Why don't dealers advertise $49/mo leases?

rhinestonefuse

Can anyone with NADA experience please help me to understand why dealers don't mislead consumers with much lower monthly lease values (and much higher down payment values)?

The dealers all seem to employ identical leasing formulas (collusion?):

Kia ($99/mo with $999 down)
Ford ($199/mo woth $2500 down)
Bmw ($799/mo woth $7000 down)

Why not advertise a Ford Taurus for only $49 per month with $6500 down? No one would ever put that much down, of course, but that's not the objective. The objective is to get the consumer into the car and engaged in a negotiation. If the Ford dealer down the street put a bilboard up with $49* / mo Taurus, I am pretty confident his website/lot would be overrun with people asking questions (and looking at the Taurus).

What's with that magic formula, how did that end up being the same for all dealers? Is it a self-policing formula, establshed by NADA to do just enough teasng while avoiding all out state consumer protection attention?

Mr_Shiftright

Probably because the dealer isn't the leasing institution and has no say in the basic terms. Of course, the dealer can change some aspects of the lease, like adding to the money rate, and dealing off the MSRP, but he can't change the residual, the term, etc.

rhinestonefuse

That is very interesting.

Do you know of any commercial financial institutions that sell cars?

isellhondas

No smart, ethical dealer would do that!

Any sensible person would KNOW that there would have to be some kind of a gimmick in order to offer a 49.00/mo lease. These people wouldn't bother calling or coming in.

So, guess what kind of people WOULD respond to something that ridiculous?

Mr_Shiftright

There are already plenty of sucker leases out there that are far more subtle and much easier to snare the uninformed with.

rhinestonefuse

isell, thank you for taking the time to answer my question. I believe you are being sarcastic by calling dealers smart and ethical, I don't believe they are dumb, but I know almost all of the factory certified dealer are not ethical.

I also respectfully disagree with your sentiment that the public in general sees right through a $49 lease gimmick. I am confident that there are plenty of smart, educated professionals (and also plenty of morons) who would respond to a $49 lease who don't have a clue about math or finances . I am confident any dealer would be flooded with calls/traffic if they advertised a $49 lease on a $25,000 car.

Herb Chambers up here in Boston once billboarded the Mini (or was it the Fiat 500?) for the "same cost as an iPhone"* *$99 per month. Perhaps that failed, or perhaps his compliance dept got spooked.

it's what I'd do, if I had to push metal.

Mr_Shiftright

I would think such a ploy ultimately self-defeating for most dealers, since the type of person you are likely to attract is probably somewhat marginal financially, and so unless the dealer is running some kind of back alley financing, most of those people are going to have poor credit ratings and will require a lot of heavy lifting to get them into a car.

isellhondas

rhinestonefuse said:

isell, thank you for taking the time to answer my question. I believe you are being sarcastic by calling dealers smart and ethical, I don't believe they are dumb, but I know almost all of the factory certified dealer are not ethical.

I also respectfully disagree with your sentiment that the public in general sees right through a $49 lease gimmick. I am confident that there are plenty of smart, educated professionals (and also plenty of morons) who would respond to a $49 lease who don't have a clue about math or finances . I am confident any dealer would be flooded with calls/traffic if they advertised a $49 lease on a $25,000 car.

Herb Chambers up here in Boston once billboarded the Mini (or was it the Fiat 500?) for the "same cost as an iPhone"* *$99 per month. Perhaps that failed, or perhaps his compliance dept got spooked.

it's what I'd do, if I had to push metal.

No, not most of the "factory certified dealers" (whatever that is) are not ethical. Some are and they usually don't last long.

By your first post, it almost sounded like you thought dealers SHOULD run come-on ads like that.

Yes, SOME "smart, educated professionals" might actually respond to an ad like that but when they heard they would have to put 8000.00 down (or whatever) they would feel they had been suckered. Like Mr. S. suggested most of the inquiries would be from "strokes" or from clueless people with bad credit.

rhinestonefuse

Well what a coincidence. I looked around and find Nissan and VW are offering $49 and $59 / mo leases on Jettas and Sentras with only 2500 down.

I also see $400/2995 leases for Range Rover Evoques.

Would love to know results of these aggressive moves. Glad to see industry running with MY idea.

isellhondas

Well, "something" is missing here. I would love to read the fine print.

Things like the Money Factor, length of the lease, "other" charges not disclosed.

Maybe you can post the details?

Length of lease, miles allowed, money factor "other charges"

Or maybe you can post the name of the store and we can find out for ourselves.

SOMETHING is missing here!

rhinestonefuse

Still going strong:

$59 Lease for New 2019 Buick Encore Preferred from factory authorized Buick dealer in the Northeast. Genius move.

24K, LEV $17,500, 24K miles, $2995 down, $495 acq fee and usual taxm title, docs excluded.

Michaell

rhinestonefuse said:

Still going strong:

$59 Lease for New 2019 Buick Encore Preferred from factory authorized Buick dealer in the Northeast. Genius move.

24K, LEV $17,500, 24K miles, $2995 down, $495 acq fee and usual taxm title, docs excluded.

That's still just $184/mo with $0 down, which is a decent payment.

rhinestonefuse

And here we have another:




The online ad has tons of fine print, but it's 100% illegible.

When clicked through, there is no mention of any $49 deal on their web site that I can find (New Car Specials, Financing().