[MrFoof]

>After dropping $250 up front for her lease of a 2015 Honda Civic, she pays $160 a week to Xchange. If she keeps the car for the full three-year term, she’ll end up paying Uber $25,210. The Kelley Blue Book fair purchase price for a new 2015 Honda Civic SE in Los Angeles is $18,142. Schmitt said she’ll need to pay Uber $5,000 or so more to buy the car if she wants to keep it at the end of her lease.

This is kind of par for the course for some chunk of car dealers. They have no qualms in getting someone to ultimately pay $30,000 for an $18,000 car of which the margins are normally extremely tight (2-3%) with profit being a very long tail of maintenance work orders. This one Civic, if she ran it to term and then bought it out, brought in as much profit as DOZENS of Civics.

My sister learned similarly many years ago. She ended up paying $26K for a $15K car, simply because she didn't do the math.

Although we'd like businesses to not engage in these kinds of deals, but unfortunately many businesses rely on these deals. I think the only decision more costly that people getting unwillingly put over a barrel for a car is people making poor retirement planning decisions and paying through the nose in fees (or buying what a "financial advisor" that is really a salesman at a bank is peddling) when there are far lower cost alternatives. It sucks, but it's true.

[dsfyu404ed]

Congratulations on figuring out how a BHPH dealer works.

Buy cheap economy cars that aren't upscale enough for a "real" used car dealer to have on the lot. Have your mechanic fix anything imminently wrong and put a GPS tracker in it. Require huge down payment (usually close to enough to break even) and/or absurd monthly payments. Hopefully you screw the customer out of a few months of payments before they can't pay, at which point you repo the car immediately and put it back on the lot for the next sucker.

[MrFoof]

>Congratulations on figuring out how a BHPH dealer works.

In the case of my sister it was a franchised Toyota dealer selling new inventory. Not BHPH. She signed a 3-year lease on a Toyota Corolla with a ridiculous money factor component because they got her to simply focus on the monthly payment, then financed it for 6 years afterwards (again, by getting her to focus on the monthly payment) at a ridiculous interest rate despite a FICO over 720 by simply not shopping around (she agreed to 9.5% when 3% was easily available from many retail banks and CUs).

When I showed her what she could've paid instead if she had any patience and simply run the numbers, she was incredibly upset. Not with the dealer, but with herself for not doing the due diligence. That's ignoring the fact that she could've just bought a 5-year old one, because a Corolla is literally a dime a dozen (350-400K units sold per year in the US at the time).

This is my point. If you simple appear ignorant and lazy (not in a bad situation), there are plenty of businesses that will use that to their advantage. If you are in a bad situation, it's just more potential leverage for them.

Yes, some franchised dealers do this with new inventory, even to people with good credit. If they think they can make an easy buck off of you on account of your ignorance, some will take the short-sighted approach (not trying to earn a repeat customer) and try to do it. If you throw up your hands they'll come back around and try to close the sale on amenable terms and offer it however they do, to make the sale.