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.

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