Fredintexas

According to Ford’s RCL dealer handbook, dealers were offered extra money for writing leases with interest rates that were above their standard lease factors: “The dealer shares up front with Ford Credit additional lease income earned over the lease term as follows: Lease Term 24 (Months), Dealer Portion 85%/Lease Term 36 (Months), Dealer Portion 75%/Lease Term 48 (Months), Dealer Portion 65%.”
Since Ford provided no written disclosure of interest rates on its leases, their customers would have had no idea that dealers were increasing their rates. Obviously, dealers would not have mentioned it to their customers when it was being done. So a dealer who secretly raised the rate on a lease by two points would receive additional income of $675 for increasing a customer’s total finance charges by $900.
This practice appears to be illegal, because someone acting as a loan “broker” (i.e., someone who is compensated for arranging and placing loans) must provide disclosure to customers when they are being paid by lenders for placing loans with them. And that’s clearly not being done by Ford Credit or its dealers.
This is a very common practice in the car business; most lenders pay dealers for giving them loan or lease business. (Without disclosure, of course.) Unfortunately for consumers, it often results in customers getting stuck with lenders who offer bigger kickbacks, not lower rates.