A mild scam exposed

Miscellaneous and Personal Stuff I Must Share
1

i got a letter from the Toyota dealership where I bought my car in late 2019, telling me that if I sold them my 2020 Corolla they would give me a brand new 2022 Corolla AND lower my monthly payments by 75 bucks.

“Yeah, right,” I said and ignored the letter.

Then I got a phone call from a saleswoman at that dealership, reiterating the offer.

“Sounds a little too good to be true,” I told her. “You can’t really give me a 2022 model and lower my payments by 75 bucks, can you?”

She insisted that they could and I should come into the dealership and see.

Before I came in, I figured maybe it was possible, if they were having a lot of demand for used cars with low mileage, and there was more profit for them in selling used than in selling new, for some bizarre reason. I also figured out that I’d have to start a new 60-month payment schedule on the new car, and I’m already halfway to paying off my loan on the 2020 car, so it wasn’t as sweet as it seemed at first. I computed that it would cost me 2 and 1/2 years of extra payments, minus the 75 bucks per month I would save on the lower monthly payment, resulting in a net loss of about 4 or 5 thousand.

Still, that didn’t sound terrible. 4 or 5 grand for a two-years-newer car seemed like it would be a good deal, especially if they’d added some new things that my 2020 car didn’t have in the standard package—safety features, or a new bell or whistle.

Long story short–it was all bait and switch.

When I got there, they told me, based on their inspection of my car and blablabla, the best they could offer was the SAME payment, So right off the bat, my 4 or 5 thousand now doubles. So no deal.

But the saleswoman, of course, has to haul her manager out to sweeten the deal. This zhlub offers to give me a payment 50 bucks under what I’m now paying. I think it over, review the contract–BUT WAIT!

The loan is not a 60-month loan anymore, now it’s a 75-month lease. So I’d be paying 50 bucks less, but for 15 more months. How is that a better deal, I ask.

The manager keeps shifting numbers around, less money for more time, more money for less time, the same money for the same time but with a heavy down payment, and I keep pointing out that it’s all about the same, and it’s all an unattractive offer, so no thanks. Fifteen minutes later, I finally get out of there, after repeating my point a few times: “I’m not getting what I came in for, which is 75 bucks less and a 2022 car.”

So if you get a similar offer, this is probably what’s going on. No free lunch. (They did offer me a cup of coffee while I was thinking it over.)

2

Not really mild, if you hadn’t kept your head about you the result could have cost you thousands of dollars. Or more because you don’t know what else they might do before you actually ended up with that new car. Could be the lease means you don’t even own the car when you finish paying for it or you still how a huge payment at the end. It’s possible that what they are doing is not allowed under your states consumer protection laws because it is a ‘bait and switch’ operation where they had no intention of delivering the ‘bait’ even if you wanted it.

3

Beware the Four Squares:

It’s still in wide use today. It’s a financial shell game to the uninitiated.

4

See if any of your local news outlets has consumer protection reporters and contact one. I believe this is a sweeps period and they could be interested in attracting viewers with this.

5

The minute the word “lease” drops from their mouths, I’d be out the door.

~VOW

6

I was in my mid 20s when I bought my first new car, and I was a total neophyte to haggling. A guy who worked sales at the company I worked at said he was a master haggler when it came to buying cars, and gave me some pointers.

Thanks to his pointers I got what I thought was a good deal on my new car, and decent trade-in value on my old car.

Then the next day the guy who gave me pointers asked if he could see the contract I signed. He looked at it and said, “the interest rate through GM Financial is pretty high (it was something like 12.25%, which even in the early 90s was kind of ridiculous, but I didn’t know better), and did you actually want all these extras? You know, you have 72 hours to renegotiate this contract, and you can get a lower-interest loan through your credit union if you have one, you don’t have to go through GM Financial just because you bought a Chevy”.

All those extras he pointed out were things the car salesman had asked me if I wanted, I had verbally refused them, and he went ahead and put them all on the contract anyway, knowing I would probably sign stuff without reading it. I was pissed. I went back to the dealership and said “remove this and this and this and ….etc.” They were not happy. I think they went ahead and gave me a better deal than they might otherwise have, thinking they could screw me on the nickel-and-dime extra stuff. When they asked me, none too friendly now, why I decided to take all the stuff off I was too embarrassed to admit I never wanted it in the first place and hadn’t read the contract, so I just said “eh, changed my mind”.

I ended up with a slimmed down contract at a significantly lower interest rate.

7

30-some years ago, my husband went car shopping without me, then brought me back that evening to do the deal, since I managed our family finances. I knew what we could afford without even looking at our budget.

We arrive, baby in arms, and the salesman pushes the papers at me to sign. The payment was way more than we could manage. He did the back-and-forth dance with his “manager” but the numbers still wouldn’t work for us. When he put his “final” offer before us, I stood up to leave. I wasn’t playing games - we simply could not afford it.

All of a sudden, the payment came down. So there was that. Unfortunately (yeah, we were dumb) it was a lease and because of where we lived, we had a long commute, so we’d end up paying the mileage penalty at the end. BUT at that point, we got smart enough to go to our credit union and get a loan to buy it outright. And never again did we use dealer financing.

It was a lesson for us, and we’ve learned a lot about doing research before shopping. Unfortunately, I’m married to a car guy, and he buys with his heart, so we’ve had several vehicles that we should never have gotten, but that’s another story…

8

Thanks for wasting my time. Bye!
And walk out.

9

Sadly, cynical is the best default state to be in.

10

This. Walk away from any business that treats you this way. By continuing to negotiate with them, you’re perpetuating their dishonest business practices.

11

The SAME payment was bad enough, it told me I would need to think about what the numbers looked like after I crunched them (and it didn’t look good) but the killer part was my noticing that the term had been extended to 75 months without their happening to mention that little fact.

I think that’s how they make their money, pulling shit like this on hundreds of people, a few of whom fall for it.

It wasn’t a total loss, however: I could never get my navigation system to work so I popped into the service bay and asked if they could help me set it up. After a few mechanics took a look, it turned out that, oh yeah, the 2020s’ navigation system only works with an Apple phone.

12

If you want a used car, do your research and buy it at an auction.

Research the car you want: There’s lots of info on reliability, running costs etc online. Then go to an auction and watch how it works. It is fast - really fast. Cars get sold in seconds and you have to be quick to get what you want at a good price.

You know the make/model, age and mileage you want and see one on the list. You find it in the park and have a look - dealers often ‘pop the hood’ and dip the oil, but sellers can make a heap of junk look good. More reliable is the state of the interior and knowing where the car came from. Ex-hire cars are good for example.

Once your bid is accepted the car is yours (you usually have to register as a buyer to prove your ability to pay) and if the worst happens and you bought a pup - you put it back in the auction and cut your losses.

13

It amazes me when I see people pay that much money for a car. I’m 54 and have never borrowed money to buy a car. And it’s not because I’m wealthy. Not making a judgement here, but I just find it interesting. YMMV, of course. :slight_smile:

14

this is correct, isn’t it? Volume?

Mail offers out to a million suckers, hope a few hundred make it into your showroom, and a dozen or so of those actually agree to go along with the scam? And if you upsell half of those on the first few rounds of “negotiation”, well, there’s your profit margin for the month…

15

When I bought my last car, the salesman brought one out, despite me telling him that I sold RVs for awhile and was paying cash for the car. He plunked it down on the table and I said “A four-square sheet? Really?” He looked embarrassed and said his manager required it. But I wouldn’t sign it. Whoever came up with that 3-card monte scheme was brilliant, but most people are onto it these days.

16

The “mild scam” cited in the OP is part of a repertoire of dealership payment scams.

“The biggest mistake when negotiating for a car is to focus on the monthly payments.There’s nothing that will make a car salesman salivate more than a “payment buyer” - that’s what they call these suckers.”

17

When i was a young pension actuary, taking an exam on compound interest, many of my peers bought houses and cars. And of course, we all checked the numbers.

Every auto dealer had cheated. That is, the payment didn’t match the started interest rate and the stated cost. One guy was told that he didn’t qualify for the advertised interested for the full amount, and part of the loan was at a higher rate. Many found that extras they had turned down had been added in. My husband discovered that the payment wasn’t based on the agree price but on list price. “She” had made a mistake. (Some unnamed clerk on whom they blamed all the “errors” he found.)

Fwiw, i don’t know anyone who found a problem with numbers from a bank. When i checked the calculation of my mortgage, my numbers matched theirs to the penny. But auto dealers?

I think one of the major benefits of arranging your financing elsewhere is that it makes it much harder for the dealer to hide extra stuff in the payment.

18

When I need a car, I just buy it. One number to negotiate.

If I needed financing, I get it privately (I’ve never had to do this, though, I always bought cars I could afford.
I sell or give away the old car privately, no trade-ins.

The salesman can just stick his four squares where the sun don’t shine.

I feel this gives me a big advantage, because you’ve greatly reduced their bag of tricks. They have to negotiate the actual price. This isn’t something they do often.

19

Many younger folks’ mileage has indeed varied. For one, the average new car price was already 10-15% higher in 2019 than it was in the late 80s/early 90s when you were getting established, and COVID supply chain issues have sent car values through the roof. For two, the ability of many people to save money for vehicles has been hampered by rising house costs. For three, for much of the 2000s, interest rates have been stupidly low.

Those three things have all made the prospect of financing a vehicle much more reasonable. You have less money saved because rent is higher, the car you want costs more because it just does, and it doesn’t really cost you that much to borrow money. On top of that, cars last a lot longer now, which means if you’re financing anyway, and you’re going to be able to keep a car for 15 years, it’s easier to justify turning a $20k Corolla into a $28k Corolla with upgrades, or a $34k RAV4 with all the bells and whistles. At 0.9% APR for 72 months for a car that you’re going to be spending a lot of time in, it can make sense.

I’m 42 and I’m somewhere in the middle – my parents always paid cash for cars but they got started in the 60s when a car cost as much as a slice of pizza and rusted apart after 3 years. I’ll pay cash or finance depending on the deal. I expect my kids will never pay cash for a car.

20

I had one a few years ago. We discussed the car/price/payments etc, they wrote it up (typed, not the four square thing), I signed and they went and got started on the paperwork. When they came back, the payments were suddenly much high. I looked at the paper I signed (which I took a picture of) and a new copy of it they brought with them for me to sign again. This one, however, included in the cost, All Season Mats ($155), Rear Splash Guards ($149), Trunk Tray ($129), Perma Plate and a $150 gift card.
I had to buy a fucking gift card to get the car.
All these items were 100% non-negotiable. Apparently this dealership doesn’t let cars off it’s lot without the winter protection package. And that $150 gift card that’s “good for absolutely anything at all” couldn’t be used for the down payment on the car (why the fuck should I be paying for it).
We argued, she brought out her manager, he got his, he got the accountant, the accountant got another manager. They all said, literally, the exact same thing when I questioned them on this load of crap. They acted like I was 10 years old and walked through each item explaining what it was and how much it costs. They didn’t seem to understand or were deliberately ignoring that I understand what the charges are, I just don’t want them.

When it became clear that this deal was about to fall apart, they bumped up the trade in value of my car by a few thousand dollars which compensated for all the bullshit.

But wait, there’s more. When I went in for my first oil change, the service writer (the messenger, not deserving to be shot, but clearly had been many times) informed me that the gift cards were no longer valid.

That was just one of many issues I’d had at that dealership. It seems like every few years it’s under new ownership, but everyone of them has been very scummy and pulled nearly identical bullshit. Now I’ll go to the far away Honda place instead of the one 5 minutes from my house…or buy a Kia, breaking a streak of something like 8 Hondas in a row.

The previous car I got there, I had worked out all the details of the sale via email. Everything was settled. Until I walked in and the manager asked me how I’d like to pay some $700 fee. Honestly, I thought he was just seeing if he could squeeze some extra cash out of me and if I put up some resistance he’d get to play the hero and have it waived. Nope. I walked out on that one, drove to the other dealership, told them what happened and explained that if they could match what the other dealership offered before the surprise fee, I’ll drive the car off the lot today. I don’t even need to test drive it. I was signing papers within 20 minutes or so.