Buyers' remorse: Fine print has important info
"You should have handed us 'Stupid' T-shirts when we walked out the door." That's what Jennifer Hopkins claims she told Brown Toyota's used-car manager, Steve Simmons, when she and her husband, Donnell, met with him last fall.
The couple were upset over the financing terms for two used cars they'd bought in July; they hoped Simmons would allow them to strike a new deal.
But Simmons, they say, was immovable; his response, according to Jennifer, was that they'd signed the contracts and should have made sure they understood the terms. It's tough to argue with that, and the Hopkinses know it. Even so, as a lesson in How Not to Buy a Used Car, let's take a look at what happened.
The story begins when Donnell went to a Brown's tent sale at Fashion Square last May 26 and bought a 2001 Isuzu Rodeo that had a cash price of $15,000. He got $1,550 for his 1990 Jeep Cherokee and put $700 down in cash. With taxes and fees, the total came to $14,113; we'll save the financing details for later.
Over the next month or so, he claims, he took the SUV in three times for servicing because the "check engine" light kept coming on. When it came on a fourth time, the car needed a new transmission. The last straw, he claims, was that within 24 hours of replacing the transmission, the light came on again– so he went to Brown's Pantops store, explained his frustration, and began shopping for a different vehicle.
On July 30, he bought a 2002 Toyota Highlander Limited with a cash price of $27,734. Trading in the Isuzu knocked the price down by $727, and the total with taxes and fees came to $28,694. At the same time, Jennifer decided to replace her aging car and bought a Toyota Scion. Although she claims she was led to believe that due to her good credit she'd get 4.9 percent interest, in fact Scion's interest rates are nonnegotiable, and she ended up paying 5.6 percent. Other than that, she has no complaints.
As for Donnell's deal, however, the couple is vehement: "We've been totally screwed" is Jennifer's verdict. She reached that conclusion, however, only after finally reading their contracts– which, she ruefully admits, she should have done before she signed them. That brings us to the matter of financing.
Jennifer claims that their saleswoman, Kimberly Koltz, said they could improve on Donnell's Highlander deal if they put it on Jennifer's credit, and she agreed (he'd bought the Isuzu on his own). Without either asking during the closing or reading the terms herself before signing, however, Jennifer assumed her 5.6 percent interest rate would also apply to the Highlander.
Instead, she discovered later, they were paying 9.59 percent– and would be for six years, not the five they'd thought they'd signed up for. The 9.59 percent rate truly was an improvement, however; turns out Donnell was paying 24.75 percent on the Isuzu. Even so, the big picture isn't pretty: they'll pay $40,399 in all for the Highlander, which would have cost $28,694 in cash at Brown.
The Kelley Blue Book retail price for the Isuzu is $10,950, and Edmunds.com is $11,342, for an average of $11,146. Brown's cash price, $15,000, was 26 percent higher. The Blue Book retail price for the Highlander is $21,695, and Edmunds.com is $22,904, for an average of $22,299. Brown's cash price, $27,734, is 20 percent higher.
I couldn't talk to either Koltz, the saleswoman, or Simmons, her manager, because both have left the company. I did speak at length with sales director Jay Malone, however, who rejected my figures, since the values published by Blue Book and others can vary by locality and season. As a result, he claims that they can bear little relationship to the true market value of a car.
I asked whether Malone would meet with the Hopkinses, and he agreed. Next week I'll report on the outcome, and give some pointers on how to avoid this situation.
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