trying to get more money. I would contact Honda Finance directly to see whats up with this scam artist.

If it is a scam.. I would contact the local news paper and drop them a letter explaining how the dealership may be scamming other customers in the area. Expose them.

My 2 cents.

 

Yup. If they were going to eat the extra $17.mo there'd be no need fro new paperwork; they'd just do it.

 

There are definitely scam artists out there. The only people more deceptive than new car salesmen is a used car salesman. However, I think you guys are being too paranoid here.

I would definitely run the contracts (both new and old) by your lawyer but everything makes absolute sense. The residual is clearly lower on a higher mileage vehicle and no bank would give out a lease/loan on a car when the residual value is falsely inflated.

The payments stay the same and the residual is lower. The only way to do this is to a) drop the interest rate/money factor which is set by the bank, b) supplement each monthly payment or c) drop the selling price of the car.

Option A is fixed by the bank. No dealer will do option B because it is too much paperwork (42 checks from the dealer to supplement each of your payments?). They must be dropping the selling price and therefore "eating the difference".

Like I said, a lower residual benefits you in the end if you decide to purchase the car. Your out of pocket is the same. Your monthly payments are the same. This is clearly not the same situation as the scam that was linked to.

Check your contract to see if the vehicle sales prices are the same then check with your lawyer.

 

You don't need a lawyer. If the monthly payments are the same and the residual was reduced on the new contract, then the dealer had to lower the sales price or paid some sort of cap cost reduction equal to 17 times 36, or lowered the money factor or finance charges to make up the difference.

Demand the contract to review at your leisure and most likely it will be fine. I say this because the dealer said they will pony up for their error and allow you to keep the same payments.

 

This is clearly the same situation as was linked to. In this instance, rather than ask for the $17/month from audinomore, the dealer is saying they'll make up the difference (so they've said, but we have no details so far how that's to occur). And it's ridiculous to asy that they'd make 42 payments of $17! They'd cut one check for 42 x $17! That was funny to read...

 

I agree that another scenario is that the dealer has lowered the price of the car to compensate for the error. Let's see what Monday brings.

 

Thanks Brokedoc. You make some good points but there is no reduction of the capitalized cost. The only difference that I can see is a reduction in the amount of the residual from $20,061.15 to $19,357.25. As best I can tell there is no indication on the contract of the money factor used. The agreed upon value of the car was the same in both contracts.

At this point I do not think that the contract is going to be turned away by honda finance. This is due to the fact that from my research on this trusty forum 57% residual is in fact the right percentage for a 42 month, 15k, navi lease...

As I said I am awaiting the letter from them detailing their mistake and how they intend on making up the "lost" payments. If I do get it I will advise. Would it be a good idea to ask them to send another contract with a lower sales price by the $704.00?

Fast TL, I am in debt to you for pointing out this scam. Once resolved I owe you a six pack!

 

well its in your benefit to sign the contract if yoru current lease paper work states only 12k miles per year.. if it states 15k miles per year, then your ok...

Also, if nothing else is changing, and they are footing the cost of the increase, then your fine.. They arent changing the sale price of the vehicle on either contract, what they are doing is selling you the money factor at a lower rate to make up for the 17 dollars. You dont win, you dont lose, you just get paperwork that looks right on both ends.

Basically, a lease works like this..

the dealership has a buy rate for their money factors... say .00200 and a sell rate of .00220... the more they can shaft you higher than that, the more money that get from the finance company for screwing you.....

so basically, if they got you at .00250... thier bringing it down a few, but no less than their buy rate to compensate for thier mistake.....

I have a buddy in leasing, and he explained all this crap to me...



I bought a fully loaded TL with Nav with 800 down and 485.00 a month including tax for 48 months and 15k miles...

 

jim, you mean leased, not bought, right?

 

correct...

 

Holy Cow! How did you manage such a deal on your TL? That sounds too good to be true!

What exactly do you mean when you talk about "the money factor" is this relation to the interest?

Thanks,
Nick

 

Interest rate is for a loan. Money factor is for a lease. Basically the same animal with just different names depending on the financing venue.

 

Nickerz: Money factor (sometimes called "lease factor") is written as a multiplier, not a percentage so 9 percent would be expressed as .00375. To convert the lease factor to a percentage multiply by 24; to convert the percentage to a money factor, divide by 24.

Audinomore: I'm a little confused here. You say the residual changed, but what did they propose so far to explain how they're going to "eat" the difference in payments? I'm sure if the residual changed on your contract, the payment amount shown is also different. What's their current story?

 

Haven't gotten their letter yet so I don't know how they intend to pick up the costs... maybe today. I will be in the dealership this afternoon to pick up my car, (Lojack installation) so maybe I will run into her....

 

I leased my car through a leasing company... Leasing groups always have better deals on vehicles than the dealer does... the dealer wants to get as much as they can out of you....

 

tripp 11 & fast TL

Thanks for the feed back! Much appreciated!

PS I would think the dealer in this case would eat the difference in the money factor, right? Simply by adjusting it to make up the difference. ???

 

OK, audinomore, so what happened after all?

 

bump. i'm curious

 

Sorry that this has taken so much time...
Anyway, I never did receive in writing a breakdown of how the error in the contract occurred. I decided to wait two weeks then called Honda Financing. They said that they did not have the paperwork yet and that I needed to contact the dealer!
Now keep in mind that I have had the car now for almost 4 weeks. I told the gentleman that I was through dealing with that dealership the minute I drove off that lot and that I have a signed contract that they had better get a hold of it, not my problem. I then said that my next contact to them would be through my lawyer and hung up.

Not less than one minute went by and my phone rings. Guess who? The finance mgr from the dealership.... They are going to "take the loss" and expedite the paperwork and my plates (which I am picking up today). I thought that was pretty funny, take the loss, like they are losing in this deal...

Needless to say things worked out ok on this but I have a real bad taste in my mouth about how I was treated. I want to contact someone at acura high up and let them know what happened...

Anyone help out with contact information? Zone mgr? Cust service?

And finally thanks to all of you who helped out in this thread. I would have been scammed and hopefully future leasees will see this and be aware in case it happens to them...

BTW This article appeared in the local paper just 2 days ago. It seems that this process is "bushing" and is happening a lot in Washingtion.


http://seattlepi.nwsource.com/local/...1&searchdiff=1