Why I walked out on my toyota deal...

I walked out on a deal late last night at a Toyota dealership in the Dallas, TX area. Got all the way to financing and started sensing a scam and got bullied. I'd be very interested if any of you have sensed this type of scam is going on with your purchases. You can see the details in the email I sent to the New Car Director just a bit ago.

I had been looking for a '10 Prius II for a C4C deal. We decided to wait because of the low inventory and get one for my wife in 6 months or so. I decided I'd just look for a good deal on a good car for C4C. I've bought new cars for my wife and mother before but I always preferred the value of used cars for myself. I looked at several models from several manufacturers and finally settled on a great deal for a 2009 Matrix.

Here's the email I sent:

Hi [New Car Director],

I just wanted to let you know that I do appreciate the work you and [Salesman] did yesterday trying to get the deal for the Matrix done. Unfortunately I could not go through with the deal after what happened with your finance team.


I'm sure you'll hear their side - or you may have heard our conversation - but you should know what I didn't appreciate about what happened and why I ultimately walked:


I asked several times for the numbers on the scrap value of my 4runner, going back to my conversations with [Salesman].


When I was handed off to finance guy #1, I told him that the scrap value I was supposed to receive had still not been disclosed. He told me that the $4,500 was what I received for the scrap value and asked why I would expect more for the clunker program. Obviously that's not true - we all know the $4,500 is the gov't rebate, not scrap value. So I kept asking.


After he played dumb about the scrap value for a few more minutes he called in finance guy #2 and asked if he knew something about scrap value (as if it was some unheard of concept). #2 initially played dumb (or at least "slow-played" his hand) about the clunkers stipulation that the consumer has the right to know and receive the scrap value (minus the $50 admin fee for the dealership) and then became very knowledgeable about it.


After all this, I was finally told by #2 that each car gets $100 in scrap value. Of course, that wasn't true either.


I was then told by #2 that your dealership had an agreement with a scrap yard for $100 a car. However, as #1 did, he was also sure to keep pointing me back to the clunker rebate amount and imply that I was being petty about a small amount.


So, it went from "scrap value? there isn't such a thing" to "oh yeah, we have an agreement with a scrap yard for $100 a car." I was also noticing a recurring theme of "hey, scrap value is such an insignificant thing, let's look at that $4,500."


As we continued talking, I couldn't figure out why in the world they were playing that game, even if it is such a relatively small amount. It didn't take long to realize why. If a dealership has as many clunker deals as I was told your team has closed (300, according to #2) it could be ease to see a pile of dollar signs for a dealership if they keep all or a portion for themselves (above the $50 for dealer admin fee). Perhaps #2 was right and you guys have a deal with a scrap vendor for a flat $100 per vehicle. The skeptic in me couldn't help but wonder why a dealership would enter an agreement scenario with a vendor where they're leaving money on the table. For instance, if scrap value varied from $100 to, say, $250 per car, that is a substantial bundle of profit when we're talking about 300 deals.


Maybe some consumers didn't understand enough about the program to ask. And maybe some customers used their scrap value to get a few bits of shwag, like maybe oil changes and or t-shirts. If your dealership can get it above-board, good for you - it's good business to get the customer to channel dollars to other goods or services rather than put it back in their pocket. But I had to fight for your finance guys to give me something that is absolutely required to be disclosed through the federal program.


Bottom line:
Despite what #1 and #2 might think, I didn't walk away because of $50. They were obviously trying to cover up the fact that there is any scap value available to the customer at all, how could I trust the suddenly "disclosed" $100 per clunker agreement that supposedly exists with a scrap vendor or anything else that was going to come up in closing the deal. I walked away from the deal because I don't appreciate being blatantly misled by your finance guys. And I really didn't appreciate the way I was being bullied. At all.


It would be very interesting to find out how much your dealership ends up getting for scrap value and what the 300 customers were told. Like I mentioned above, $50, $100, or even $200 is relatively insignificant on an individual level, especially when the total amount crossing the table is in the tens of thousands, but when that small amount is multiplied by 300 and cached by one party, it becomes very significant. If we're talking about a mark-up on invoice or a reasonable service fee, that's one thing; this is entirely different.


As I told [Salesman], I was originally in the market for a Prius. Because of the low inventory caused by the clunkers program, my wife and I decided to get something else for me and buy a 2010 Prius for my wife in the next 6 months or so when the inventory gets built back up. There's nothing better than feeling like you've been served well; and you know as well as I do from a sales/customer service perspective that it's a great feeling when you feel like the customer feels like they've been cared for. While I may not completely write off buying a Prius now, the odds are low.


I'll probably get something else on Monday, most likely the identical twin to the Matrix, the Vibe (despite #2 assuring me that no dealerships would be processing any - he gave me a nice, sarcastic, "good luck finding something" on my way out - and #1 seriously tried to convince me that the program officially ended that night). Or I may end up deciding not to get anything right now, who knows. I do know that I'm ticked off about what happened last night.


I apologize for the length here, and I appreciate you reading all the way through. Like I said, I thought you should know why I walked. I'm not sure, at this point, to what lengths and through which channels I'll voice my frustration beyond sending you this email, but I'm definitely angry enough to keep looking into it. Please let me know if you have any questions about any part of what I wrote above. Thanks for your time.