Mind the Gap
With 127k miles on the clock, my 2010 runabout was courting some major repairs. I’ve been topping up the AC more frequently now as there is a slow leak happening and with summer rapidly coming up, I needed to do something about it. Besides, the poor old thing is looking a bit battered having survived a deer hit, a wild pig hit and a few other scrapes. Being a realist, I decided it was time for a new car.
The problem with buying a car is that I detest the car dealers and their sales gimmicks.
To prepare myself, I wanted to go in knowing roughly what I wanted, what I was prepared to pay and how I was going to pay for it. I researched different options online, I read reviews, I checked out what prices were going at in different sales channels and looked at what inventory was out there. I’d even pre-arranged an auto loan with my credit union where I surprised to find no difference in rates given for new vs used (They used to be slightly better for new.)
Initially, I was looking at a used SUV where Avis car sales had some decent offerings (Hertz had horrible prices for higher mileage) but since there is a glut of new cars sitting in the dealership lots, many dealers and car manufacturers are giving big incentives off the sticker price. I eventually decided one SUV model where there was >$5K in incentives being offered for that month. The dealer I eventually selected had around 10 cars at different prices.
The first salesman was a bit of an idiot where I was close to walking away. He could not adequately explain the different price brackets and what different packages behind that. “They are different”, he said. “I know they are, tell me why they are different”. Thankfully a second salesman took over and adequately gave me answers and test drive went very well. It came down to colors and I went with a Red. How Roman of me !
Next step was the paperwork. “Would I like to try our financing company?” said the Salesman.? No, I looked online and saw your offering for ‘well qualified’ buyers and it was terrible APR. I am happy with what my current financing. Off he goes to the ‘front office’ and comes back a few minutes later. “We will give you an incentive if you allow us to run your credit report to see if we can get better offering”. “How much?” “Uhm..$750”. “What happens if you can’t better it?” ” You still get the $750 off”. OK, sound good then. It came back with 0.5% lower than what I had from my credit union. If I was smarter negotiator, I should have thanked them then taken a few minutes to call my CU to see if they could go even lower but I’m not.
All done there, we went to back office to meet with the finance person and this is where spiv tactics began.
Paint protection? No.
Tire protection? No. But what about your rims?. It’s a not a premium brand so do you think I care about the rims and why would I want tire insurance on regular tires. I’ll just go to discount tires.
Gap insurance ? Wanting gap insurance, I inquired into what they were offering. $700 over the loan period. Holly smoke. They expect you to be financial illiterate and I asked out why you’d need for the entire duration as you’d only need it while you are upside down. (Once you are in a position of positive equity, you no longer need gap insurance). He didn’t look too happy about me pointing that out. I could get gap insurance with my car insurance company at around $6 per month. Thus, their gap insurance was many times more expensive. I also observed in some of the back and forth print outs that they do to help them haggle, the gap insurance had increased to $800. When I pointed this out, he said my bad. Really?
Last but not least, the extended Warranty. There was the platinum, gold and silver options. “After all sir, 1 car in a 100 has some defect in there that needs a repair and with this, you get piece of mind”. I responded that I didn’t believe it and if that was true, then most likely the regular warranty by the car manufacturer would take care of most of that. So what does that additional warranty get me anyhow? Turns out it really just extended out the full warranty after 3 years probably with such gotchas. For $3200, that was clearly ridiculous. He offered to lower it to $2200 which I pointed out would be the cost of a major repair anyhow and such big repairs would still likely be covered in their limited warranty.
I also noted that the company who underwrote the extended warranty was not the manufacturer but a certain Fidelity Warranty Services Inc. “Are they affiliated with Fidelity Financial company?”, I asked. “Yes”, I was told. A later looked it up and they are not indeed related in anyway. In fact, a LOT of people are complain about them. [Consumer Affairs].
Urghh, I felt so mentally dirty after all this.
Our verdict of the Parseltongued finance people who mis-sell this crap..Feed them to the Lions.