Too good to be true?

I’m trying to figure out whether this is too good to be true: My father got a pitch from LowerMyLease.com, owned by ACS, which promises to lower his car least by almost half. I can’t find the trick. The means either that the GMAC lease he has is so stuffed with margin that it’s easy for another company to come along and do this… or that there’s a trick or hidden fee here I can’t find. Any wiser minds than mine able to figure this out? Is this a case for Consumerist?

: LATER: My father talked to someone there. Turns out you need to add lease buy-out plus the residual value and that raised his payment. Oh, well. No free leases.

  • http://www.LowerMyLease.com Tarry Shebesta

    This is a new service we created from the number of re-leases we were doing through our http://www.LeaseCompare.com website. There is no guarantee that we can lower your lease payment but it doesn’t hurt to try.

    Leases are re-written with national lenders such as US Bank and Wells Fargo and are standard Regulation M contracts.

  • http://www.canyouhearmenow.com Carlos

    Site looks honest to me. They are exposing the residual and money factor, which are the key numbers in computing a lease payment.

    The trick is, it appears the default payment you see is a 60-month lease, which indeed would naturally be a lower payment than a shorter lease someone might already be in. In other words, you might be extending your payments for a much longer window…and still not own the vehicle in the end.

    But I don’t think there is anything nefarious here…it could be seen as refinancing a mortgage. Just be aware that extending a lease any further likely gets you outside of the warranty period, where you’re responsible for keeping the car in good working order up until the point you turn it in.

  • http://http:rightnumberone.blogspot.com rightnumberone

    Here’s a thought: If it sounds too good to be true, then it is.

    Carlos is correct. They are not promising to do what you state. You state they are promising to “lower his car lease by almost half.”

    Wrong! They are promising to reduce HIS MONTHLY PAYMENT by half.

    Anyone could do that by stretching out the repayment period. This will, of course, NOT result in your father saving any money unless one is sufficiently one-dimensional enough to think that the only cost is the monthly payment.

  • http://www.LowerMyLease.com Tarry Shebesta

    There is no promise to lower any payment by any amount. All valid terms and payments are displayed for each lease program. On some deals you may be able to shorten your term with the same payment.

    If you are in a manufacturer’s subsidized lease program then there is probably no way you are going to be able to lower your lease payment.

  • http://http:rightnumberone.blogspot.com rightnumberone

    I quote from the home page of the website itself:

    “Lower Your Monthly Payment By Refinancing Your Auto Lease Online!”

    Promise: By “refinancianing your auto lease online” we can “lower your monthly payment.”

    You might argue that this isn’t, technically, a “promise,” but you’d be incorrect from a legal perspective, where the concept of an implied promise has been affirmed by many courts.

    There are many reasons to lease a vehicle (convenience, lack of down payment), but none of them save anyone money over the life of a lease, versus the alternative of purchasing the vehicle outright.

    This site certainly can lower your monthly payments, but it does so by INCREASING your total lease costs.

    Next up: Refinance your home for 300 years and pay only $12 per month (of course, your heirs will have to pay also.)

  • http://www.LowerMyLease.com Tarry Shebesta

    You have to really compare the money factor (interest rate). Most dealers try and markup the rate to the maximum reserve. On these types of deals is where you will see the most savings by using this service, without increasing your term.

    As for leasing vs outright purchase, you are right, leasing is more expensive because you are paying interest. For those who don’t purchase outright or always have a car payment then lesaing will usually be the best option for a lower payment.

  • Mike G

    As for leasing vs outright purchase, you are right, leasing is more expensive because you are paying interest. For those who don’t purchase outright or always have a car payment then lesaing will usually be the best option for a lower payment.

    Unless you gain tax benefits from leasing, which is why leasing exists at all. But yeah, basic logic– a purchase involves two people, a seller and a buyer, a lease involves three, a seller, a buyer and a lender, pretty much by definition, there has to be more money in that transaction from some direction, probably you….