Nov 7, 2007

Good customer service or just a sneaky ploy?

We have a car loan on our 2003 Nissan Altima (its 1.9% interest rate has had us paying the minimum so that we can pay off my student loans, which have a higher interest rate). In yesterday's mail, we received a "Payment Extension Offer" from Nissan, which stated that they know we might be experiencing a financial hardship due to the "recent disaster" (presumably the wildfires) in our area and giving us the option of deferring the next payment due "to the month following your last scheduled payment."

My first thought was, "Oh, that's nice for the people who need that." My second thought was, "My goodness, look at the extra interest they're going to charge people who take advantage of this offer!" Because the form stated in smaller (but not hidden) print that "interest will accrue on the extended payment."

And in composing this post, I realized that not only were the fires nowhere near us (in terms of real danger), Nissan ought to know that by looking at our zip code. Giving them the benefit of the doubt, I suppose that someone who lives in our area could have been financially impacted by the wildfires either through damage to investment property or by losing a job when their workplace was destroyed. But the combination of the interest that would accrue and the broadness of the offer makes me suspect that Nissan's motives are more profit-driven than altruistic.

Anyone disagree?


Anonymous said...

The better offers are the ones from credit cards offering to defer your payment for December or January due to Christmas and how much money you are obviously spending during that time. Interest will still accrue, of course, and at a much higher rate than your car loan! Since haven't carried a cc balance in 5 or 6 years, I don't get these anymore, but I remember them. The sad thing is that they probably work or they wouldn't continue to send them!

thisisbeth said...

Of course they know the benefit for their bottom line by extending these offers. The "Christmas is a hard time" offers are entirely self-serving--they're taking advantage of people being unable to control themselves.

The disaster offers have a *tiny* bit of charitable in them--people couldn't plan for this fire and there may be unexpected expenses. (Sure, everyone should have emergency money to take care of disasters, but they may have had many more expenses than they originally planned.)

In general, more people take advantage of these offers than should, mostly through misunderstanding of the interest accrual.