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Volkswagen targets stupid people, tries to rip them off

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Well, VW certainly knows its target market: stupid people and poor people. I can only conclude that after my friend showed me a mailing he received a couple weeks ago, which helpfully asks, “Why Not Skip a Payment This Holiday Season?”

“The holidays…time to give thanks, spread joy and shop for the best sales. Now, here’s the perfect “gift” to help you stretch your holiday dollar. Volkswagen Credit is offering you the opportunity to ‘skip’ your December 2006 payment on your current account listed above.


Upon receipt of your extension agreement, we will assess your account a $25.00 extension fee, payable on your next due invoice. There is no need to send money at this time.


Happy Holidays!”

In other words, skip this “holiday” payment because you don’t have enough money to pay it and buy your Christmas gifts. That’s fine! Just go buy those gifts that you explicitly can’t afford. Also, we’llchargeyou$25laterbutdon’tworryaboutthatrightnowit’sChristmasafterallhappyholidays!!!

Two things:

First, click the images to read the full text. It’s unreal. “Why Not Skip a Payment This Holiday Season?” How about Why Not Stop Being Predatory Jackasses and Stop Mailing This Kind of Thing to People, of Whom I’m Willing to Bet Predominantly Lower-Income People Will Reply? See, I can use caps too. Some marketer is feeling very proud of himself, but I’m just full of pity and derision. Also, guys, take some responsibility for yourself. If you get offers like these, throw them away. (Unfortunately, the people who actually did this “deal” are probably not reading personal-finance blogs.) Better yet, send them to me so I can make an example of them.

The front (click for a larger version):

The back:

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  1. “Why Not Skip a Payment This Holiday Season?” How about Why Not Stop Being Predatory Jackasses and Stop Mailing This Kind of Thing to People, of Whom I’m Willing to Bet Predominantly Lower-Income People Will Reply?

    So, your contention is that poor people are stupid?

  2. That’s amazing. I doubt folks will even stop to consider the effect a month’s worth of unpaid interest could have on the balance as well.

    PS: You might want to bleep out that account number on the coupon portion of the form.

  3. Huh: Oh yes, I’m sure that’s exactly the point being made. A gold star for logic to you!

    Anyway, this situation reminds me of my MBNA card (now BofA). MBNA has been listing my “minimum payment” as $15.00 for probably over a year now. Sometimes if I hunted really hard I could find what the normal minimum payment should have been (somewhere around $400). Right now on the new BofA site there’s a link above the $15.00 figure saying “Learn more about reduced payment.” but when you click on the link, you’re taken to a broken help page where I was completely unable to find any info related to “reduced payment.”

    They list $15.00 as if that’s your actual payment and make it difficult for you to find the amount you actually owe, if you can find it at all. Then you can’t get any help to find out how you could pay only $15.00 and get away with it. So, you think offering to skip one payment is bad? Try MBNA, where you can skip them all!

  4. I’ve seen this type of thing before with both credit cards and car payments but they usually don’t charge a fee. VW has taken it a step further by trying can screw you over twice by continuing to accrue interest for the month of the “skipped” payment and by charging you for it! I also find it disturbing that they use the word “skip” when they should really say something like postpone or delay.

  5. At least they mention the $25 fee in the letter, I’d expect intrest to accrue, but not an additional fee. Hopefully most of the people that receive this will be turned off by the obvious fee.

  6. Then again anyone reading a personal finance blog probably doesn’t finance a new car.

  7. Chase Auto Finance sent me a similar letter when I had my auto loan with them. I have heard about other lenders also following suit. Unfortunately, I think this is fairly standard practice.

  8. I’ve been trying to do some analysis where the person had a really high car payment, a low rate on their auto loan, and a really high rate on a considerable credit cards debt. Even in that scenario, the $25 is way more than the interest differential between a penalty rate card and a great car rate.

    For instance, even if the person has a 30% CC rate, and a 6% car rate (making the interest spread 24%), their montly car payment would have to be greater than $1250 to break even.

    Does VW sell that expensive of a car?


  9. I think the $25 “fee” really twists the knife in the back. Like it’s a privilege that they’re offering this, and if they didn’t charge you then they’d be losing money when really they’re gonna get increased interest payments from the extended period anyway. With that they’ve already hit their goal of making some more money off their auto loans while disguising it as being nice to customers who are in a financial crunch at this time of year. Bravo.

  10. Check out condition #2. Your contract is going to be extended for a month, but if I’ve done my calculations correctly, at the end of the contract, you’ll be paying interest on the skipped payment from the skipped month to the end of the contract. At the start of a 5 year contract that could be a fair amount of dough you’ll have to pay at the end of the contract.