This weekend I had several projects to complete. The first one had origins 6 years ago, when my yet to be wife purchased an extended warranty on her car. At the time the finance guy at the dealership said that the premium would be fully refundable at the end of the period if we did not use it. When I heard this I thought it almost sounded too good to be true, but he practically pinky swore to it. Well fast forward 6 years later… This whole time I have had it listed on the spread sheet where I track my finances, so I wouldn’t forget about it, I decided to look up the information, which I had filed. Well, long story short, and many phone calls later we found out that we can only get the refund if we process the transaction within 60 days of the expiration. Well it expired 12/27/09 so we are right in that window. I shared with the Toyota guy how angry I would have been if I found out I couldn’t get this after the previous guy made it sound so simple. The point is, being on top of that and making the effort is going to get me a check for over $1000.
Also, this weekend for the same car, I took it in to get serviced and for them to check out an increasingly loud noise coming from the rear of the car. It turned out to be a wheel bearing going out. The dealer quoted me $535. I thought, “I’ve heard dealers are expensive I should look around.” After going to one random shop (who quoted me $425) and then finding out my family’s recommended place went out of business, I finally found a really friendly professional place (B&D Auto Repair in Glendora) who ended up giving me a price of $276.
Now, you may be thinking, “What the heck is the point to all of this?” Well, I have three (I know you probably think, “How are you going to get one?”) First, both of these situations where lessons in consumer economic psychology. Do you know what my first reaction to each of these situations was? Whatever took the least effort on my part. For the warranty, I just wanted to put it off, thinking that it doesn’t matter I could do it later. With the repair I thought, “I don’t want to hassle with finding another place to get the repair done.” Just from a personal finance perspective we all need to be aware of this and its potentially huge consequences at times (this weekend over $1300!).
The second point is about how the market works. The repair was a classic case of a consumer using some of their time and energy to reward a higher quality service at a lower price. This feeds directly into the healthcare debate, I don’t have any incentive whatsoever to look for better and cheaper service at the doctors when insurance is paying for almost everything.
The third point is don’t get repairs done at a car dealership, they are ripping you off!
Ohhh! I have a fourth point, think about how much Americans waste every year with potentially lazy mistakes like the ones I could have made (and I’m sure I have made). People need to take more responsibility for their financial situations, and put in the time and effort it takes to be an educated, well-informed consumer and investor.
