Possible rip-off

miked41 · September 2015

My wife and I leased a 2015 Grand Cherokee Altitude 4x4 this weekend, MSRP 41,625. We went in without doing much prior research, were ok with the numbers provided to us, and ended up leasing the truck for 39 months at $588 per month with $5000 down. I didn't assume we got a great deal, but trusted the salesman and assumed it was fair. After re-reading the lease agreement, and going through lease calculators, it seems a little fishy. Even though MSRP is 41,625, the "agreed upon value of the vehicle" under gross cap cost is listed at $44,620, bringing total gross cap cost to 48502 including sales tax, warranty and fees. Cap cost reduction is 6912, which includes the down payment and the 2500 discount, so adjusted cap cot comes to 41590. Residual value is 19980, rent charge 1320. My question essentially: is there any way it makes sense for the "agreed upon value of the vehicle" to be 44620 when the msrp they provided me with is 41625? Or did they just game the numbers to spit out a higher monthly payment? Any help would be greatly appreciated.... I only paid half the sec deposit so still have a tad of ammo if I'm sure they screwed me over. Thanks!!

Michaell · September 2015

miked41 said:
My wife and I leased a 2015 Grand Cherokee Altitude 4x4 this weekend, MSRP 41,625. We went in without doing much prior research, were ok with the numbers provided to us, and ended up leasing the truck for 39 months at $588 per month with $5000 down. I didn't assume we got a great deal, but trusted the salesman and assumed it was fair. After re-reading the lease agreement, and going through lease calculators, it seems a little fishy. Even though MSRP is 41,625, the "agreed upon value of the vehicle" under gross cap cost is listed at $44,620, bringing total gross cap cost to 48502 including sales tax, warranty and fees. Cap cost reduction is 6912, which includes the down payment and the 2500 discount, so adjusted cap cot comes to 41590. Residual value is 19980, rent charge 1320. My question essentially: is there any way it makes sense for the "agreed upon value of the vehicle" to be 44620 when the msrp they provided me with is 41625? Or did they just game the numbers to spit out a higher monthly payment? Any help would be greatly appreciated.... I only paid half the sec deposit so still have a tad of ammo if I'm sure they screwed me over. Thanks!!

If you've signed the paperwork and taken delivery, I'm not sure how much can be done at this point. But, you can certainly ask the dealer to unwind the deal if you haven't given them all the up front cash.

First - what state and tax rate is this? Some states tax the entire selling price of the vehicle, making lease payments much larger.

Second - we don't recommend making any sort of a down payment on a lease. If the vehicle is stolen or totaled, you lose that money. Having said that, it's likely that you'll have to come up with some cash at signing - dealer fee, bank fee, first payment, and DMV costs are all legit.

Third - the dealer can mark up the MF (the "Rent Charge") to make extra profit.

Fourth - what is the lease term and how many miles per year?

miked41 · September 2015

This was in Chicago, where the tax rate is 8.5 and is affected upon the down payment and lease payments only. The rent charge is approx 1000, the lease term is 39 months with 10k miles per year. I'm not expecting a legal basis for unwinding the deal, I just want to make sure their is no rationale for "agreed upon value of the vehicle" to be over msrp so when i go in and complain I have all of my information straight. Thanks for the help!

Michaell · September 2015

miked41 said:
This was in Chicago, where the tax rate is 8.5 and is affected upon the down payment and lease payments only. The rent charge is approx 1000, the lease term is 39 months with 10k miles per year. I'm not expecting a legal basis for unwinding the deal, I just want to make sure their is no rationale for "agreed upon value of the vehicle" to be over msrp so when i go in and complain I have all of my information straight. Thanks for the help!

As IL taxes the payment each month, I see no reason for the "agreed upon value" to be higher than MSRP.

kyfdx · September 2015

Michaell said:

miked41 said:
This was in Chicago, where the tax rate is 8.5 and is affected upon the down payment and lease payments only. The rent charge is approx 1000, the lease term is 39 months with 10k miles per year. I'm not expecting a legal basis for unwinding the deal, I just want to make sure their is no rationale for "agreed upon value of the vehicle" to be over msrp so when i go in and complain I have all of my information straight. Thanks for the help!
As IL taxes the payment each month, I see no reason for the "agreed upon value" to be higher than MSRP.

Illinois still collects the tax upfront, like NJ

Michaell · September 2015

kyfdx said:

Michaell said:

miked41 said:
This was in Chicago, where the tax rate is 8.5 and is affected upon the down payment and lease payments only. The rent charge is approx 1000, the lease term is 39 months with 10k miles per year. I'm not expecting a legal basis for unwinding the deal, I just want to make sure their is no rationale for "agreed upon value of the vehicle" to be over msrp so when i go in and complain I have all of my information straight. Thanks for the help!
As IL taxes the payment each month, I see no reason for the "agreed upon value" to be higher than MSRP.
Illinois still collects the tax upfront, like NJ

Ah, got it.

Possible rip-off

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