Getting a lower car price, after the purchase

I have been pretty happy with my new car, but I am even more happy now that I got $600 back after paying for it!

When filing away my papers, I remembered that the invoice had a charge of $595 for an “appearance package,” which I was told included wheel locks, mud flaps, floor mats, and a custom paint job.  The next time I went to my car, I noticed no mud flaps, no floor mats, and no custom paint job. In the flurry of paperwork and driving away my new car, I had not noticed they did not deliver the “appearance package” (except for the wheel locks, which were included).

I called the dealership, and my calls were not answered and not returned. Eventually I talked to a manager who said they would not refund my money because (literally, he really said this):

“We already gave you such a good deal. Other people pay twice what you paid.”

I said, “Don’t give me that crap.”
[Note: I really said the word "crap" and not another word that could have gone in its place and could be considered offensive.]

He said, “You are using offensive language and need to watch what you say.”

I said, “I am sorry if I offended you by saying the word ‘crap,’ but you are not being honest with me.”

At that point, we got off the phone, and I immediately called my credit card company and requested to dispute a transaction. I was transferred to a very friendly and helpful lady who said that I had a strong case of “misrepresentation.”

Within three days of me submitting the credit card dispute forms (by fax), the disputed amount was credited to my account.

The situation is not settled. If the car dealership can “prove” that the product/service was provided, then I am responsible for the disputed amount. If that happens, I will have to decide how to proceed. I do not see, though, how they can fight this dispute without lying.

Review: Pay It Down by Jean Chatzky

Jean Chatzky’s book Pay It Down is a great personal finance book. It is full of ways to reduce monthly expenses in order to pay down debt. Even if you are not trying to pay down debt, the ideas can be used to free up more cash.

My favorite part of the book is a script to use with a credit card company to negotiate a lower interest rate (starting on page 67). Chatzky quotes a 2002 study that calling and asking for a rate reduction results in a reduction 56% of the time. I like it that Chatzky gives a script because the people on the other end of a line have a script.

Though it can be intimidating to call and ask for a rate reduction or for fees to be waived, nothing bad can happen. The worst possible scenario is that nothing about the account changes.

A few years ago I paid a credit card bill a few days late. I was busy and forgot to pay the bill, but I had the money and was able to pay the balance in full as soon as I remembered. When I remembered, this is what I did:

• I paid the entire balance online.
• I set up an automated payment plan. On the day the payment is due, the entire balance is withdrawn from my checking account. In general, I am cautious to set up automatic withdrawals from my bank account (as are a lot of people). But since I already had a problem remembering to pay the bill and late fees can be steep, I pay this one automatically.
• I called my credit card and asked that the fees be  waived. The account had been open for several years, and I never made a late payment or carried a balance. The first customer service agent I spoke to said that there was nothing she could do. I asked to talk to her supervisor; she said that her supervisor would not be able to do anything for me. When I talked to the supervisor, though, she immediately waived the fees.

Looking for a credit card

After giving her a copy of On My Own Two Feet, my cousin asked about getting her first credit card.

When deciding whether or not to get a credit card, one of the biggest things to consider is if you can pay it off each month. Using a credit card responsibly builds a good credit history, which will make it easier to buy a home or car later. If you are using a card to establish a credit history, one way to do this is to only buy groceries with the credit card.

If you decide to get a credit card, the next decision is which credit card to get. Advice on this comes in two varieties – go for the lowest interest rate or the best rewards. People carrying a balance want the lowest interest rate; people with no balance want the best rewards. Assuming you can pay the entire balance each month, go for a card that has no annual fees. For some “big spenders,” paying an annual fee for better rewards makes sense, but it takes charging many thousands of dollars to make this a good deal. I recommended that my cousin consider a USAA credit card (she is eligible to be a member because her parents are members). USAA tends to have good financial products with reasonable terms and strong customer service. For a first credit card, that may be more important than the rewards. The USAA credit card is ranked #1 by Consumer Reports.

My credit card

I charge practically everything to my credit card and pay the entire bill each month. I have an Amazon.com rewards card. Whenever I accumulate 2500 points, I receive a $25 gift certificate to Amazon in the mail. For most purchases, $1 = 1 point; for purchases at Amazon, $1 = 3 points.

If I wanted to get the maximum rewards from my credit card, I would only use this card for purchases at Amazon and would use a cash back card elsewhere. Consumer Reports lists “eight rewarding rewards cards,” and I could probably get a better deal by using one of those. For now I am not going to switch because I value simplicity in my finances. My current card costs me nothing and gives me bonus rewards that I like — who doesn’t enjoy getting Amazon gift certificates in the mail?

Resources for comparing credit cards

www.bankrate.com

www.consumerreports.com

The subprime mess

Financial markets have been reeling for months after large losses in subprime mortgages. My take on the subprime mess is that too much credit went to too many people too easily.

• Individuals qualified for more credit by taking out an ARM (adjustable rate mortgage) than they could have borrowed with the more traditional 30-year FRM (fixed rate mortgage).
• Lending was extended more readily to “subprime” borrowers. A subprime borrower has a lower credit score, which indicates he may not have used credit carefully in the past (many late payment, etc.).
• Some lending institutions required little or no documentation. Joe Shmoe could walk in off the street and claim an income of $100,000, qualifying him for a larger mortgage than his $60,000 income could actually afford.

Now some of these people cannot pay their monthly mortgage — a larger number than was anticipated by the housing and mortgage experts. ARM interest rates can reset to higher values, and, ahead of time, no one knows quite how high (or low) the rates will reset.

Because a lot of these people’s homes are being foreclosed, more houses are on the market. Also, because banks have made it harder to qualify for a mortgage without a substantial down payment and strong credit history, there are fewer buyers. With more supply than demand, housing prices are heading lower.

With so many bad loans, lenders are being pickier about who gets money, affecting large corporations, small businesses, individuals and families, and students.

“Deserve”

In the mail recently, I received a letter telling me that I “deserve the opportunities that come with a larger credit line” and that my credit line has been automatically increased by 20%.

What the credit card issuer might have in mind is a vacation to celebrate finishing grad school, a shopping spree for a wardrobe for my new job, or buying all new furniture for my new apartment. What I have in mind for what I deserve is safety, love, and nourishment.

I cringe when I hear people say they “deserve a new TV” or even a new car. An ex-boyfriend tried to convince me to get a new car because I worked hard and “deserved” better than my old leaky Saturn (rain water dripped directly on the front passenger seat). But the car was otherwise in great shape, and if my parents had not insisted I drive (and given me) a new car, I would still be driving the leaky Saturn.

What this really comes down to is how we understand and explain our purchases. A common way to sort all purchases uses two categories: “needs” and “wants.” Anything that you say you “deserve” probably falls in the “wants” category.

I propose four questions to help decide whether or not to buy a “want.”

• Did I already know that I wanted to buy this? or is an effective, sneaky marketing strategy at work?
• Will I use it regularly?
• Is it fabulous? is it well made, does it fit my lifestyle, am I sure it will not go out of style next week?
• Can I afford it? is there enough discretionary spending money in my bank account today?

If the answer is “no” to any of these questions, do not make the purchase today. Think about it, and maybe the purchase will make sense next week or next month.

When you get back from your next shopping trip without buying anything you “deserve,” take a seat and kick your feet up — you deserve it.