Ford Motor Credit Co. said more than 2,000 dealers have signed up to sell WearCare, a program that gives Red Carpet Lease customers the option of buying protection against charges for excess wear and tear.
Tim Gates, Red Carpet Lease manager, said most customers do not get charged at the end of a lease for damage such as dents, scratches, paint damage, carpet stains or tire wear. The few customers who are charged pay an average of $500 to $600, he said.
'If I were a customer, I don't think I would like having that kind of a charge tacked on at the end,' Gates said.
For $8 to $12 a month, depending on the length of the lease, WearCare covers up to $2,500 in damage. Gates said the coverage would cost consumers an average of around $300 per lease.
Rival lender Chase Manhattan Auto Finance unveiled a similar concept in May, saying it will waive up to $1,500 in wear-and-tear charges.
There is no free lunch in either case. Chase raised its lease fees by $100, to $595, to cover the cost. The coverage is standard on all Chase leases.
Ford's WearCare is optional. Statistically, most people do not need it. Gates said only about 15 percent of Red Carpet Lease customers are charged for excess wear and tear.
He said Ford dealerships, not Ford Credit, inspect off-lease cars for damage. Many other lenders do the inspections themselves. That means they are sometimes more picky than dealers, and the charges hit the customer by surprise, long after the customer has left the car at the dealership.
Typically, Ford dealers require wear-and-tear charges only on the worst cars, he said. 'The dealer has no motivation for charging the customer. That brings the frequency of charges down, but it also brings the size of the average charge up,' Gates said.
He said that despite the odds, customers may feel WearCare is worth it, for peace of mind: 'A lot of people are worried about a shopping cart careening through the parking lot and hitting your car, and you're going to be stuck with a big bill.'