After about a month of looking, I found a car at Longmont Ford that was only about $5,000 and I was told over the phone that I’d been pre-approved for a loan that would make my payments $129 a month for 60 months. After test driving and wanting to buy the car, I was brought into the office of “Chas” – the person who would handle my financing paperwork. He said my actual payment might go over that “a bit.” I told him that I was told $129 at 60 months and that I can only afford that – and that he saw what I was making (very little - $950 per month gross at my two jobs plus I do odd jobs for people). He told me it’s actually 66 months and it was over the $129 per month.
He quickly pulled out a list of many different service warranty packages I could buy. He told me not to look at the “numbers” yet --- they were as high as $188 per month. I became concerned because I was feeling sucked in and deceived. I said “No – I don’t want it – Just the $129 I was promised.” Chas said “Are you surrrre? I just want to make sure you are protected. It would only cost you $138 per month - only an additional $9 a month- to get the basic protection here.” Chad showed me a list of all the things that this basic warranty covered. The car didn’t have any other warranty.
I asked him – “So, if I broke down in say, Salida, would I just be able to bring it in and get it fixed?... As long it was one of these on this list of things.” “Yes!” said Chas “It’s only $9 more per month and you are covered for 36 months or 36,000 miles.” I felt, at that point to add a cost of roughly $600 over the life of the loan (66 months) to be protected in this way, would be worth it. I agreed. Then Chas began to make conversation with me – now I realize it was the way a doctor makes chit chat to distract you from the pinch of a needle. He just kept slamming down page after page of documents for me to sign or initial. He said, “Ok – just initial here, here, here, here, here and sign here…And where are you from again?” Then he tightly folded up all the documents, three ways and stuffed them in a letter envelope.
Well, Mr. Polis, I think you know what happens next. When I got home with my $5,000 car, I saw that over the life of the loan I would end up paying a little over $9,000… nearly double the loan. Not because of the dealer fee ($399) - I anticipated that – there were signs up all over the dealership announcing that one. Not because of the taxes – got that – and the loan was made at 7.5% --- so I anticipated that interest but then I saw it - $1,799 for a service protection plan. Wait – what – what about my $9 more a month? Even at 66 months that is only about $600 – this is $1,700 – not $600. And not only that – there is a $100 deductible every time you bring your car in – not just “bring it on in” if it’s on this list of things. Bam.