Hi guys,
I was helping my aunt purchase a Toyota CHR and her credit score was a 650 and she needed financing. They came back with “6.99% APR from Toyota Financing” but if we purchased a $1,600 extended service agreement or warranty (not certain what it was) that it would qualify her to get a much lower rate with 3rd party bank, close to 3% APR, etc etc. Was this BS to sell us the $1600 package?
Thanks
Most likely yes. They are just playing games to try and sell the $1,600 extended warranty.
As with any type of financing incentive you have to run the numbers on all scenarios to see what works out the best.
That’s exactly what it is, BS and is actually illegal in some states. I 100% guarantee you they can get that rate without the service contract. My uneducated guess depending on the length of the contract, they’re probably marking up the service contract by $1K if not more to pad the deal.
I would check with local lending institutions and see what your aunt qualifies for on the loan. You may not get 3%, but could probably get 4% or possibly less. Tell them you’ll get the financing on your own and to shove the contract up their backside sideways. This way they’ve lost all backend money including what they were getting on the financing.
Yes of course it’s BS. It’s gross profit. This is why you already have financing and a deal before you set foot in a dealership 
If the F&I guy can beat it, great, but you’re not at his mercy.
Did your aunt actually sign this crap??? If so can it be cancelled?
Previous to this deal, we purchased a RAV4 from them at a good deal, no financing required. This time around my aunt required financing and she didn’t do enough leg work on getting decent rates, the credit unions and banks would tell her that she couldn’t be approved or told her 7%. Ideally I know she would’ve brought her own financing but now I know for next time. We ended up signing this but I’m asking because she’s thinking of getting another car from them (and they really are the best price in South Florida area). This was a month or so ago, I would think this service stuff couldn’t be cancelled? Maybe it can be.
You can absolutely cancel the service contract and will get the “unused” portion back. Unless there’s a minimum earned portion on the contract, you should get all of the money back. A new car is under full warranty, so the contract hasn’t been “used” at all yet.
Shady, shady. I’d go to another dealer and get the 3%, I bet that’s from Toyota. Oh and a couple percent on a car note doesn’t change the payment that much.
Or are they?
With the financing trick, maybe not as much, but I’m in Miami and everyone here is either a shark or asking much more. I’ve contacted over 20 dealerships, I’m sure they are. They’re in Tampa 4 hours away.
Who would I need to talk to for a refund? The same financing guy who sold it to us?
You should be able to cancel the agreement with the provider. Is the agreement through Toyota or another carrier? Either way, reach out to them directly and cancel.
It’s another provider, I’ve read the paperwork and they have a phone number. Thanks!