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I recently bought a used Corolla at a Toyota dealership, I have yet to pick it up. Over the phone we were told a bunch of BS which turned out to be false once we saw the car (it had more mileage, was NOT certified etc..). So, through negotiations, we were able to get 14K "out the door" and an additional bumber to bumper warranty for 36K miles at NO COST.

Through financing, our rate was 9% and so we were told that resulted in a monthly payment of $280/mo for 14K "out the door".

They fudged with the numbers and charged us 7.84% for 16K total claiming that they had to fudge with the contract to "get us" our exteneded warranty because it was worth $2000. He even showed us that the total interest was still the same at $4152.
Once I got home, I plugged it all into a loan calculator and found out that 14K out the door @9% was really $250/mo and, yes he was correct that $4152 interest would be paid, but he forgot to mention that increasing our total to 16K upped our principal by $2000

2007-01-03 19:42:07 · 3 answers · asked by Betsy1 1 in Cars & Transportation Insurance & Registration

3 answers

You've fallen victim to what is pretty standard practice in the industry. Most dealers play fast and loose with the numbers in the hope that you won't be able to keep up with what's going on. And they're usually right on that score.

Sadly, this is all quite legal most of the time. The only thing that matters is what's in writing on paper. This is why it is SO important to carefully review everything before you sign and take delivery. Compare every number on the contract with what you THINK you negotiated and question and challenge everything that isn't clear.

It typically takes about 30 minutes to read a sales and finance contract and the dealer is banking on the fact that you won't take the time to do that. They'll often create a small circus that makes careful review nearly impossible with several people popping in and out of the office to congratulate you on your purchase, compliment you on your negotiating skill or sign some "meaningless" piece of paper. If you challenge anything they may say, "It's standard practice, everyone signs that." or "It's the law, we have to do it that way."

The best defense against that is to pick up the unsigned contract and say, "OK, let me take this home and review it at my leisure. I'll get back to you tomorrow sometime and we'll arrange to sign everything then." Then do just that! Don't be bullied by claims that that is "illegal" or "We don't do business that way."

The biggest thing you have going for you right now is that you haven't taken delivery. If I were in your shoes, I'd just call them up and tell them that in a moment of sanity you've decided to scrap the deal. There is a lot more funny business going on here than meets the eye.

First off, at 9% on 14,000 the loan term would have to be 6 years to get the payments down to around $250.00 ($252.36 to be exact.) $16,000 at 7.84% for 6 years works out to $279.28. There's something funny with their numbers as they don't work out right. The total finance charge doesn't work out quite right either with either set of numbers.

Also, $2000 for a 36k extended warranty on a Toyota -- one of the most reliable cars on the road today -- is quite simply a rip-off; pure profit for the dealer and worth exactly $0.00 to you.

Personally, I always bring a financial calculator with me if I'm considering financing a car through the dealer. There are several nice ones on the market for around $30.00 or so. Not an ordinary pocket calculator, but one that does loan calculations such as the TI Business Analyst. The numbers you get from that should be within one or two cents on the monthly payments and within 50 cents on the total interest charge and total of payments.

Better yet, get pre-qualified at your bank or credit union. You'll go in the door knowing how much you can spend and what the payments should be. This way you can compare the dealer's offer with your bank and select the best deal. (Dealers often can get you a better deal on the financing but they'll only offer you that if they think you'll go elsewhere.)

Toyotas are good cars and are in high demand. They're well built and reliable and the dealers know this. As a result the dealers tend to have an extremely cavalier attitude towards the customer. Toyota dealer practices are some of the worst in the industry in my opinion.

The local Toyota dealer here (SW Missouri) also sells Mercedes. If you walk into the Mercedes showroom, they treat you like royalty. They shoot straight and are willing to deal with you. No funny business what so ever. I love doing business with them. But if you walk next door to the Toyota showroom they're the biggest bunch of wolves and leeches I've ever had the displeasure of trying to work with. If I were buying a used Toyota -- and I'm considering it right now -- I'd work with the guys in the Mercedes showroom. Nuff said!

2007-01-03 22:22:05 · answer #1 · answered by Bostonian In MO 7 · 2 0

You should probably consider asking an attorney for advice on this matter. It seems like based on what you're saying, this could turn into a lawsuit. I'm not sure if you signed contracts yet, but if you did you can probably get your money back for what they have done for you. The district courthouse has lawyers always ready. You can ask the district attorney for advice on what to do. Every city and state has different laws on how to deal with dealership scams. A toyota dealership actually did the same to my cousin, except he wasn't able to offer us a good price for a Toyota Camry. So we went to another dealership that gave us a better price.

Good luck.

2007-01-03 19:56:44 · answer #2 · answered by Anonymous · 0 0

I once got ripped really bad on a lease, I brought the car back a week later and dropped the keys with the receptionist and contacted a lawyer for a consultation,, like for 50 bucks. he fired off a letter and talked to them and the lease went away. Since you didn't pick up the car yet that's in your favor. Just talk to a lawyer, maybe a friend or family member has done business with one before, or just call one for a consultation, a letter form a lawyer ought to do it.

2007-01-03 21:28:19 · answer #3 · answered by Anonymous · 0 0

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