14 September 2008

New Car

While I was down in Durham yesterday, Urmi and I decided to go out car shopping. Her old car was falling apart, having been broken into once (with minor damage) and it was going through coolant quite quickly. So we went down to a dealership with the intent of looking at Toyota Corollas, then coming home to think about it. Naturally, dealers don't give you many chances to think about buying the car, just keeping you busy and redirecting your attention to maximize their profit.

Fortunately, I think we ended up with a decent deal of a car -- a 2009 Corolla LE that had been driven for a few thousand miles by one of the employees. Photos available (from Toyota) here. This knocked $2k off the price tag, which was quite hefty even for a Corolla. After Urmi's internship and with my new job, we had enough saved up to put down a decent chunk of change -- over half the price -- which gave us a better interest rate.

What I want to talk about the most is the shady practices by the financial department. Once we had decided on the car, we were pulled back to meet with the financiers to talk about paying for it. He mentioned this extended warranty, gave us about a 30 second spiel on it, then moved on to other matters. He never gave us a chance to decline the extended warranty coverage, which amounted to over $2700. Moreover, looking back at the exchange, he was very careful to distract us with personal anecdotes every time we signed papers related to the warranty. This sort of deceitful behavior on the part of financiers is why most of America is so heavily in debt. We went in preparing for about $9000 of debt, but we walked over over $11700 in debt. This is absolutely ridiculous and, in an enormous number of other professions, would be termed deceitful, if not illegal. Urmi went in this morning to see what we can do about it, but my hunch is that the answer is nothing -- after all, we signed the forms agreeing to it.

I'm just glad we caught the fast one he tried to pull with the loans. They offered two terms of financing -- either 6.99% APR for 60 months or less, or 7.99% for 72 months. He was most insistent that we take the 72 month loan, even telling us that the 1% difference in APR amounts to "nothing" in the end. This is totally bogus. The difference was almost $1000 in interest payments, even for our paltry loan. I can only imagine the difference for those poor people who end up with the tank-like SUVs.

The Corolla is quite nice, though. This is the first car we've ever owned with cruise control, power windows, and all sorts of crazy luxuries which we probably don't need. The car is bright red (which Urmi found somewhat irritating, but I think will grow on her), with a light brown interior. I think it's a great car, I just wish we didn't feel like we had been cheated.

Update: It appears we can remove this warranty from our car, although the financier tried to, again, convince us that we had agreed to it. I realize that consumer economics often works this way, but this sort of deceitful practice really seems suboptimal.

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