Unless you have been asleep for the past month or two, you probably have seen the bright red Toyota commercial touting their commitment to safety:

It says:

“At Toyota, we care about your safety. That’s why we’re investing a million dollars every hour to improve our technology and your safety. It’s an investment that has helped Toyota win multiple top safety pick awards for 2010 by the Insurance Institute for Highway Safety. No other brand has won more. These top safety picks and all our new safety innovations are available at Toyota.com/safety . “

The average TV watcher will likely take away the message that Toyota cares about safety, has won a lot of safety awards, and is spending a million dollars an hour to improve safety.

Mouse Print* asked the company how they arrived at the million dollars an hour figure.

*MOUSE PRINT:

“The $1 million figure represents Toyota’s total global spending on R&D to enhance the safety and technology of its vehicles. [Toyota] projects $760 billion yen [to be spent in FY2011] on R&D. Breaking down the calculations, 90 yen to the dollar equals $8.44 billion, which works out to $2,318,310 per day or $965,962 an hour, rounded to $1 million an hour. In any event, any fluctuations in the yen would impact the exact final figure.”

The key issue is not so much that they rounded up the figure to a million dollars an hour (exaggerating the amount spent by almost $30 million a year) but rather that the number is TOTAL spending on research and development, not just on safety issues. The company could not provide a number for the actual amount just spent on safety, but it certainly is less than the total spent on R&D, and therefore is not $1 million dollars an hour.

When this discrepancy and interpretation of the commercial was pointed out to Toyota, they responded:

“As the commercials mention, the $1 million figure represents Toyota’s R&D spending on new technology and safety, much of it allocated to quality and safety features.”

If you parse the key sentence in the commercial, it does indeed say that they are spending $1 million an hour to “improve our technology AND your safety.” But by using the term “safety” seven times in 30 seconds, and displaying the words “safety” or “safe” on the screen for much of the commercial, listeners are likely to get the net impression that Toyota is spending a million dollars an hour to “improve our technology FOR your safety.” We don’t think the average consumer would take away from the commercial that the company is spending some number less than a million dollars an hour on safety.

In Massachusetts, we have an advertising regulation that provides:

“An advertisement as a whole may be unfair or deceptive although each representation separately construed is literally true.”

The folks who bring you SuperPages (yellow pages) are now trying to help you buy a used car via their new site EveryCarListed.com . As an inducement, they promise you a free vehicle warranty with every qualified purchase:

The actual guarantee in most cases is for 90 days or 3000 miles, whichever comes first. It also only comes on cars under $60,000 and nine years old or less. But, you will likely have a costly surprise when you try to make your first claim:

*MOUSE PRINT:

“The Warranty is subject to a $100 deductible per service visit and a maximum liability for the life of the Service Contract of the trade in value of the vehicle you purchase or $3,000, whichever is less.” [See terms and conditions.]

Also, the warranty is not bumper to bumper, but only covers certain parts:

*MOUSE PRINT:

Engine, turbocharger, transmission, transfer case, and drive axle

There is a long list of exclusions (if you are lucky enough to find the actual contract), including one you might not expect on a used vehicle:

*MOUSE PRINT:

Particularly for a just-purchased used car, you don’t always know what’s wrong with it until after you drive it awhile. And a part rarely goes from being perfectly fine one day to being dead the next. So might those less obvious defects be excluded? One would hope that the company behind the service contract wouldn’t use that provision or others to weasel out of paying for particular repairs.

So what company backs up this guarantee? Warrantech. Never heard of them? You should have. The Better Business Bureau in Texas where the company is headquartered certain has, and has given the company its lowest rating.

*MOUSE PRINT:

“The majority of Warrantech automobile warranty complaints center on deceptive and ambiguous language in the contract and refusal to pay valid claims. ” See full BBB report.

Sometimes, you get what you pay for. But you really have nothing to lose other than your “peace of mind” in being protected should you have a claim.

Starting September 14, General Motors is offering a 60-day satisfaction guarantee on any new 2009 or 2010 Chevy, Buick, GMC or Cadillac purchased between now and November 30th. The president of GM in a TV commercial says, “and if you’re not 100% happy, return it, we’ll take it back.”

You must keep the car for at least 30 days, and then you have another 30 days to return it. Don’t expect to get 100% of your money back, but pretty close.

*MOUSE PRINT: Among the many requirements are these:

• Buyback Price means the actual price you paid to the Participating Dealer for the Eligible Vehicle itself (after any rebates, discounts, employee discounts, or supplier discounts) plus applicable sales taxes you actually paid.
• The Buyback Price does not include the costs of any taxes (other than sales taxes), licensing, titling or registration fees, insurance, dealer installed accessories, aftermarket products or add-on equipment (other than factory options ordered with the vehicle), dealer fees of any kind, ancillary products including without limitation extended warranties or service contracts, finance charges, any negative equity (the amount by which a loan on a trade-in vehicle exceeds the dealer’s purchase price for the trade-in) or any other expenses incurred by the Buyer in relation to taking delivery of the Eligible Vehicle.
• Your Eligible Vehicle’s odometer must not have more than 4,000 miles since the Delivery Date.
• Your Eligible Vehicle must have been registered and insured in the Buyer’s name since the Delivery Date.
• Your Eligible Vehicle must have no more than $200 of damage as determined by GM or GM’s agent. Such damage may include, without limitation, internal or external scratches, scrapes, dents, odors, rips, burns, etc.
• Your vehicle must NOT be registered to a business, corporation, partnership, utility, federal, state or local government, rental car company or any other organization;
• You cannot return an Eligible Vehicle and repurchase a vehicle you traded-in when you purchased the Eligible Vehicle;
• You cannot trade in an Eligible Vehicle and then repurchase it later.
• You cannot sue GM over this program — arbitration only.

All in all, GM’s offer is advertised in a straightforward manner, and the “details” are consistent with the promises made and are not unreasonable (but for getting zero back on dealer-added options, accessories, and extended warranties).

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See post below for update on the T-Mobile fee for paper bills.

Anticipating the rollout of the “Cash for Clunkers” program, Smart USA is offering a $99 a month deal on its tiny Smart fortwo car.

All you have to do is buy a Smart car (which lists for $13,335), apply the $4500 government subsidy, accept financing of 5.9%, and you get to pay only $99 a month.

Oh… one other thing… buried in the footnote.

*MOUSE PRINT:

$99 monthly payment based on customer trade-in of an eligible vehicle qualifying for the CARS $4,500 voucher level and a 36-month balloon loan with $0 cash due at signing and a final balloon payment of $6,667 [emphasis added] at the end of the loan term and a $13,335 MSRP which includes the destination charge and excludes tax, title and dealer fees. 5.9% APR financing for 36 months at $11.32 per month, per $1,000 financed.

Sounds like the tricky financing that got some homeowners in trouble.

Over a year and a half ago, we warned about a retail promotion promising $500 of free gasoline  if you made a particular minimum purchase at the store.  Poorly disclosed in the advertisements were the facts that you also had to buy $2000 of gasoline ($100 a month for 20 consecutive months), submit proof of purchase monthly, and then get back $25 in prepaid cards each month after submissions were approved.

As it turns out, the deal was too good to be true, and thousands of consumers received nothing after submitting receipts month after month.  Complaints flowed into Florida’s Attorney General, and he filed suit last February against Tidewater Marketing, the company behind the promotion.  Many different retailers around the country advertised similar $500 free gas promotions, including some tire stores.

Now, a group of tire retailers that offered the promotion – Tire Kingdom, NTB (National Tire & Battery), and Big O Tires — is trying to make good with their customers.  They are offering restitution to customers who received a free gas certificate from them after buying a set of tires between certain dates in 2007 and 2008.

Those customers have their choice of receiving a $100 Visa prepaid card immediately, or they can participate in an alternative $500 of free gas promotion since they “retained a [different] vendor that we are confident will meet our standards and your expectations.”

Why are these tire stores doing this?  Maybe they have a conscience, and want to maintain their goodwill with customers.  Or maybe it is this:

*MOUSE PRINT:

NTB is offering these programs to resolve any claim that you may have with respect to the Tidewater $500 Gas Program. If you participate, you will have to agree that the new program is a substitute for whatever rights you may have had in connection with the Tidewater program. This will include releasing NTB and Tire Kingdom from any claims that you may have had as a result of the Tidewater program. This release is an integral part of the offer.

So, you have to sign a release and agree to drop any claims you have or could have against them arising out of the original promotion.  For Big O Tires, their motive is a little more immediate:

*MOUSE PRINT:

If you decide to participate in this alternate program that Big O Tires is offering in this letter, you will be giving up your ability to join the class action (should the Court decide to certify a class), as well as giving up your rights to bring a claim against Big O Tires or BOTK for claims involving the Tidewater Global Marketing program.

A consumer filed a class action against Big O Tire, and is awaiting court approval certifying the class.

In any event, although the offers being made to compensate customers are a bit self-serving, don’t look a gift horse in the mouth.  Take whichever deal you prefer (noting that even with a different vendor, giving you $500 of free gas over the next 20 months is still a seemingly economically infeasible offer for the promotion company).  The deadline for signing up for the alternate program is May 15… so hurry.

Information and claim forms are here:  Big O Tires and Tire Kingdom/NTB.