Was It Leasing or Fleecing?
As the first automaker to heavily promote short-term teasm M. Iord quickly became the industry leader in leases as perccntage of new-car sales. After seeing Ford’s profits nd market share increase using that strategy, other companies decided to jump on the leasing bandwagon.
However, Ford’s t’brilliant marketing strategy” may not deserve all the credit for the dramatic increase in Nhort-term leases that occurred in their dealer network between 1989 and 1995. In fact, Ford had set up (or tolerated) a number of practices that would entice its dealers to write a lot more leases. Of course, those practices all involved opportunities for Ford’s dealers and salespeople to make a lot more money on leases than they would on purchases. Unfortunately for their customers, those huge profits were often made by tricking people into leases that involved overcharging and other fraudulent acts.
To be fair, I must state that the following unethical practices were not necessarily being used by all Ford and Lincoln-Mercury dealers and/or their salespeople. For example, in the “payoff-packing” scheme, only five Ford dealers (out of eight in that area) were charged with inflating payoff amounts to cheat their customers. And some sales/finance staff refused to carry out the deceptive tricks that were taught in the national training program, as evidenced by their demotions and terminations.
Some of the unethical practices that existed in the Ford Motor Credit lease program include: concealing payoff amounts from customers, ignoring outrageous acts of overcharging by its dealers, refusing to provide cap cost and APR disclosure in its lease contracts (which allowed overcharges and fraud to occur), recommending and/or providing a national training program that taught deceptive (and fraudulent) sales techniques, and paying secret bonuses to salespeople for recommending a lease over a purchase.
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