Truth in Leasing

WASHINGTON, D.C.: A growing number of car shoppers, tempted by lower monthly payments, are choosing to lease rather than buy their next car. But the Federal Trade Commission says many lessees are enticed by advertising that buries hidden costs of the lease, often while boldly claiming that the contract requires no money down. As a remedy, the FTC announced Thursday it has reached agreements with five car companies requiring the automakers to prominently disclose taxes, title, security and registration fees, which can add up to hundreds or thousands of dollars. Such fees, which must all be paid up front, are often glossed-over in television ads, hidden in tiny text that flashes off the screen in an eyeblink. Some auto dealers say consumers are savvy enough to read the fine print before signing a deal, but the FTC says it wants to protect consumers from being lured in by misleading ads. For many consumers used to purchasing their vehicle outright, leasing is a new financial arrangement. Currently, one-third of all new cars are leased rather than purchased; that could become on-half by the year 2000. Next up: an FTC review the advertising of other car companies for similar practices.