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June 2nd, 2006

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Question: Dealership increased price by $2000 by selling me "free" insurance?? Can I sue?

recently bought a used Corolla at a Toyota dealership, I have yet to pick it up. Over the phone we were told a bunch of BS which turned out to be false once we saw the car (it had more mileage, was NOT certified etc..). So, through negotiations, we were able to get 14K "out the door" and an additional bumber to bumper warranty for 36K miles at NO COST.

Through financing, our rate was 9% and so we were told that resulted in a monthly payment of $280/mo for 14K "out the door".

They fudged with the numbers and charged us 7.84% for 16K total claiming that they had to fudge with the contract to "get us" our exteneded warranty because it was worth $2000. He even showed us that the total interest was still the same at $4152.
Once I got home, I plugged it all into a loan calculator and found out that 14K out the door @9% was really $250/mo and, yes he was correct that $4152 interest would be paid, but he forgot to mention that increasing our total to 16K upped our principal by $2000

Answer: Don't trust used car salesmen. You should be able to cancel if you haven't picked it up yet. It depends on the state as to your specific rights. Check with the state Attorney General Office.

If you are paying that much per month why don't you get a new Corolla? I am pretty sure that the lower rate on new cars will balance it out and you will end up paying about the same.

Legally speaking you have no contract if there is a misrepresentation as you seem to indicate here. Also, there has to be a meeting of the minds with regard to the terms of the contract which is not the case here. If they try to enforce the contract, which they won't, you will be able to avoid the contract under most common interpretations of contract law.

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