Toyota Credit Gets a Black Eye

[Boomer]

The US Consumer Financial Protection Bureau (CFPB) has ordered Toyota Motor Credit Corporation to pay a $60 million settlement for ripping off customers with shady loan schemes that increased their monthly loan payments by preventing them from canceling product bundles. As one of the best-selling automakers in the US, the antics unfortunately affected many customers.



Toyota Motor Credit Corporation is the US-based financing arm of the Japanese automaker, providing financing for consumers. The company also offers optional products and services, usually sold in bundled packages.

The bundled products include Guaranteed Asset Protection (GAP) and Credit Life and Accidental Health (CLAH) coverage. The former covers the difference between the amount a consumer owes on an auto loan and insurance payout if the vehicle is stolen or damaged. The latter covers the remaining balance if a customer dies or becomes disabled.

Consumers who unwittingly paid for these packages found it almost impossible to cancel or had refunds withheld or incorrectly calculated.

 

[Rust_Belt_Pete]

You dont need to have GAP if your auto insurance covers these vents right?

 

[demarpaint]

No surprise, packing deals. It has been going on for years.

 

[wag123]

They all do it.

 

[andrew_j]

Preying on desperate people who can only buy vehicles with credit. Did it once and got 3% tacked onto real interest rate age 22z Thankful I worked hard to pay off and alway cash after.

 

[BMWTurboDzl]

I could see this being a problem if someone adds GAP coverage to their policy and consequently want to cancel the existing policy.

The fine is really small in the grand scheme of things.

 

[John105]

Preying on desperate people who can only buy vehicles with credit. Did it once and got 3% tacked onto real interest rate age 22z Thankful I worked hard to pay off and alway cash after.

Isn’t it similar to having property taxes and insurance held in escrow, with mortgages, and earning no interest (imagine right now with rates being high). My uncle told me never do that, pay those yourself. I would not have known otherwise. Lenders are not “friends” as they portend to be

 

[CKN]

There are going to be situations where GAP insurance makes total sense. One should go home and call their auto insurance company to see their offerings are.

 

[andrew_j]

The only way to finance a car is do your own however lie and say you want theirs to get the pricing and flip at last minute.

You’ll find out what car actually costs when you flip to your credit union. They get pissed, and learned that from brother in law in desler sales industry.

 

[tbm5690]

The only way to finance a car is do your own however lie and say you want theirs to get the pricing and flip at last minute.

You’ll find out what car actually costs when you flip to your credit union. They get pissed, and learned that from brother in law in desler sales industry.

I would think you would need a written offer to do this, else they could change the price when you change financing plans. I've never discussed how I'm buying until we agree on a price...then I'll tell them I'm cutting a check.

 

[andrew_j]

I would think you would need a written offer to do this, else they could change the price when you change financing plans. I've never discussed how I'm buying until we agree on a price...then I'll tell them I'm cutting a check.

Yes negotiate before. You do financing thru them and “change your mind”. Makes them so angry as typically interest rate is higher/banking kickbacks to them and they can lower selling price on paper. You get a jist of what a selling price could be.

 

[Rand]

Had that happen to me. 6 hours of waiting and 23papers later the interest rate was jacked 2% I have 830 credit rating.
Basically got worn out and signed.. then 13 days later refinanced. Since it was before first payment they gave me the new car rate..
3.2% cheaper.

Dealer called me up a couple months later squealing and trying to get me to pay back a 500$ incentive.
Since I didnt keep their loan at least 6 months.
I told them this happened because you got too greedy with the interest rate over what was quoted to me.
Can't be the first or last time that's happened to them.

Since I still had their signed offer sheet I felt they wouldnt bother with small claims.. and I was right for once.

They were happy to sell me another car a few years later.. I told them I live 5min away call me when you are ready.
They wanted me to wait.. but I had enough of that with the last car... worked out pretty good.
Asked finance guy for the interest rate papers first off and they had to redo them.. since I told him I wasnt signing anything
and would go find my own financing. Amazing how they immediately dropped 2.5%.. back into the reasonable category.

They were scumbags and ran my credit with 5 places.

Now unless I am test driving I do all the negotiation online. or phone.