Fiat Dealers Are Pocketing Incentives for All-Electric 500e

By · July 30, 2013

Fiat 500e

Fiat 500e (Photo: Brad Berman)

When the order books for the 2013 Fiat 500e opened earlier this year, hundreds of eager buyers in California—the only state where the car will be sold—jumped at a chance to own the sexy Italian electric minicar, driven by $2,500 in dealer incentives and more than $10,500 in Federal and state purchase rebates.

But as reported by InsideEvs, Fiat’s headline price of $199 per month with $999 at signing on a 36 month lease isn’t always what it appears to be. When some customers got ready to finalize the paperwork and pick up their cars, they were handed monthly lease offers of more than $300.

After complaining to the dealership, frustrated buyers were advised to read the small print on Fiat USA’s 500e microsite. Click on the tiny plus sign next to the almost-incomprehensible text advertising that you can “Lease a Fiat 500 e for $199 A month for 36 months+” and a small popup window opens, reading:

“For well qualified lessees based on MSRP example of $32,600 with a P24 package after all applicable offers. Total due at lease signing includes a down payment and first month's payment. Offer requires dealer contribution. Tax, title and license extra. Lessee pays for excess wear and mileage of $.25 /mile for each mile over 12,000 miles per year plus a $395 disposition fee if vehicle is returned at end of term. Option to buy at lease end at pre-negotiated price. Dealer's actual terms may vary. Offer through Chrysler Capital. Residency restrictions apply. See dealer for details. Must take retail delivery 07/31/2013.”

Fiat 500e

The Devil's in the details when it comes to Fiat's headline Fiat 500e lease price.

In other words, the headline offer posted by Fiat on its website not only requires dealers to participate at their own discretion, but until you’ve signed on the dotted line, the terms of the contract can change. Placing a deposit down without signing isn’t enough to secure the headline deal.

So what’s going on here? Why are some dealers hiking the price of the Fiat 500e?

Sales of the all-electric 500e help Fiat comply with a California law requiring automakers to sell a specific percentage of zero emission cars within the state in order to be granted a license to sell other cars there. In simple terms, to sell cars in California, Fiat Chrysler needs to ensure all the Fiat 500e compliance cars are sold.

To incentivize dealers to sell the car, Fiat committed to giving each dealership $1,500 for every Fiat 500e they sold. In many situations, dealers are passing that incentive directly onto the customers. At dealerships where this is happening, customers are being given lease deals matching Fiat’s headline price.

In other places, however, dealers are pocketing the incentives and charging full MSRP—or even higher, essentially profiteering on the Fiat 500e’s popularity.  And when customers who have placed a deposit down complain, they’re told to sign and pay up to $264 or more for the lease—or walk away as the dealership has other customers willing to sign in their place.

As far as we can tell, there’s nothing illegal going on here, but the practice raises obvious ethical concerns. The lesson for consumers is, of course, very simple: always read the small print; remember that a deposit is just that; and double-check before singing any documents.


· · 4 years ago

Sure, completely legal, but yet again shows that Tesla is correct to try and change the game and eliminate dealers. Can you imagine how much dealers would have marked up the Tesla Model S Performance when it was first available--low volume, massive waiting list, and then the car wins Motor Trend Car of the Year? They would have tried to charge $40k over invoice and said "hey, we have a big waiting list, pay our price or we'll have plenty behind you that will pay". Quickest way to sour someone on a brand I can think of. Reading the stories in the Fiat forum shows that quite a few folks were annoyed enough to walk away completely--good for them!

· · 4 years ago

I hope Tesla can change the system for the better; many dealers have been screwing buyers for years and states like Texas actually support their unethical activities by passing laws that protect the dealerships against competition.

It's amazing to me that Texas keeps voting against their own best interest by electing people into office that support this kind of behavior.

· · 4 years ago

Not only legal, but I don't understand what is unethical about it. Could you elaborate?

Also - forcing a customer to sing for his documents is not unethical either - though in many cases it may be distasteful.

· · 4 years ago

Simple supply and demand. No different than the hot housing market of CA right now.

Dealers are independently owned and has no interest to be "loyal" to service the automakers of which the cars are from. They are there to maximize the profit.

This should be served as a perfect case why Tesla does NOT want dealers to get involved in their sales network...

· · 4 years ago

I was going to follow up with some snarky comment about "dealer ethics, what dealer ethics?" But I googled, and in fact there's a dealer code of ethics - I had no idea.

Anyway, if you read it - this kind of thing might "slip through the cracks" (cracks big enough to drive a Humvee through) - the "financial services" paragraph covers only the documents, and though at first glance it seems the "advertising" ethics may count - "This dealership is committed to advertising its products and services in a clear, conspicuous and accurate manner" - this advertising we're talking about is by Fiat itself, not a dealership.

So still - not unethical, even by the dealer group's own low bar.

· · 4 years ago

In unrelated news, Nissan noticed another uptick in Leaf sales/leases, and Rustoleum inexplicably ran out of bright orange paint...

· · 4 years ago

They killed the Dodge Circuit, they killed the whole ENVI program and they bait & switch on this. Chrysler is gonna fall behind on EVs and that will haunt them down the road.

· · 4 years ago

@Spec: It's not Chrysler that's the problem here. It's the dealers.

· · 4 years ago

Whoa. Perhaps Davids-2's ethics need a little investigating too. In my book this is called bait and switch. "When some customers got ready to finalize the paperwork and pick up their cars, they were handed monthly lease offers of more than $300."- So they came to pick up their cars and then were told the price is 100 bucks more. Very ethical.

· · 4 years ago

Pretty simple lesson here - Tesla's right, car dealers are pond scum. And next time Chrysler wants to make a move to incentivize buyers, they'd best just issue rebates (preferably payable at signing for maximum effect) directly to those buyers, not indirectly route the cash through dealer incentives. At least that way, dealers profiteering by marking up cars over MSRP will be running their game right out in the open.

Speaking of which, I remain convinced that government incentives should be reduced by any amount paid over MSRP. The whole point of those incentives is to close the supply/demand gap between the cost of making EVs and what people are willing to pay for them. If someone's willing to pay $1000 over sticker for a car, they clearly can get by with $1000 less help.

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