4 things Long Islanders should know before buying a leased car

Car shopping can be a stressful task for many Long Islanders, but consumer protection legal experts say there is more to be on the lookout for than the traditional upsell.

Earlier this month, the state attorney general’s office announced that four Long Island Nissan dealerships, along with four others statewide, were ordered to pay $3.2 million in settlements for allegedly cheating customers who bought their cars at the end of a lease.

The dealerships allegedly tacked on “bogus fees” to jack up the cost of vehicles at the end of their lease agreements, state Attorney General Letitia James said in early May. 

An investigation and resulting settlement required Garden City Nissan, Huntington Nissan, Legend Nissan in Syosset, Smithtown Nissan in St. James, which is now defunct, and four other dealerships statewide to pay a combined $2.8 million in restitution to more than 1,700 customers, and a combined $400,000 in penalties, the office said.

In the settlement, none of the dealerships admitted or denied the findings of the attorney general's office.

The settlement follows a similar one announced in March 2024 that required Baron Nissan in Greenvale and Nissan of Westbury to pay a combined total of more than $377,000 in restitution and fines.

That same year in June, two more Island Nissan dealerships — South Shore Nissan in Amityville and Nissan 112 in Patchogue — were required to pay over $350,000 in penalties and restitution for allegedly cheating more than 200 customers, the state said. 

But some Long Islanders, like Lisa Gambino, 44, a Huntington Station resident, who wasn’t part of the settlement, believe they may have fallen victim to price hikes as well.

Gambino, who since 2008 had regularly leased cars for three-year terms at Smithtown Nissan, said in 2021 she and her husband decided to purchase her 2018 Nissan Pathfinder at the end of the lease.

Her lease agreement had a purchase option of $21,220 at the end of its term, according to documents shared with Newsday. But after being told she couldn’t use her credit union to finance the purchase and instead had to go through the dealership’s finance option and obtain a warranty, she ultimately ended up with a loan for $28,610, nearly $7,400 above her original agreement.

Officials with the now-defunct Smithtown Nissan couldn’t be reached for comment.

“We were totally taken advantage of and basically lied to, and at the end of the day there wasn’t anything we could do about it,” said Gambino, who didn’t report the issue at the time. “It left such a bad taste in my mouth, and I know they did wrong by us.”

Anthony T. Ballato, a consumer protection attorney in Massapequa, said situations like Gambino’s and the cases investigated by the state are incredibly common and go beyond any one car brand or dealer franchise.

“This is very common,” said Ballato, who has practice area expertise in auto dealership fraud. “I get calls every week from people who have been defrauded by dealers.”

Here are four things to know when purchasing a leased vehicle.

What should Long Islanders do before buying their leased vehicle?

Ballato said one of the most important things consumers should do when buying a leased car is to carefully read the contract before they sign, a step many bypass out of convenience.

“Before you sign it, read it and understand it,” he said. “When you are buying your leased car from the dealer, the price you are paying should be identical to what your purchase option is.”

Ballato also advises that consumers make sure they walk off the lot with a hard copy of their contract and not rely on promises of a copy being sent later.

“Be sure that before you leave that you walk out with a copy,” Ballato said.

What protections should consumers know about before buying a leased car?

“Anything that goes beyond what’s disclosed in the purchase option in the lease” violates the Consumer Leasing Act of 1976, said Joshua Feygin, a consumer protection attorney in Hollywood, Florida, who specializes in end-of-lease sales fraud.

Federal law, he said, requires that costs and fees must be disclosed in advance when a lease is first signed.

How do dealerships jack up the price of a car at the end of a lease?

Feygin, who dealt with many such cases following 2020 when used car prices were at their height, said dealerships across brands, including Volkswagen, Ford and Lexus, would add junk fees to the already established purchase options.

“They had forced people to get new tires, new brakes… anything and everything you can think of to make a profit off it,” Feygin said. “We saw a number of variations.”

Other ways to raise prices might include higher-than-normal inspection fees, or demands that consumers buy third-party warranties, he said. 

What should consumers do if they believe they've been taken advantage of?

Darren Newhart, a West Palm Beach, Florida-based attorney who deals with consumer protection issues, said one of the biggest hurdles he sees to consumers coming forward after leasing troubles is shame.

“Don’t be embarrassed to reach out,” Newhart said. “A lot of consumers feel embarrassed they got taken advantage of. Don’t feel embarrassed to reach out to an attorney."

Consumers should also contact the Better Business Bureau or their state attorney general's office if they feel they were the victim of deceptive business practices.