Car Lease Confusion - 2014 Mazda 3

[Savij]

Update for those who want it: I talked to a friend who used to work in car sales and said that this was a pretty standard tactic to get rid of customers when the dealership realized that they made a mistake and went too low on a lease. Another Mazda dealership agreed with this assessment when I was talking to him about my experience.

Original Post:
Hi guys,

Can you help me understand what is going on with my lease paperwork? I got what I think are good terms on a 2014 Mazda 3 i Grand Touring in an email from the dealer:

For leasing of a red 2014 Mazda3 i Grand Touring sedan with the terms of 36 months and 12k miles per year with $1,373 down for inception fees your monthly payment would be $271 + tax.

Once at the dealership (yesterday, Sunday the 30th) the sales guy tried to say that a 42 month 10k/year lease was better, but in the end, we went with the original email offer. We got the following paperwork from the dealership that we signed that matches the terms I had expected:

The next day the dealer called back and said that the financing was declined bank. When I asked for the finance decline letter from the bank, they emailed this:

I don't quote understand why the numbers in the agreement don't match the ones in the finance application. Why would the residual be zero dollars? Can someone help me out?

 

[MiataNC]

Call and ask them. My guess is that they just left the numbers off. There is nothing for Acquisition or Money Factor as well.

The reason you were declined is lack of installment credit or payment history. They also have you listed as Tier 3 for credit. In most cases you are not going to get the advertiesed lease terms (if you can lease at all) unless you are tier 1 or 2.

 

[Savij]

Call and ask them. My guess is that they just left the numbers off. There is nothing for Acquisition or Money Factor as well.

The reason you were declined is lack of installment credit or payment history. They also have you listed as Tier 3 for credit. In most cases you are not going to get the advertiesed lease terms (if you can lease at all) unless you are tier 1 or 2.

That's the thing, they said that those numbers are correct which I really don't understand.

Edit: I checked what the tiers mean, and it looks like it should be tier 2 (FICO of 694 as of last night).

 

[Savij]

Update for those who want it: I talked to a friend who used to work in car sales and said that this was a pretty standard tactic to get rid of customers when the dealership realized that they made a mistake and went too low on a lease. Another Mazda dealership agreed with this assessment when I was talking to him about my experience.

 

[uclabachelor]

Am I missing something here? Why would the OP sign an agreement before determining whether financing was approved or not?

If I signed a lease or purchase agreement, I would already know what the finance terms are and whether I'm approved or not. Also, I would keys in hand and the car will be in my garage. If the dealer calls back the next day for whatever reason that isn't my fault, I'd tell them to go pound sand. If they threaten to have the car back, I'd tell them I'm "out of town" and will be back next week and have a free car rental for a week.

Shit like this pisses me off.

 

[Savij]

Am I missing something here? Why would the OP sign an agreement before determining whether financing was approved or not?

If I signed a lease or purchase agreement, I would already know what the finance terms are and whether I'm approved or not. Also, I would keys in hand and the car will be in my garage. If the dealer calls back the next day for whatever reason that isn't my fault, I'd tell them to go pound sand. If they threaten to have the car back, I'd tell them I'm "out of town" and will be back next week and have a free car rental for a week.

Shit like this pisses me off.

Never took delivery of the car, but was told that everything was ok, and given a copy of the credit score which I took to mean that they already ran the credit. As we left I had the impression that we just needed the RMV to open in the morning and fax the dealership the insurance paperwork (Mass. has weird rules about not getting plates/driving a car until you have insurance).

I was told that stuff like this is called yo-yo financing and isn't uncommon.

 

[TerryMathews]

Something else to keep in mind: your dealer is using DealerTrack. There can be multiple versions of the bureaus offered through DealerTrack and the financing institution may not be using the same one as the dealer, hence the two different scores.

You need to see what your decline paperwork from Mazda says.

 

[Savij]

Something else to keep in mind: your dealer is using DealerTrack. There can be multiple versions of the bureaus offered through DealerTrack and the financing institution may not be using the same one as the dealer, hence the two different scores.

You need to see what your decline paperwork from Mazda says.

I asked them for the decline paperwork and the sent me the Mazda Capital Services Application Status print out.

 

[TerryMathews]

I asked them for the decline paperwork and the sent me the Mazda Capital Services Application Status print out.

No, Mazda will mail you a credit disclosure. By federal law they have to.

 

[Savij]

No, Mazda will mail you a credit disclosure. By federal law they have to.

Ok, I'll check that once I get it. In the mean time, all I have to go on is the other Mazda dealer saying that what they submitted to Mazda Capital was guaranteed to get declined no matter how good the credit is.

 

[TerryMathews]

Ok, I'll check that once I get it. In the mean time, all I have to go on is the other Mazda dealer saying that what they submitted to Mazda Capital was guaranteed to get declined no matter how good the credit is.

It doesn't work like that. Mazda Capital is sending the dealer a lump sum (what you're financing) against the car you're leasing. You getting too good a deal on the lease wouldn't (directly) cause a decline. Now, if the F&I person saw that you were quoted too good a deal and input your information incorrectly in order to force a decline... may be illegal depending on the specific situation. Is there something about you that you could claim and ECOA violation?

The ECOA prohibits discrimination in credit transactions based on
Race or color
National origin
Religion
Sex
Marital status
Age*
Applicant’s receipt of income from a public assistance program
Applicant’s exercise, in good faith, of any right under the Consumer Credit Protection Act

 

[Savij]

It doesn't work like that. Mazda Capital is sending the dealer a lump sum (what you're financing) against the car you're leasing. You getting too good a deal on the lease wouldn't (directly) cause a decline. Now, if the F&I person saw that you were quoted too good a deal and input your information incorrectly in order to force a decline... may be illegal depending on the specific situation. Is there something about you that you could claim and ECOA violation?

What he pointed out was that there was no residual or anything like that listed which would be expected for a lease (see the third image above) and he said something about the paperwork indicates that there isn't a monthly payment amount (or something along those lines I am not too clear about that part).

I have no reason to suspect discrimination, but at the same time, I'm Indian and I walked in with my white girlfriend (who is Russian)...Really, my assumption is that we both look much younger than we are so they thought they could take advantage of naïve foreign kids with the "better" deal and then they wanted to get rid of us when we didn't bite.

 

[TerryMathews]

What he pointed out was that there was no residual or anything like that listed which would be expected for a lease (see the third image above) and he said something about the paperwork indicates that there isn't a monthly payment amount (or something along those lines I am not too clear about that part).

I have no reason to suspect discrimination, but at the same time, I'm Indian and I walked in with my white girlfriend (who is Russian)...Really, my assumption is that we both look much younger than we are so they thought they could take advantage of naïve foreign kids with the "better" deal and then they wanted to get rid of us when we didn't bite.

There is a monthly payment, box 5 on page 1. To the other portions, residual et al are you sure that portion is for the dealer to fill out and not the financing institution? Normally, the bank determines the credit tier not the dealership.

I would say that if you've got paperwork in hand that indicates the dealership intentionally inputted your loan application in order to force a decline and did not correct it you might be able to claim an ECOA violation.

 

[Savij]

There is a monthly payment, box 5 on page 1. To the other portions, residual et al are you sure that portion is for the dealer to fill out and not the financing institution? Normally, the bank determines the credit tier not the dealership.

I would say that if you've got paperwork in hand that indicates the dealership intentionally inputted your loan application in order to force a decline and did not correct it you might be able to claim an ECOA violation.

I called the dealer's finance guy about the contents of the third image, and he very clearly stated that he filled in those values himself and then submitted the form to Mazda Capital (I wasn't expecting that and asked for a confirm and then a reconfirm).

Edit: Sorry, I misunderstood your question: I believe the residual is determined by the negotiated terms of the lease and has already been filled out on 10-d of image 1. My current understanding, based on the conversations with the other dealer is that the numbers from the contract (images 1 and 2) should have been carried over to image 3 to apply for the financing.

 

[MiataNC]

I don't think any dealer would intentionally try to turn you away.

Did they offer a new deal with higher rates and/or a higher payment?

 

[Savij]

I don't think any dealer would intentionally try to turn you away.

Did they offer a new deal with higher rates and/or a higher payment?

They asked us to come back, and that's where we are now.

 

[dirtboy]

Something similar happened to me except I took delivery of the car when I signed the lease. A couple days later the dealership said they want to "renegotiate" the lease because I made a mistake.

I never went in.

They called multiple times saying I made a mistake and that I better bring in my car, "or else." I asked what they were threatening to do and they claimed they were going to tow my car. I laughed... told them to go ahead because when I was done suing them I would have a free car.

Then the sales manager called called threatening legal action. I told him to go pound sand.

The sales manager called back again saying I made a mistake. I asked him what that was, and he said I made a mistake on the numbers. I asked him how that was possible considering they filled out the forms. He didn't have an answer. He said I needed to come in to resign because the lease was not valid.

I laughed...

I said, do you know that room where everyone signs the paperwork? He said, yea. I asked him to go in there. I said, "Do you see the sign on the wall on yellow paper?" Yes. "Please read it to me..."

In the State of California all sales are final. There is no cooling off period.

I hung up on him.

He called back saying it was their fault but they could not sell the lease. I negotiated some rather expensive oil changes. I later heard they fired the finance person who did the paperwork.

Check your individual state's law... they can check your credit instantly and know you are approved. That's not your problem.

 

[Topweasel]

Actually I am pretty sure the residual value is put there by the financing guy with their little rules on projected depreciation. That's what my Ford dealership did for mine. So if that's the case they pretty much submitted a three year loan on 25k with no residual. They basically requested a 3 year loan on the full 25k. That means $700 a month on the loan(without interest just to keep it simple). Probably pretty easy to get rejected if that's the case. Specially if you didn't have Tier 1 credit.

 

[Ancalagon44]

Something similar happened to me except I took delivery of the car when I signed the lease. A couple days later the dealership said they want to "renegotiate" the lease because I made a mistake.

I never went in.

They called multiple times saying I made a mistake and that I better bring in my car, "or else." I asked what they were threatening to do and they claimed they were going to tow my car. I laughed... told them to go ahead because when I was done suing them I would have a free car.

Then the sales manager called called threatening legal action. I told him to go pound sand.

The sales manager called back again saying I made a mistake. I asked him what that was, and he said I made a mistake on the numbers. I asked him how that was possible considering they filled out the forms. He didn't have an answer. He said I needed to come in to resign because the lease was not valid.

I laughed...

I said, do you know that room where everyone signs the paperwork? He said, yea. I asked him to go in there. I said, "Do you see the sign on the wall on yellow paper?" Yes. "Please read it to me..."

In the State of California all sales are final. There is no cooling off period.

I hung up on him.

He called back saying it was their fault but they could not sell the lease. I negotiated some rather expensive oil changes. I later heard they fired the finance person who did the paperwork.

Check your individual state's law... they can check your credit instantly and know you are approved. That's not your problem.

That is pretty awesome!

 

[UNhooked]

Something similar happened to me except I took delivery of the car when I signed the lease. A couple days later the dealership said they want to "renegotiate" the lease because I made a mistake.

I never went in.

They called multiple times saying I made a mistake and that I better bring in my car, "or else." I asked what they were threatening to do and they claimed they were going to tow my car. I laughed... told them to go ahead because when I was done suing them I would have a free car.

Then the sales manager called called threatening legal action. I told him to go pound sand.

The sales manager called back again saying I made a mistake. I asked him what that was, and he said I made a mistake on the numbers. I asked him how that was possible considering they filled out the forms. He didn't have an answer. He said I needed to come in to resign because the lease was not valid.

I laughed...

I said, do you know that room where everyone signs the paperwork? He said, yea. I asked him to go in there. I said, "Do you see the sign on the wall on yellow paper?" Yes. "Please read it to me..."

In the State of California all sales are final. There is no cooling off period.

I hung up on him.

He called back saying it was their fault but they could not sell the lease. I negotiated some rather expensive oil changes. I later heard they fired the finance person who did the paperwork.

Check your individual state's law... they can check your credit instantly and know you are approved. That's not your problem.

Don't think I have the nuts to pull that off. More power to you.

 

[TerryMathews]

I called the dealer's finance guy about the contents of the third image, and he very clearly stated that he filled in those values himself and then submitted the form to Mazda Capital (I wasn't expecting that and asked for a confirm and then a reconfirm).

That simply doesn't make sense. The FI determines tier, not the dealer.

Regardless of who did what, something in this deal isn't right.

 

[Savij]

That simply doesn't make sense. The FI determines tier, not the dealer.

Regardless of who did what, something in this deal isn't right.

Yeah, I just wrote up a letter asking them to review the request for financing and ensure that it was submitted with the correct information and let me know what they think in writing. I'll be sending it to the dealer's general manager and to the owner via registered mail tomorrow.

 

[dirtboy]

Don't think I have the nuts to pull that off. More power to you.

I had recently taken a contract law class at college and I have found it incredibly useful!

 

[Midwayman]

I had recently taken a contract law class at college and I have found it incredibly useful!

All that really matters is that you have a valid contract with the dealer. I've told various companies they can go fuck themselves when they threaten me as well. Every time they disappear when they can't intimidate you. Did they countersign that lease agreement? You have it cut off.