SMART MONEY: Truck's mirrors causing buyer sticker shock
June 30, 2013 2:50 AM

DEAR BRUCE: I recently purchased a new truck. On the sticker was listed, as part of the option package, “mirrors — power heated foldout.” The mirrors are neither power nor heated. The dealer said it wasn’t supposed to come with power heated mirrors. That was a mistake by the factory. What do I do to make the dealership honor its sticker? — T.B., Yucca Valley, Calif.

DEAR T.B.: If the sticker says it was part of the option package, you are entitled to it. I would insist that the dealership fix the problem. The mistake was not your mistake.

You have the sticker and it says, “mirrors — power heated foldout.” Since the truck was delivered without these things, tell the dealer you expect the full credit payable to you for the lack of what the sticker indicates.

If the dealer won’t agree with that, then go to the manufacturer and make a very strong complaint.

DEAR BRUCE: My husband has retired, and I’m close to retirement. Our home is worth about $900,000. We have a $320,000 mortgage at 5 1/2 percent. We have a rental that’s worth about $240,000 that nets about $800 a month. In addition, we have $30,000 in other investments.

We are interested in buying a condo for a second home in Hawaii for about $400,000. We would rent it out when we’re not using it.

Should we do it? If so, should we take out a mortgage on the Hawaiian property, refinance our own home or mortgage the existing rental? — Kay, via email

DEAR KAY: You are going to have a lot of property, a lot of debt and very little in the way of liquid assets. If you are in fact thinking of buying the Hawaiian home (and I am not sure that’s a wise move), the first thing you ought to do is get rid of the home worth $240,000 that is netting around $10,000 a year. That’s only 4 percent of its value, and that is not enough in terms of income.

You have a 5 1/2 percent mortgage, and in today’s world, if your income is sufficient, you should be able to reduce that by 2 percent or more. On a $320,000 mortgage, that’s not exactly chopped liver.

Since you have a substantial mortgage and you want to enter into another deal, I am guessing you would have to put $100,000 down and have another $300,000 mortgage on the house in Hawaii. Now you would be far too much in debt with $600,000 in mortgages with payments that would be crushing, in my opinion.

The $240,000 home isn’t doing very well. That money should easily net you between $12,000 and $18,000 a year, properly invested, and you would be free of the responsibility of being a landlord.

You might wish to sit down with a financial adviser and go over all of the numbers. Clearly, you would be much better off simply renting a vacation home.

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