Dealer's Tricks - bait & switch, etc.

user777

But, I'm sure you have your vices somewhere, expensive wine? cheap hookers? {did I say that out loud?}

peace.

my vice is edmunds. truely it's cheaper to talk about troublesome or expensive cars than it is to "own" them.

snakeweasel

You can't really call it an asset cause it's devaluing on a monthly basis

Actually since it has value it is an asset regardless if it is depreciating or not.

A car is a bad investment regardless.

This always cracks me up, if it such a bad investment why buy a car at all. Unless one lives in a very urbanized area with good public transportation one needs a car. If you live in a suburban or rural area try living without one, then you will see how good of an investment it is. Yeah owning one costs me a few grand a year but it allows me to make a lot more each year by getting me to my job. It save me time because otherwise I would have to walk to the grocery store (and most likely make more than one trip). Get my drift.

gsemike

What you have to consider with a paid off car is that the NPV of the cash flow of money saved by not immediately getting into another new car is greater than the retail value of the car.

Let's say you pay off you car in 5 years. By that time, it's worth $6000 retail but you'll be able to keep it another 3 years (conservative estimate).

Let's say the typical 8 year old car will go up to around 100k miles. Most well maintained cars should be pretty reliable up to that point so you shouldn't be getting killed on repairs.

So now you're driving a paid off car with most likely lower insurance than the new car that you would have gotten in to. So again let's say that driving the paid off car with no payment, higher maintenance and lower insurance nets you $300 a month net gain in cash flow. By keeping that car for three years, you're saving ($300 X 36) = $10,800! Maybe after another three years, your 5 year old $6000 car has depreciated into an 8 year old $2000 car, you're still $6,800 ahead!

Again, I'm not talking about driving some sorry old clapbox that you'd be embarassed to be seen in and will leave you stuck every day. We're all car enthusiasts and know something about a car, so driving a car for 8 years and 100k should be no big deal.

I know that I've said alot of "let's say" but at a high level this shows how much more than $6000 a $6000 car can be worth.

rroyce10

..... I think your missing the point here ... nobody is knocking leasing and nobody is knocking the purchase aspect ....

As far as: "A car is a bad investment regardless" .. that goes on a minute to minute basis on just about anything you purchase ... that includes that $900 couch that was dropped off yesterday and now it's worth maybe $200, or that new set of $1,500 Callaway's that might be worth $400 without even hitting the first ball ... that's the flea's that come with the dog.

There is nothing wrong with leasing - as long as the folks truly *understand it* and do it for all the "right" reasons .. saving $50 or $75 a month is probably not the right reason ..

Like my Great Grand Daddy used to say: "if you're that close to the fence, then you shouldn't be playing in the yard .."

Get my drift.?



Terry

snakeweasel

I wasn't commenting on the "is lease good" argument. I was just commenting on the comment about if you could call a depreciatble item an asset (yes you can). And that a car is a bad investment (for many it is a good investment),

Kirstie_H

Folks, if there weren't so freakin' many off-topic posts here, I'd just move them to our Leasing vs. Purchasing discussion, where they belong. As it stands, I'm just going to ask that we stick to the topic of "tricks" in here, and carry the leasing conversation on in the other discussion. Thanks!

user777

kristie, with all due respect, arguably lease offers can be considered a "trick" and the discussion is appropriate for this forum because people without a solid understanding of the purchase vs. lease bottom-line can be placed into a vehicle they wouldn't consider otherwise.

i personally consider it a "baiting" tactic promoted by the manufacturers, and salesman "switching" the consumer (perhaps not to a different car but to leasing rather than buying) qualifies in my mind to be discussed here.

encouraging its continued discussion in another forum may be appropos, but at least to this consumer, it isn't as if we are off-topic here or haven't been discussing information which isn't worthwhile for readers of this forum.

Kirstie_H

Well, while I agree with your assessment that the conversation is very worthwhile, my opinion hasn't changed - we have to keep in mind that there are a lot of new members who pop in looking for information who aren't going to be familiar with the existing discussions. If they're looking at the pros/cons of leasing v purchasing, or whether it's a good idea or not for their situation, they're going to look in the Leasing v. Purchasing discussion, so that's where this conversation needs to continue.

stickguy

Actually, the teaser lease ads are a big come-on for a bait and switch type scenerio. That is, the super low payment catches the eye, and people show up at the dealer because of it. Of course, the buyer never read the fine print to realize that the ad car is a VE manual that A) they don't want, which is OK because the dealer doesn't stock.

Sure, they can do the same thing with a ultra low sales price. I think it is easier, however, on a lease teaser, because the dealer is one step ahead since the already attracted a payment buyer. Much easier to upsell a $249 Jetta lease into a $349 Jetta lease, than it is to convince someone to buy a 24K car instead of the 18K one included in the ad.

But, as long as the dealer actually has the advertised car reasonably availabe, and is up front about what it is, there isn't really anything wrong with the practice.

besides, most of these teasers are actaully manufacturer programs (like the referenced VW programs), which to me is even cheesier.

allfiredup

I think this falls under "Dealer Tricks"..

I was quoted a very fair price on a new Mazda3, around $1200 off MSRP. At the time, I hadn't mentioned anything about my credit. My credit score is low, but not as bad as it could be- in the low 600'x.

I told the salesperson that I needed to finance and completed the application. He came back with a rate of 11.99%, much better than the 19% I was quoted by another dealer. The payments were going to be $332 for 72 months.

While I was much happier with this than the $423 for 72 months the other dealer quoted me, I still thought I'd check the numbers. Turns out that my payment should only be $303 for 72 months. I emailed the salesperson and asked him what was up.

It turns out they'd added a 72-month warranty (not sure how many miles) to the car. He said it helps banks who are loaning to higher risk customers. This sounds like a load of B.S.! Is there ANY truth in that?

Needless to say, I told him it wasn't going to happen. They dropped the warranty and I got the original price I was quoted.

dino001

If I were you, I would not be as quick to dismiss that warranty thing. Surely, it does not give a good impression when they sneak it to you bill without asking (I suspect a nice premium and the bank explanation is probably load of %$!@ but maybe not), but if you could get a better price on the warranty, it would be a thing to consider, since
1. You credit is low.
2. You try 72-month loan on $18K car, which suggests you are not making a lot
3. If your trasmission drops at end of 4th year, you'll still 2 years of payments left (i.e. quite a few grand).

Actually, if I were a bank, I would REQUIRE extended warranty on low-score (higher risk) people. They either already proved they tend to ditch their obligations when it gets tougher, or they are deemed as ones that might just do so due to some adverse circumstances in their life already. $1500 for a rebuilt engine/transmission may be a tipping point.

Heck, I might even require on all loans beyond standard powertrain warranty having extended coverage (as they do on collision/comprehensive with max $500 ded), but that's just me...

bretfraz

The same exact thing happened to me many years ago. I got a great deal on a new car, applied for a loan with sketchy credit, I was approved for a loan but had to accept the extended warranty to get the bank to OK it. I went thru with deal then about 30 days later, contacted the dealer's GM and got a full refund of the warranty cost. The F&I mgr who made the deal had been let go prior to my refund check being cut.

Now that you know you can get a nice discount on the car plus a decent interest rate, you should be able to take that deal to almost any Mazda dealer and they'll match it, if not beat it. Tell your dealer you don't want the warranty but if they want to sell you a car, you'll accept the rest of the deal. For maximum impact, do this at the dealership when you're ready to buy. Then you'll see what they're willing to do for you.

BTW, using your numbers, the warranty costs an additional $120/month. Over 72 months that makes the cost for the warranty $8640. I dunno but that seems a tad pricey to me. I'd imagine you could buy the same warranty for about $500, or about 1/17th the cost of what the dealer is charging you.

stickguy

you mixed up 2 deals. It actually added $29 to the payment, still a pricey $2,088, although that is financed, and I am too lazy to dig out the old financial calculater to back into the PV.

allfiredup

1. You credit is low.
2. You try 72-month loan on $18K car, which suggests you are not making a lot
3. If your trasmission drops at end of 4th year, you'll still 2 years of payments left (i.e. quite a few grand).

Actually, the dealer was the one who wanted to go 72 months, not me. My plan is to still pay it off in 60 months or less. Using 15% of my net monthly income (a good amount according to most financial websites), I could afford around $400 per month.

I can see how it does provide additional protection for the lending institution. As you mentioned, there might be a "breaking point" and a $1500 transmission or similar could be it. It also makes sense that if they end up reposessing a car, they'd rather have it running than not.

It just stinks for people like me who have had problems in the past and are trying to recover. I knew going into this purchase that I'd have to pay a lot more than I ever had, but that doesn't make it much easier. Banks just look at a credit score, they really can't differentiate between deadbeats and folks who've had bad luck, health problems, etc.

Anyway, I got out of the warranty and kept my good rate. The car has a 4-year/50,000 mile warranty, which seems fine to me. If it gives me trouble after that, I'll sell it.

jipster

The Mazda 3 is a very good and reliable car...so the odds are in your favor you will never need any "major" warranty work. I believe Mazda gives you 1,000 miles before warranty expiration to buy additional extended warranty. If you changed your mind in the future you could get independant coverage for the additional 2 years for less than half of what you were quoted. Anyhow,congrats on your new ZOOM ZOOM!

gsemike

Who is good to go to to buy an extended warranty when the car isn't brand new anymore? My car came with a 4/50 powertrain waaranty but I intende to keep in well beyond that so I may want to get an extended warranty when the basic expires.

asafonov

The Mazda 3 is a very good and reliable car...

Good, no doubt. Perhaps even great, the best compact in the NA market. But reliable? These came out in what, 04? I will say these are reliable 8 years from now. Of course they are reliable now (with a nod to weak A/C and CEL reports) - they are practically new!

jipster

In my opinion warrantydirect.com is the best place to go. I've been thinking of extending the coverage on my Mazda MPV...will go with them if I do so.

jipster

Excellent reliability scores and a better than average score in predicted reliability from the infallible people at Consumer Reports.(Best Buys for 2006 Buying Guide)

audia8q

Before you make the terrible mistake of buying an afermarket warranty head over to the extended warranty board and read the horror stories.....no sane person would ever buy an aftermarket warranty if a manufacturer backed warranty is available.

mitzij

Have you had any claims processed through warrantydirect? I haven't dealt with them.

allfiredup

Good, no doubt. Perhaps even great, the best compact in the NA market. But reliable? These came out in what, 04? I will say these are reliable 8 years from now. Of course they are reliable now (with a nod to weak A/C and CEL reports) - they are practically new!

I was having this same discussion with a guy at the Mazda dealer. Before the extended warranty came up, he was going on and on about how reliable it is. I said it's hard to gauge reliability after only two years on the market.

The good news, though, is the Protege was a solid, reliable car. I know two people with Proteges over the 100k mark and no major failures.

530ir1150r

Extended warranties are insurance policies. The buyer is betting the car will break down; the seller is betting it will not break down. Ask yourself, "Who knows more about the vehicle?"

manamal

I don't buy extended warentees on anything (except PDA's). The only time where it might make sense is if you are financing for an extended period, and you can not afford repairs while financing.

gsemike

My car is an 03 Altima w 31k on it. The 3/36 bumper to bumper is coming to a close and then it has 4/50 powertrain warranty. Can I still go back to Nissan and buy the extended warranty? Would I go to the dealer or Nissan customer service?

Also, with the Nissan extended warranty, am I beholden to Nissan for service? I've never been impressed with there service department. Nothing is ever a defect with them. They wanted to charge me $40 to inflate the tires because it was pulling when the car was aweek old.

jipster

Though I would not characterize anyone purchasing an aftermarket warranty as "insane"(a bit rude don't you think?)...I would agree that buying a manufactuer backed warranty is a better idea. Unfortunately, in many dealerships they are not available(my Mazda dealership did not offer manufactuer warranty), are overpriced, ... or warranties are available but are through an aftermarket business. You get a bottom line price from warrantydirect.com, without having to haggle, with a lot of options to choose from.

jipster

"Have you had any claims processed through warranty direct?"

No. I haven't purchased a warranty with them...I was considering it. I did get a price quote from them on my 2004 MPV though. They e-mail me about once a month trying to get my business. If my MPV continues to be reliable(knock on wood) then I will probably forgo purchasing an extended warranty. I still have about two and a half years to decide.

mark156

This is just my opinion but I've never considered buying an extended warranty. First, I would think any Japanese car would be OK so why spend the money when they generally are trouble free?

To me, the cost of the extended warranty will go really far on a major repair. I get Motorhome magazine and it seems there is always someone complaining about an extended warranty issue that is not covered. Extended warranties on motorhomes run in the neighborhood of about $5,000 from what I've read.

The anxiety brought with all the "if's" of what is covered would give me a big ole headache. :sick: I would just find a good mechanic that you trust and pay for the repairs as needed. I think most extended warranties have deductibles and require that the "company" be contacted before any work is approved, etc, etc... so much red tape. :confuse:

So, I stay away from anything but what comes with the car... the manufacturers warranty!

Mark

mitzij

Excellent post!

You've hit the mark, Mark!

allfiredup

I bought five new Honda/Acura vehicles between 1989-1996. They always pushed the extended warranty very hard. My response was, "Why would I buy it? Are you telling the car won't last 100k miles?" That usually shut them up.

lhess

Car salesmen are such nice people?

Read this one:

http://www.idahostatesman.com/apps/pbcs.dll/article?AID=/20051213/NEWS02/5121303- 37/1029

michaellno

I guess I'm surprised that he paid almost $32K for the RAV4 to begin with!

I'm thinking the Toyota salesman added every option in the book - credit life, mop 'n' glo, extended warranty, etc. and made a nice commission on the deal!

qbrozen

geesh. I didn't think it was possible, either. But I just went through Edmunds calculator and clicked every silly little option I could (mudflaps, security system, hood protector, leather steering wheel, etc, etc), and came up over $31k!!

stickguy

my first thought was why is that guy driving in the first place (and buying a new Toyota), but it seems that even that wasn't supposed to happen, although it certainly isn't as fishy as the Ford deal.

If I read that right, the Ford dealer just did an even swap? No money back? If that is the case, someone should go to jail for grand theft!

yes, I know all about signed contracts and knowing what you are doing as a buyer, but this is exactly the reason that there are laws against ripping off incapacitated people.

Not giving a great deal is one thing, but there has to be a line drawn somewhere. I think that's the basis of the "prudent man" defense.

lemmer

As an aside, I wonder how fairly the Toyota dealer treated him when he bought the RAV4.

michaellno

That was sort of my point, but I guess I didn't make it clear.

How many fully (and I mean "fully" like qbrozen points out) RAV4's does Toyota make? My thinking is that he got taken on the original deal as well as on the deal on the Focus - though, I will concede, that $16K doesn't seem like an "excessive" amount for that car, unless it was a stripped "S" model.

chuck1

There are two scary things here---
That the Salesman at the Ford dealership can look at himself in the mirror in the morning---(come to think of it, he is probably the top salesmen at the dealership!) and that old guy still has a drivers license! I think the family will settle out of court of a nice little sum to pay his nursing home care for a few months!

allfiredup

I'm more concerned why someone who lives in the Alzheimer's wing of a care facility is allowed behind the wheel at all!!!

chuck1

I agree with you. The thing is that a family member cannot waltz in to a DMV (in most states) and simply demand that a drivers license is revoked. I know, I had a situation with my mother-in-law. It can involve Doctor's statements, etc. Then if there is a vehicle involved in their name, they may not (in many cases) wish to sign the pink slip so it can be sold. To take away a license and a car from an elderly relative CAN BE very involved....

bdr127

First of all.... $32k for a RAV4?!?!?! Are the wheels made of gold or something?!?! :P If the guy really paid $32k for his RAV4, then the family better be going after the Toyota dealer, too!!!

Anyways, since he only had 16 miles on the Toyota, then he clearly just bought it..... Yet the family is complaining about the Ford purchase, saying that the dealer should have known he had dementia, and that the family was trying to take away the man's license.

So if he just bought the Toyota 16 miles ago, then why aren't they all over the Toyota dealer, too? Hmmmm... I'm confused here.

Granted, the guy clearly did not need a new car and the dealer knew it..... However, if you are an adult and you say, "I'll buy this car for that price" and sign paperwork, a dealer can't descriminate against you because you're "too old." It's a tough call, unless you have a sign around your neck saying that you do not have the ability to make sound decisions.

bdr127

Just to play devil's advocate, imagine if the old confused man went into the Ford dealer and really wanted to buy the Focus... but the dealer thought he was too "old and confused" to buy a car, and turned the guy away. Don't you think that would have pissed the guy off, and perhaps even raise a discrimination suit? Interesting to think about....

He might have been "disoriented", but don't we all know a lot of older folks who might be described like that who are still capable of buying a car?

bdr127

If he is truly that incapable of making his own decisions, then the family should have already had a power of attorney in place. A power of attorney would give them the ability to effectively retroactively void the car purchase, plus they also would have been able to cancel his driver's license prior to all of this....

allfiredup

We had the same situation with my grandmother. She is 86 and mom took away the keys to her Sedan de Ville a few years back. It's kinda sad and I know it depresses her that she can't get herself around and she probably was and still is able to drive. But for someone with Alzheimers, it's just scary for them and everyone else on the road. Makes me think of that story a few years back where the old man lost control and plowed into a crowd of people. That was in Arizona, I think.

In any case, sounds like the Toyota and Ford dealers involved are scum.

stickguy

in the law. If the person seems reasonably sane/coherent/whatever, and looks to make a purchase that is reasonable (such as a RAV4 at a relatively normal price, even MSRP), I don't see how the dealer can be guilty of of anything other than doing business. I'm sure lots of people walk in and pay sticker when they are asked.

But, if someone comes in an obvious state of confusion, or looking to do something that any reasonable expert (and in this case, the dealership people aree experts) would know to be unreasonable, they have an obligation to not take advantage (aka rip them off).

SOmeone with a brand new car that confuses a Ford dealer for a Toyota dealer, and seems to think trading it for a car 1/2 the price (I'm assuming there was no large check written back to the guy) after the salesperson suggests it is a good idea, now that has to fail the smell test. That's why the Ford place is getting strung up here.

Although, it would be somewhat less cheesy if they gave him a high trade in/good deal on the FOcus, but somehow I doubt that happened.

chuck1

"A power of attorney would give them the ability to effectively retroactively void the car purchase, plus they also would have been able to cancel his driver's license prior to all of this...."

Yes, but you can't wake up one morning and just tell them to sign a power of attorney. If they don't wish to do so, then you need a lawyer, proof of mental capacity, (or lack there of) and then a judge needs to rule in your favor.

Again, VERY INVOLVED!!

mark156

Hello Jason, I think I remember that story about the man who plowed into a group of people. He was in Santa Monica California and was 86, I think.

My neighbor had to move into an Alzheimers facility about 4 year ago. She still is a delightful women of 86 but her memory is going really fast. She would drive her new Bright Burgundy Cadillac Eldorado to the store and get lost on the way back. She ended up in the "bad" part of town and would stop at a convenience store to ask directions home. She would hand her wallet to anyone who was at the store to call her son for directions home.

Thank goodness she was helped and not attacked. Soon after, her daughter had her taken for evaluation and put into a facility where she would be safe.

Funny thing, my neighbor doesn't remember every living in the complex that she lived in for 25 years. It's sad. I ended up buying my neighbors townhouse and I think she would have been pleased to know it's in good hands.

I would have liked to have purchased the Eldorado too because it only had 11,000 miles at 3 years old but it got away to a family member.

Mark

allfiredup

My grandma's '93 Sedan de Ville only has 32,000 miles on it. It'll make a good car for someone someday. Of course, the A/C compressor and head gasket have both had to be replaced. Standard of the World my butt!

boomchek

The guy does look kinda happy in the picture though.

Once in a while I run into customers that are "not all there".

I am nice to them and don't sell them anything.

manamal

First of all, I know paramount park in Boise; my aunt was a resident of the place. It is not a nursing home; it is an assisted living facility. In the assisted living facility, the patients can come and go as they please (though they have to sign out). It also has an Alzhimer (sp?) wing attached.

Second is remeber a while ago, a dealer in CT got in in trouble because they "befriended" a mentally disabled man. Sold him a new car every few months. I believe they got into a lot of trouble over this.

Third comment: I am sure the honest salespeople, like Isellhonda, would simply help get them to the toyota dealer. The guy comes in with a new rav4 complaining about a battery issue. Ford salesperson tells him he can fix the problem by putting him in a new Focus. Ford person should have directed him to the Toyota shop. The salesperson should be fired, IMHO.

prosa

According to the linked article, the man's daughter is his legal guardian. That sounds to me as if he already has been found legally incompetent and therefore incapable of managing his own affairs. If so, his transaction with the Ford dealership (and possibly with the Toyota dealership too) was legally invalid, just as if they had sold a car to a child.