I’m a free market kind of guy. I like the idea of allowing demand to set prices. To a certain extent I feel that if a customer gets screwed its their fault for not being better educated on their decision making processes. But every once in a while someone slips through the market norms, too stupid for their own good, and someone else takes advantage of the situation.

Case in point: Mazda of Orangeville, in Ontario (that’s in CANADA for the geographically challenged). A short while back Madeline Leonard rolled into the dealership to have her 2004 Mazda3 serviced. The slick salesmen there managed the convince her to dump that ancient piece of crap for a new 2010 Mazda6. If you aren’t familiar with Mazda car models, this is an upgrade from a small to a midsize car. If that were the end of it I’d say more power to them for managing to upsell. Afterall, the more people out there that overpay on their cars, the more people can slip through with a good deal like myself. But that doesn’t tell the whole story.

Leonard is not the sharpest tool in the shed, seriously. She takes meds for a number of problems, including depression and anxiety. She collects disability and lives on a fixed income. It wouldn’t surprise me to learn that the payments on a 2004 Mazda3 were a stretch. Mazda of Orangeville capitalized on someone that is easily confused and manipulated. They sold her the new car for a price of almost $66k Canadian (which is about the same in US dollars at current exchange rates). But it wasn’t entirely new. They sold her the model they used for demos, which should be discounted and not considered “new”. But they still sold it for the new price. By the way, this $66k was AFTER the value of her trade-in was included.

As it turns out, they jacked up the cost further with overpriced accessories and warranties. Ontario’s regulating body determined the car should have been sold for about $41k. Oh, and did I mention the car was financed over 8 years? 8 years? Who finances a car for 8 years? The longest loan I’d previously seen is 72 months (6 years for the math impaired). And even that is ridiculous for a friggin car.  So they got her on price and financing.  They actually got her on price in 3 ways: new price on a used car, inflated options, and inflated new car price.  She also got into way much more car than she could afford, and the sales/finance people would have known that.  They screwed this lady coming in a going out.

It’s no surprise to learn the dealership has a D+ consumer rating from the local Better Business Bureau. And naturally, they are not members.

This sort of thing almost warrants a Weaky for Madeline. If she’s capable enough to own her own car and live alone, then she’s smart enough to not get talked into a deal such as this and thus deserves whatever price she ends up paying. However there are companies that prey on the stupidity of customers and on an ethical level I simply cannot favor that. Mazda of Orangeville has every right to earn a profit, but they have to do so by selling their products at market prices. You can’t inflate prices for one-off customers that are dumb enough to trust you.

Now Leonard may sue or something for damages and whatnot, but she doesn’t deserve that.  She deserves a public shaming (which she’s getting) and to get the whole transaction undone.  Mazda of Orangeville can burn in hell.  If you can’t make a profit without exploitation, you can’t make a profit.

Via Autoblog (Includes video)

By The Weakonomist

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categories: business, loans, personal finance