Here's a bit of info for anyone looking to lease anything from Mazda. Up until recently Mazda used Chase to handle all their leasing contracts. They're now using Toyota's financing arm for this purpose.
Here's the catch.
With Chase you had an automatic $1000 insurance coverage to take care of any scratches, dings or whatever when you returned your leased car. You also had what's called gap insurance, which covers the difference between what your insurance might pay in the event your car was totaled and the payoff on the car. So if your payoff was $26000 say, and the insurance company would only pay $22000 of the cost you were covered for the difference up to some amount, I don't remember exactly what the cutoff was.
Now with Toyota finance both of those things are gone, and the dealer will try and sell them to you for about $800 as an add on. The add on has some better coverage, but still, without it they can ding you for any small thing when you turn in the car, and any 3 year old leased car is going to have some minor stuff no matter how careful you are. So you sort of have to have it or you're at their mercy.
I found this out after I had negotiated the lease deal on my new 2020 CX-5 GT and went to talk to the finance guy to finish the deal and he laid it on me. In my case this is my third leased CX-5, first a '15, then a '17 and now the '20 all from the same dealer. I also had bought my 2010 Mazda5 from them before I started on the lease track, which I traded toward the '15. It's Autobarn Mazda in Evanston IL if anyone cares.
This would have added on about $20 monthly to my lease cost. Long story short, I basically said no thanks since I still had a month on my lease and had time to start the whole game over. When they realized I was seriously gonna walk out with my old car they decided to just eat it and throw in the insurance. Now honestly I'm not mad about it, they did what they needed to do to keep a longstanding customer, which is what a decent dealer should do. They said I should have been told about the change from the beginning since when I started the whole deal I told them I just wanted to lease the same car in a 2020 - GT, Red, PP - with no BS, what's it gonna cost me.
In the end it worked out fine, and I have no issue with the dealer, they were stand up by me. But you should be aware of this if you're leasing from Mazda and factor it in ahead of time. Mazda leasing ain't great to begin with, you don't get any sort of compensation for unused miles. When my wife leased a new Acura last year they rolled the previous 6000 unused miles into the new lease so while we leased it for 30000 miles we actually got 36000 instead.
I hope this keeps anyone from an unpleasant surprise at the dreaded finance guy's desk...
Your story illustrates another prong in the purchase/lease process beyond $ off MSRP.
After agreeing on the purchase price and financing (if the manufactuer offers a deal) one proceeds to the perfunctory insurance pitch in the finance office. The kinds of insurance that will be pitched are:
- gap insurance, as you describe, covering the amount underwater on the loan in the event of a total
- extended warranties, of course
- credit life and disability which pays off the loan if you die or covers payments while disabled
- scratch and dent coverage on a lease, as you describe
- one or two more I'm not thinking of at the moment
Of course if the manufactuer is not offering a finance or lease deal locked in up front, finance or lease terms are another pressure point of negotiation.
The profit margin on these insurance products is high. For example, the loss ratio (claim payouts as a percentage of premium collected) on credit life and disability can be as low as 50%, maybe lower, with sales commissions particularly high. Finance and insurance could be the largest profit center in a dealership so the hardcore pitch should be anticipated.
My finance office foray in purchasing a 2014 Sienna with 0% financing, a persistant but not especially hardcore pitch, I met each product offer with a polite "no, I would not be interested in that". At the end, with the finance lady circling back to Pitch Part 2, I asked what the total bill would be if I bought all the coverages including the top of the line extended warranty. $5,000, x in additional monthy payment. I explained that I pay attention to total cost not monthly payments and never buy extended warraties on anything (true) reckoning I'll come out ahead over a lifetime (true) and that I prefer to self-insure some portion of all my risks (true). She asked me how much I like to self-insure, wheeling into Sales Pitch Part 3. I told her at least $5,000 per risk, more depending on what it is.
She looked surprised and was kinda speechless. The pitch ended and we proceeded to the paperwork.
Now, if you want to get out of the finance office expediciously, without buying these expensive products and forgoing Pitch Part 3 or 4, whether all my "trues" are true in your case or not, the total cost and self-insurance argument has a high likelihood of pursuasion. No guarantee, but worth a shot if the guy keeps coming at you.
My recent foray in buying the CX-5 was kinda funny because it was a cash purchase, it was a certified vehicle extending the warranty, and my wife and I are retired. Since the guy didn't have much to sell, we went right to the paperwork after he said, "I'm guessing you're not interested in insurance products". They'll make some decent money on the trade.
