“$20,995, 1.99%, Drive it home today!”
That is the advertisement that got a young woman to visit a local car dealership. She had done the math – by financing her vehicle for 48 months her payments would come in at $414, an amount she could afford.
At the dealer, she negotiated a bit and even received a $500 discount. But her payment for 48 months came in at $507, almost $100 more than she had planned for. What happened?
What wasn’t factored in by the young woman were other costs like taxes, title, registration, and the actual interest rate she received.
The advertised 1.99% rate came with many caveats and the young woman simply did not qualify. But she had invested so much time into researching the vehicle and negotiating for the $500 discount that she didn’t have the energy to battle any further.
Although she drove away paying more than she wanted to, she left much wiser because she learned that her monthly payments were not the only cost that she had to consider.