I’m fascinated by deception. Not only the lengths to which deceivers will go, but the mental gymnastics that are necessary to actually figure out what they’re up to. It has all become very, very clever. And few businesses are as clever and creative as the automobile industry. Illegible fine print flashed across the TV screen for 3 seconds. Top-of-the-line models shown with bottom-of-the-line pricing and a “Model shown is the GLX series, pricing for the GLC series”, disclaimer.

A friend recently bought a new Toyota. He regaled me with tales of his prowes in getting a “great deal” on a lease. “One percent interest” he exclaimed. “And they gave me $2000 for my old beater!”, he continued. I asked him about the actual price of the car. He said it was $28,000. A few days later, I saw the car in the paper from the same dealer. It showed the 1% lease interest and a “cash price’ of $24,000.

In other words, if you lease the car, the price on which all calculations are based is $28K, but if you have cash, they’re ready to sell it to you for $24K, a $4000 difference.  In other words, the real interest rate isn’t 1%, it’s really whatever percentage it would be if you added back the additional $4000 you’re paying to get the 1%….probably something like 5-6%. Hell, if you have a good bank line of credit, you could buy the car for about 3%!

No wonder they gave him money for his beater!