Bait-and-switch on new car lease
Within some limitations, the dealer is allowed to approve or deny lending to anyone that it chooses.  Those constraints are the basics that you'd expect for any regulation in the US:  Race Religion Nationality Sex Marital Status Age  Source of income You can read more about them in this leaflet from the FDIC's Fair Lending Laws office. (Link is a pdf download.) As far as what to do in your mother's case, it sounds like it may be some slightly shady sales tactics, but it isn't entirely illegal... It's just annoying.  One thing you could do to try to head off some of the crazy bait-and-switch sales tactics is to communicate with a handful of dealerships in your area about the specifics of your mother's profile as a purchaser. It's much harder to give someone the run-around if you have already agreed to something in principle by email. "I strongly discourage leasing (or loans, but at least you own the car at the end of it) in any situation. it's just a bad deal, but that doesn't answer your question.  Most new cars are ""loss leaders"" for dealerships.  It's too easy to know what their costs are these days, so they make most of their money though financing.  They might make a less than $500 on the sale of a new car, but if it's financed though them then they might get $2,000 - $4,000 commission/sale on the financing contract.   Yes, it is possible and entirely likely that the advertised rate will only go to the best qualified lessees (possibly with a credit score about 750 or 800 or so other high number, for example). If the lessee meets the requirements then they won't deny you, they really want your business, but it is more likely to start the process and do all the paperwork for them to come back and say, ""Well, you don't qualify for the $99/month leasing program, but we can offer you the $199/month lease."" (since that's the price you're giving from other dealerships). From there you just need to negotiate again. Note: Make sure you always do your research and negotiate the price of the car before talking about financing."
Break the transactions into parts. Go to your bank or credit union and get a loan commitment. When applying for loan get the maximum amount they will let you borrow assuming that you will no longer own the first car. Take the car to a dealer and get a written estimate for selling the car. Pick one that gives you an estimate that is good for a week or ten days. You now know a data point for the trade-in value. Finally go to the dealer where you will buy the replacement car. Negotiate the price, tell them you don't need financing and you will not be trading in the car. Get all you can regarding rebates and other special incentives. Once you have a solid in writing commitment, then ask about financing and trade in. If they beat the numbers you have regarding interest rate and trade-in value accept those parts of the deal. But don't let them change anything else. If you keep the bank financing the dealer will usually give you a couple of days to get a check.  If you decide to ell the car to the first dealer do so as soon as you pick up the replacement car. If you try to start with the dealer you are buying the car from they will keep adjusting the rate, length of loan, trade-in value, and price until you have no idea if you are getting a good deal. "Yes, he can retract the offer - it was a cash-only offer, and if you're financing, it's no longer ""cash"". Unless, of course, you get the financing through your local bank / credit union, and they hand you a check (like on a personal loan). Then it's still cash. However, the salesman can still retract the offer unless it's in writing because you haven't signed anything yet. The price of financing will always be higher because the dealer doesn't get all their money today. Also, if you finance, you are not paying just the cost of the vehicle, you are paying interest, so your final cost will be higher (unless you were one of the lucky souls who got 0% financing atop employee pricing, and therefore are actually saving money by having a payment)." I would like to add that from my own research, a pro to leasing over buying a new vehicle would be that with the lease the entire 7,500 federal incentive is applied directly to the lease, or so they say. If you buy a new car you get a 7,500 federal tax incentive also but if you dont have 7,500 bucks in taxes this wont be as much value. It doesn't sense to me to buy used since you dont get the tax incentive and also if you're in california the 2,500 rebate only applies to buying new or leasing 30 month or longer. With new cars it's usually the other way around: finance at a low APR or get cash back when you buy it outright. With used cars you usually don't know how much they have invested in the car, so it's more difficult to know how low they're willing to go. Regardless, I do think it's odd that they would knock 2K off the price if you finance with them, but not if you pay cash. The only reason they would do that is if they intend to make at least 2K in interest over the life of the loan, but they have no way of guaranteeing you won't refi. Therefore, I suspect they are bluffing and would probably close the deal if you wrote them a check (or put the cash on the table) for 2K less. However, if they won't budge and will only knock off 2K if you finance, you could finance and pay it off in full a week later. Just make sure they don't have any hidden origination fees or pay-off-early fees. "Every car company does this and its frustrating as hell.    Something much more prevalent -- even commonplace -- is the car you booked not being able... not just car (much more common), but car type.  When I travel I book flights/cars weeks if not months in advance.  I travel on the company dime and they don't care if I get a Mustang convertible, Charger RT, etc., whatever.    Again, booked weeks/months in advance.    I can't tell you how frustrating it is to get off a 5-hour flight, take a 30-minute shuttle ride to the airport rental center (here's looking at you, DFW) and get there to be told I'm getting a Kia Sorento.    I know it sounds snobbish, but I paid for the upgrade, I've still got an hour drive to XYZ, and I want something fun to drive.  And they know, and I know, that bitching and moaning does absolutely nothing.  If X car isn't on the lot, I'm not getting it, unless Jesus Christ himself comes down and brings a Hemi with him.  I always see first timers there -- dads screaming at the desk agent with the wife and kids waiting on the benches, obviously exhausted and embarrassed -- trying to get the Tahoe or whatever they reserved.  ""Let me speak to your manager.""  I have seen this maybe 5-6x, and every. single. time. the wife ends up calming the husband down, wife apologizes to the desk agent, and they take their Hyundai Santa Fe or whatever.  It's like the twilight zone every time I see it.  ""Is this family still here from last time?  Nope, new family.""  TLDR;  Convertible wasn't available, got the moped.  Kind of like a convertible, I guess." Dealer financing should be ignored until AFTER you have agreed on the price of the car, since otherwise they tack the costs of it back onto the car's purchase price. They aren't offering you  a $2500 cash incentive, but adding a $2500 surcharge if you take their financing package -- which means you're actually paying significantly more than 0.9% for that loan! Remember that you can borrow from folks other than the dealer. If you do that, you still get the cash price, since the dealer is getting cash. Check your other options, and calculate the REAL cost of each, before making your decisions. And remember to watch out for introductory/variable rates on loans! Leasing is generally a bad deal unless you intend to sell the car within three years or so. I agree with Speedbird389 - I leased an economy car 10 years ago, paid the residual at the end of the lease because I knew the car would last a long time, but that cost me $5000 more than if I had bought it in the first place... I have a colleague who always leases cars first.  He's very well off, has piles of money in savings, owns a home, and the cherry on top, he could just write a check for the car....   He sees the lease as an insurance policy on the first couple of years of the car's life.  If it gets in an accident or he finds something about it he doesn't like, he can give it back to the dealer at the end of the term with no hassle and move on to the next car.  Some people value the fact that a lease is a rental.   If you're leasing a luxury car or something you couldn't otherwise afford, no amount of mental gymnastics will turn this in to a good idea.   Separately, you should never make a down payment on a lease.  If the car is totaled early on, you will not recoupe the money you put down.  The issue here is that while the numbers all work out the same between a lease and a purchase your situation is different.  If the leased car is totaled, the bank gets its money back from an insurer.  If that payment doesn't cover the value of the car, the GAP insurance will cover it.  In either situation, if there's an excess remaining it will be returned to you.  The issue is the excess may not fully replace your down payment.  If you then went to lease another car you would need to come up with that down payment again because you couldn't just simply choose to lease a used car; like you could in the case of a purchase.  Additionally, GAP is generally included in a lease whether you want it or not.  As far as I'm concerned it doesn't make financial sense to mitigate the value of the GAP coverage once you've decided to live in a lease situation. "Imagine that, a car dealership lied to someone trusting.  Who would have thought. A big question is how well do you get along with your ""ex""?  Can you be in the same room without fighting?  Can you agree on things that are mutually beneficial? The car will have to be paid off, and taken out of his name.  The mechanics on how to do this is a bit tricky and you may want to see a lawyer about it.    Having you being the sole owner of the car benefits him because he is no longer a cosigner on a loan.  This will help him get additional loans if he chooses, or cosign on his next gf's car. And of course this benefits you as you ""own"" the car instead of both of you. You will probably have to refinance the car in your name only.  Do you have sufficient credit?  Once this happens can you pay off the car in like a year or so? If you search this site a similar questions is asked about once per month.  Car loans are pretty terrible, in the future you should avoid them.  Cosigning is even worse and you should never again participate in such a thing. Another option is to just sell the car and start over with your own car hopefully paid for in cash." A Lease is an entirely different way of getting a car. In two situations it makes sense, in all other scenarios it generally doesn't make sense to lease. In the case of always wanting a new car every 2 or 3 years it can make sense to lease. Of course if you drive more the allowed miles you will pay extra at the end of the lease. If you can take the monthly lease as a business expense leasing makes sense. Otherwise you want to pay cash, or get financing. Does zero percent make sense? Sometimes. The only way to make sense of the numbers is to start with your bank, have them approve of the loan first. Then armed with the maximum loan amount they will give you and the rate and the length of the loan, then visit the dealer. You have to run the numbers for your situation. It depends on your income, your other expenses, your credit score, your bank, what deal the dealership is running, how much you have for a down payment. Here is an example. For a recent loan situation I saw: 36 months, 1.49% rate, 20K loan, total interest paid: ~$466. Armed with that information can the person get a better deal at the dealership? There was only one way to find out. In that case the credit union was better. The rebate was larger than the interest paid. Christ, Seinfeld was mocking this twenty years ago.  Do they not have a non-refundable, cast-iron reservation system?  Seems nuts just to assume that customers prefer being able to cancel over the reassurance that Hertz won't cancel on them. "I'm impressed.  She must have a substantial income to agree to a $500/month car payment.  I imagine her income is about 20K per month for that to make sense.  What kind of work does she do?  To answer your question, typical lease do not work the way you describe.  Paying an extra $2000 will allow you to skip 4 payments (provided the payments were exactly $500) any time in the future.  It does not modify the terms of the lease which would include the payment amount.  Also one does not receive a fiance charge reduction benefit as with a loan.  Essentially you are providing a loan to the leasing company for free. To be explicit you cannot tell the mortgage company anything as she is applying for the loan, not you.  She can tell the mortgage company the new payment is $400, but she would be falsifying the application which is not advisable. Perhaps the mortgage company is doing her a favor.  They are indicating her life is out of control financially.  Either she is attempting to purchase way to much home or her consumer debt is out of control.  It could be a combination of both.   My first paragraph was written to be ""tongue in check"" in order to demonstrate absurdity.  Without a substantial income and an substantial net worth, a 500/month car payment is simply ridiculous.  While it is someone average, when you compare it to the average income (~54K/year) you understand why 78% of US households live paycheck-to-paycheck (are broke), and have no retirement savings. For your and her sake, please stop giving all your hard earned money to banks." "This is completely disgusting, utterly unethical, deeply objectionable, and yes, it is almost certainly illegal. The Federal Trade Commission has indeed filed suit, halted ads, etc in a number of cases - but these likely only represent a tiny percentage of all cases. This doesn't make what the car dealer's do ok, but don't expect the SWAT team to bust some heads any time soon - which is kind of sad, but let's deal with the details. Let's see what the Federal Trade Commission has to say in their article, Are Car Ads Taking You for a Ride? Deceptive Car Ads Here are some claims that may be deceptive — and   why: Vehicles are available at a specific low price or for a specific   discount What may be missing: The low price is after a downpayment, often   thousands of dollars, plus other fees, like taxes, licensing and   document fees, on approved credit. Other pitches: The discount is only   for a pricey, fully-loaded model; or the reduced price or discount   offered might depend on qualifications like the buyer being a recent   college graduate or having an account at a particular bank. “Only $99/Month” What may be missing: The advertised payments are temporary “teaser”   payments. Payments for the rest of the loan term are much higher. A   variation on this pitch: You will owe a balloon payment — usually   thousands of dollars — at the end of the term. So both of these are what the FTC explicitly says are deceptive practices. Has the FTC taken action in cases similar to this? Yes, they have: “If auto dealers make advertising claims in headlines, they can’t take   them away in fine print,” said Jessica Rich, Director of the FTC’s   Bureau of Consumer Protection. “These actions show there is a   financial cost for violating FTC orders.” In the case referenced above, the owners of a 20+ dealership chain was hit with about $250,000 in fines. If you think that's a tiny portion of the unethical gains they made from those ads in the time they were running, I'd say you were absolutely correct and that's little more than a ""cost of doing business"" for unscrupulous companies. But that's the state of the US nation at this time, and so we are left with ""caveat emptor"" as a guiding principle. What can you do about it? Competitors are technically allowed to file suit for deceptive business practices, so if you know any honest dealers in the area you can tip them off about it (try saying that out loud with a serious face).  But even better, you can contact the FTC and file a formal complaint online. I wouldn't expect the world to change for your complaint, but even if it just generates a letter it may be enough to let a company know someone is watching - and if they are a big business, they might actually get into a little bit of trouble." The car deal makes money 3 ways. If you pay in one lump payment. If the payment is greater than what they paid for the car, plus their expenses, they make a profit. They loan you the money. You make payments over months or years, if the total amount you pay is greater than what they paid for the car, plus their expenses, plus their finance expenses they make money. Of course the money takes years to come in, or they sell your loan to another business to get the money faster but in a smaller amount. You trade in a car and they sell it at a profit. Of course that new transaction could be a lump sum or a loan on the used car... They or course make money if you bring the car back for maintenance, or you buy lots of expensive dealer options. Some dealers wave two deals in front of you: get a 0% interest loan. These tend to be shorter 12 months vs 36,48,60 or even 72 months. The shorter length makes it harder for many to afford. If you can't swing the 12 large payments they offer you at x% loan for y years that keeps the payments in your budget. pay cash and get a rebate. If you take the rebate you can't get the 0% loan. If you take the 0% loan you can't get the rebate. The price you negotiate minus the rebate is enough to make a profit. The key is not letting them know which offer you are interested in. Don't even mention a trade in until the price of the new car has been finalized. Otherwise they will adjust the price, rebate, interest rate, length of loan,  and trade-in value to maximize their profit. The suggestion of running the numbers through a spreadsheet is a good one. If you get a loan for 2% from your bank/credit union for 3 years and the rebate from the dealer, it will cost less in total than the 0% loan from the dealer. The key is to get the loan approved by the bank/credit union before meeting with the dealer. The money from the bank looks like cash to the dealer. For people who are good with money (presumably), Kiva.org gives your money to such people who apply for loans through social service organizations in various countries (I believe this is how it's done). The people state what they will use the money for. It can be as simple as 'buying provisions for food truck business' or 'replacing wheels on tractor.' Then they pay the money back and you (who donated x number of dollars) use that repaid money to make another loan.