Scared of car dealer scams? Detroit News writer John McCormick says chill. In an editorial entitled "Afraid of shopping for a car? Get over it;" McCormick chronicled his recent car buying experience. The automotive scribe claims it's no biggie; car dealers are populated by "courteous, knowledgeable and professional" sales staff. While we're all glad Mr. McCormick's had such a wonderful experience securing a new whip, the chances of anyone else emerging with similar satisfaction makes Powerball look like a safe bet.
As expressed here in numerous articles and comments, buying a new car ranks just above root canal surgery on most people's "Things I'd Rather Take a Stick in the Eye Than Do" list. (At least the root canal is endured under the influence of pain-numbing pharmaceuticals.) While I've yet to see a car dealership with a large banner proclaiming "Abandon All Hope Ye Who Enter Here," I'm sure you could buy a car in at least one of Dante's circles of Hell.
Car dealer profiling? Hardly. A few months ago, the mailman delivered an envelope bearing the logos of several GM divisions along with the words "Urgent Recall Notice." Although I don't currently own a GM vehicle, I've stabled several in the past. From time to time, I receive a recall notice from GM with a check box to inform them I no longer own the vehicle. This one was different. It was from a dealer– Bill Heard Chevrolet– and said I should call the dealership for important information concerning my vehicle (without specifying which one). I threw it in the circular file.
On Monday, The Georgia Office of Consumer Affairs filed suit against Bill Heard Chevrolet Company for "false and deceptive advertisements." And no wonder: there was no recall. The mailings were a ruse to get recipients to call Heard, so sales staff could flog rubes another car or a service contract. Heard attorney J. Matthew Maguire Jr. admitted that the faux notices were "inappropriate," but insisted that an independent advertising firm mailed them without Billy Boy's approval.
Folks, this ain't no nickel and dime operation. Heard operates 15 stores in seven U.S. states, with a claimed annual turnover of $2.5b. And this is hardly the organization's first brush with the law; the Georgia lawsuit chronicles 16 years of consumer complaints. The website ripoffreport.com lists 193 complaints against the Heard chain, from overcharging to high pressure sales tactics to removing the federally-mandated window sticker.
Heard's scams are literally the tip of the iceberg. Underneath this obvious deception lies a world of dealer deceit: hidden last minute extras added to the finance contract, "yo-yo financing" (calling the customer back for a deal redo), falsified credit reports, raising payments after completion, over-charging for "etching" (extra security marking) getting customers to sign blank paperwork, sweetheart deals with local lenders (hidden kickbacks) and more.
Clearly, what McCormick (and gullible buyers) can't see CAN hurt them. And yes, John it's true: Detroit's equally prey to this capitalistic cancer. According to the non-profit public interest organization Public Citizen, "Evidence from recent litigation, industry insiders and consumer complaints show that these practices are not restricted to a few areas or dealerships. Further, it is very likely that deceitful trends are spreading as more and more dealerships become part of major conglomerates."
If Mr. McCormick somehow believes these unscrupulous dealers are the exception to the rule, perhaps he should listen to Nat Shulman. A couple of years ago, the former owner of Best Chevrolet in Hingham, MA and columnist for Ward's Dealer Business served-up a brutally frank assessment of automobile dealer dishonesty.
"If dealer new car profit margins keep getting squeezed by Detroit so that the majority of dealers are losing money in their new car departments, these types of consumer rip-offs will continue to appear. True, they will happen in dealerships with questionable ethical standards, but who among us is immune from desperate measures when we're losing our butts every time we sell a new vehicle?"
At least McCormick got one thing right: "Part of the art of having a relatively happy car buying experience is some knowledge of the process. Take the time to research the procedure — easily done through a variety of Web sites — and you will feel much more comfortable when you step through the doors."
If you want that "relatively happy" experience, we recommend that your pre-visit research should include a Google search of the term "car dealer rip-offs." As for "getting over your fear," forgeddaboutit. Given the shady schemes bilking millions of American car customers out of billions of bucks each and every year, anyone who isn't afraid of shopping for a car will eventually learn that ignorance is the most expensive kind of bliss.
Click here to read Mr. McCormick's article
How much do you trust the average automobile dealer?
Click here to vote
Frank,
It’s the overhead. The carmakers became giants, behemoths, with enormous costs that had nothing to do with carmaking (or selling). And all that lurching overhead needs to get paid, in spite of contributing squat to the final product or ownership experience.
Which is why the makers and sellers are desperate to move product, and damn what they do to achieve it.
I’m exempting Toyota and a few other large companies, who are large in footprint, yet comfortably small in mindset. Have you seen the offices of Toyota honchos? Where Bob Lutz requires a city block …
Buyer beware when it comes to cars. Buyers should do whatever they can to pull the power back out of the hands of these fraudsters.
That said – supposed to be a true story from Sweden. Years ago, Swedes were religiously loyal to Volvo. At one point a letter was sent out to customers indicating that a new model was available, and that the customer might want to trade in the old one.
Apparently, thousands did so, immediately, upon receipt of the letter. “Excuse me, where do I park the old car? I’m here to buy the new one.”
if your fathers can`t manufacture cars, why do you think your sons can sell them? the same apples from the same trees.
A good friend of mine, a corporate lawyer, often finds himself working for a Heard-like dealership behemoth. (Yes, he sold his soul.) It is as bad as Frank says it is.
Apparently I’m in the minority here, but I actually enjoy the new-car buying experience – and I hope they never switch to a one-price-fits-all type of system. It isn’t really all that complicated – just do your research ahead of time, and once you figure out which vehicle you want be sure to have several dealers that sell that brand bidding against each other for your business. By doing that, you should be able to get the new vehicle at dealer invoice (minus any rebates) and you should always get at least KBB trade-in value for your old car (if not substantially more). If you don’t get that, or they add additional fees, leave and go someplace else.
I think one of the problems is that folks fall in love with a particular car – and one of the first rules of negotiating is that you must always be prepared to walk away. I’ve walked away from deals over less than $50 (on a $30,000 vehicle) – and if the salesperson knows you’re willing to do that, you have quite a bit more leverage.
The second mistake is that folks let salespeople pressure them into poor decisions, which is the opposite of what should be happening. They need to sell you a car a lot more than you need to buy one, because there are other brands and dealerships out there – and you should be the one pressuring the salesperson, not the other way around. When they try to pressure you, call them on it – and either just walk out or at least talk to their boss. If they want to discuss payments and refuse to give an overall price, or you see a four-square, just walk away.
In my area most of the dealers are pretty good, though the local Toyota dealer is horrible – they know that the next closest Toyota dealer is over 50 miles away, so they treat their customers like garbage. In comparison, the local Honda dealer is great – so it isn’t an import/domestic thing, it’s just the attitude at that particular dealership. In this area, the best dealerships I’ve found are Ford and Honda, and the worst are Dodge and Toyota…but other areas are probably different.
There’s a Bill Heard in Atlanta? These guys have made a “name” for themselves in Houston, hustling you the moment you stop at the security gate. Their one-car specials run in the classifieds aren’t just loss leaders, they are hacked up Impalas/Cavaliers with no wheelcaps, undesirable paint jobs (blue Cavalier with a yellow stripe, a la Starsky and Hutch)and the salesman makes sure the customer is mocked for considering the car…but there’s a parking lot full of normal Chevys they’d be happy to sell you. But they seem to make money!
The only way to know you’re getting a decent deal is to look up the dealer invoice, demand the car for $0-500 over invoice, and work with a fleet manager if humanly possible.
From McCormick’s article:
One other tip: Avoid, if possible, picking up your vehicle on the last day of the month, because that’s when finance departments are usually swamped with processing paperwork and you may be kept waiting.
I always thought this was the best time to save money. Even high-pressure salespeople want another unit sold for their monthly count, they will be more willing to deal at this time.
Who cares if you have to wait longer for financing?
After many many bad experiences with dealerships, I have found a couple dealer groups that are a real pleasure to work with (obviously, I am in the minority). Punchline: WHERE you buy is a close second place in importance to WHAT you buy.
Whenever I read about shady scams on big ticket cars Im amused at the claim of ripoff however. The typical charge by a realtor is 6% and hardly anyone seems to muster the energy or intellect to be offended. Perhaps the masses would prefer the car dealership just come right out and say, “…and here is our 6% fee…your signature here please.” Somehow, I think buyers would reward the shifty hucksters who front and backended deals anyhow. Gordon Gecko was wrong, “greed” isnt ALWAYS good.
Sajeev, Bill Heard has 15 dealerships in 7 states stretching from Georgia to Nevada.
And as far as having a longer wait for financing at the end of the month, I’ve never bought a car at any time of the month that I didn’t have to wait for at least an hour to get into financing because they were “taking care of another customer” (even when I’ve made an appointment to be there at a specific time), wait at least a half hour more while they “get the paperwork together” and then spend at least a half hour deflecting attempts to pressure me into buying Lo-jacks, glass etching, paint sealant and extended warranties at a greatly inflated price while trying to get all the paperwork signed and get the hell out of there.
While my wife and I were car shopping last year we stopped in at the local Mazda dealer. We both swear that the salesman’s desk was bugged because everytime he would leave to go talk with the sales manager he would come back and repeat almost word for word what my wife and I had discussed in his abscence. After the third time (I can be a little slow sometimes), we said enough already and walked out with the salesman following telling us he’ll knock more of the deal if we’ll just come back in. It almost makes you want to buy a car and hold it instead of leasing and having to go shopping every three years.
LK: “I’ve walked away from deals over less than $50 (on a $30,000 vehicle)”
That’s a little more than one tenth of one percent. You must have a lot of time on your hands to walk away (from what had to be a hard fought deal), over such a relatively minuscule amount of money. You probably spent more than that on gas driving to another dealer.
“We both swear that the salesman’s desk was bugged because everytime he would leave to go talk with the sales manager he would come back and repeat almost word for word what my wife and I had discussed in his abscence.”
That’s a common trick. When they leave the desk they leave their phone on speaker phone and go listen to you at another desk.
From Nat Shulman’s prescient remarks the problem with the retail car business is that there is no money left in the business.
The structure of the new and used car business is shifting profits to manufacturers and captive finance companies owned by the manufacturers.
The dealer stuck in the middle is resorting to a variety of alternate venues to generate a profit, and stay in business. Dealers still make a profit, the question is how do they make a profit?
If any dealer can make enough money up front on a new car sale he does not need to resort to all sorts of imaginative schemes.
The Japanese manufacturers with less dealers, and selling more cars, their dealers should not need to resort to as much creativity. These dealers owned by large and often public dealer groups probably have the same creativity as the others to literally make more money and support the non performing stores.
Could it be that when customer buys a Toyota from a dealers owned by a large dealer group, the profit on that sale also subsidises the non performing Ford store owned by the same dealer group.
Customers should become dramatically more vocal and express their opinions with manufacturers as a starting point.
While my wife and I were car shopping last year we stopped in at the local Mazda dealer. We both swear that the salesman’s desk was bugged because everytime he would leave to go talk with the sales manager he would come back and repeat almost word for word what my wife and I had discussed in his abscence.
This is a common practice. I’m in the communications business and install these systems quite often.
Yeah, Bill Heard in Houston is not exactly known for their ethics either… Very high pressure sales staff as well.
snoissea: Usually what happens in a situation like that is that the salesman chases me across the parking lot, and catches me before I drive away to tell me to forget the $50. Basically, what you’re doing is showing the salesperson that you’re willing to walk away – and once they realize you’re willing to do that it changes the entire negotiating process. In one case a salesperson actually jumped in front of my car as I was driving it out of the lot, so he could tell me that his sales manager had ‘reconsidered my offer’ and was willing to make the deal at my price.
The thing is, usually the salespeople don’t really think someone would leave over $50, or even $500 – and the only way to make it painfully obvious you will is to grab your coat and walk out to your car. 90% of the time they’ll run out and catch you when they realize you’re serious – but there’s always the chance that they won’t. $50 might not be important in the big picture, but it isn’t that important to the dealer either – and you need to move the salesperson from “are you willing to leave over $50?” to “are we willing to lose this customer over $50?”
Here is a funny story about bill heard in houston. A friend of mine was looking at SUVs. He wasn’t ready to buy buy wanted to drive the new Equinox. After the test drive, the cheesy chain smoking salesman sat us down and made us write on a blank sheet of paper what we would be the car for.
We said, we were not at all ready to buy and no price would be willing to make a deal today. He wouldn’t let it go. So i wrote the number 1 on the paper (as if i would pay $1 for the car).
That irritated him of course, and then he kept on the hard sale. He then started to insult my friend who said he could never buy a car w/o talking to the wife. The salesman said “who wears the pants in the house. You need to ask for permission from the wifey to do everything.”
He then kept getting up to talk to the mgr and wouldn’t give us the keys back. We saw them on the desk and just grabbed them and left.
I heard an even more unbelievable story at the same dealership. One a salesman again would not take no for an answer, but a prospective buyer got sick of it and just walked out. As you drive out of Heard, there is a guard and an gate prevented you making a quick getaway.
As the guard was finally allowing the guy to leave and the gate arm lifted, the salesman came running out and threw himself on the hood of the car to “Wait my mgr said we can do an even better deal”.
I wonder what the sales training is like at that place. It must be like the movie boiler room or glengary glenross.
These guys have made a “name” for themselves in Houston, hustling you the moment you stop at the security gate.
Amen. They suck. Twice I’ve tangled with them while helping fellow-employees try to recover their trade-ins. And if you’re a woman and/or minority? They’ll pull every trick in the book. It’s disgusting, and they (among others – I’m looking at you, Joe Meyers) give domestic dealerships a really bad name. It’s hard enough trying to sell inferior products.
I have a dream that whence I retire from my current career (3-5 years), I can somehow make a decent income by serving as Houston’s auto consumer advocate.
/rant off
It has always amazed me that while most people know about all the BS that goes on around buying/selling a new car, the manufacturers have never (that I know of) stepped in and tried to do something about it. Couldn’t have anything to do with having less than a clear conscience themselves, could it?
It’s funny, but as I read these stories, I enjoy pondering the legal ramifications for the dealers. In most states, electronicaly eavesdropping on a conversation in which the participants have a reasonable expectation of privacy is a felony. The marketing consistantly falls close to false advertising. I don’t think we can quite make the case for false imprisonment, but some of these stories come close. I can’t wait for some Atty General to get bored…
check your own state eavesdroppig laws here: http://www.rcfp.org/taping/states.html
I can’t wait for some Atty General to get bored…
Call me a cynic — hey, you wouldn’t be the first — but I suspect that the amount of sales tax revenues generated by car sales in most states will help to ensure the continued lack of interest by the various attorneys general.
This business has too much clout to undergo any major surgery any time soon. The governments want the tax money, the manufacturers like the current system, and the dealers helped to invent the whole thing in the first place, so there’s no reason for it to change.
I have probably purchased 15 new vehicles in my life and probably 6 or 7 times had a significant negative experience with a delaership justifying me walking out and/or threatened legal action against a delaership. Two items in particular have really galled me:
1) A salesperson telling me the dealership has sold the advertised vehicles, though I would get to the dealer the minute they opened on the first day of the advertisment. I would ask for the dealership to prove they sold said vehicles and of course, they could not. I would then track down the vehicle on the lot (by comparing VIN to the VIN legally required in the ad). Only then would I suggest I should call the Dept. of Motor Vehicles investigative unit did the dealer cooperate
2) The sales person coming back and saying “the manager says there is not enough money in the sale to sell it to you (at the price quoted by the salesperson).” I just said fine, there is not enough money to make me want to do business here and walk out.
Caveat Emptor, be firm, professional, do your homework, don’t go the dealership when you are tired or hungry (that is another thing, it is amazing that dealerships can have customers around for hours and never offer them a soft drink, a sandwich or aything.) And most importantly, don’t fall for all the add-on BS that will only add “48 bucks a month to your payment”
If you are not comfortable with the dealer or the salesperson, LEAVE. Get up and walk out the door. The service dept is more important to the consumer than the sales dept. If the sales dept is bad, you can bet the service dept is even worse. Where you buy is as important than what you buy.
Ralph SS:
July 12th, 2007 at 12:49 pm
It has always amazed me that while most people know about all the BS that goes on around buying/selling a new car, the manufacturers have never (that I know of) stepped in and tried to do something about it.
I am wondering what state franchise laws are, and if manufacturers could terminate dealerships for similar complaints and/or a finding of guilt? We are always talking about how bloated the big 2.7’s dealer network is, and this would be one way to trim off some of the fat. But, on the other hand (along the lines of Pch101’s comment about AGs), do the 2.7 really want to rid themselves of megadealerships that take on such big inventory?
Ok, personal horror story: About 3 months ago my wife and I were looking for a lease on a 07 Escape as the 08 models were arriving.
We assumed the remaining ’07’s would be a good deal, but supply was limited and we were having trouble finding one with the options we were looking for…a sales lady at Bill Brown Ford claimed she had 2 ready for trade from out-of-state dealers and gave us a reasonable quote(with VIN)to prove it.
The next week, she went on vacation and told us to work with her partner who later couldn’t trade the first one, and couldn’t ‘find’ the other one in the database. But he had “found” one for $30 more a month with add’l equipment we never wanted. We reluctantly accepted this new ‘find’ and scheduled to pick it up…it never came. The original sales woman called when she returned with another ‘find’ for another $20 more…now $50/mo over our original quote.
Again, knowing that supply was limited we accepted the higher price w/ more options and scheduled to pick it up. One hour before pick up, she called to say that she had mis-calculated and that the price was going up by another $15/mo….$65/mo over the original quote.
We went in to talk to the sales manager who explained that he would not lower the price back down, but scolded us for being “difficult customers who probably never wanted to purchase a vehicle anyway”.
WTF!?!?!?!
So we bought an ’08 down the street and let the ’07 that they ‘found’ sit on his lot. I hope it’s still there.
Ok, this really gets my dander up! I have been a domestic dealer for over 27 years. Twnty years in a Detroit suburb and seven years in Florida. I have always run a ethical dealership. If I catch a salesperson in unetical practices I will fire them on the spot. My store is normally in the top 1% of General Motors CSI scores.
With that said, as in all walks olf life ther are the good the bad and the ugly! do a little research and you will find the dealers in your area that will trat you properly. Remember one thing a dealer has to make money. the average profit is under 3% not a lot for retail. If you check with the internet and get a decent price take it beause that dealer will usually give you a far better service experiance!
Bottom line not all dealers are scums, and believe it or not all customers are not honest!
Car dealers are big political contributors at the state level, as are real estate folks. Don’t expect any “justice” via your local governments.
Do expect a lot of laws keeping those folks profitable by stifling competition.
I guess I’m the “resident auto historian” but I have to say that when Toyota and Datsun (now Nissan) were setting up dealerships in the USA in the 1960’s, they truly had a tough time getting anyone at all to sell their wares. (Not forgetting that it was about 20 years since WWII and a LOT of men would not even consider anything made in Japan as a result – some of which was surely racism, since tons of people bought German VW Beetles, but I digress…)
The thing was, I distinctly recall reading (I think it was in “The Reckoning” by Halbersham) that Nissan/Datsun had to pay out something like a 17% profit margin on new cars to even get mediocre used car dealers to sell their new wares.
Ironically, tons of these guys ended up a lot richer than big 2.8 (or AMC) dealers after 1973-1974 (the fuel crisis for those of you who weren’t even born yet – during which Japanese small car sales skyrocketed).
Yes, it’s interesting to note that we “accept” a 6% “standard” margin on a $250,000 home when we buy it through a realtor – yet quibble for $50 over a deal with a guy at the new car dealer who is trying to feed his family?! Weird, if you stop and think about it.
When I bought my Prius, it wasn’t like anyone was offering discounts. But I specifically told the two dealers I put deposits on cars, “I’m not paying over MSRP”. The two cars arrived 9 1/2 months after my initial order, at two dealers 40 miles apart, and I had no hassle getting my deposit back from Swaffer’s Toyota of Cadillac (Michigan) – they just lost out because the car they got was black, and I wanted anything but…
CFISCH: Amen!! The almighty buck is not worth my reputation. Congrats, your return on a domestic store is far better than what we pull from a Honda store, our competition is fierce! When will people learn to vote with their feet?!! Do your research people! Refer back to Megan’s article on how to buy a car, that was great advice. Stop supporting the scheisters, don’t even give them the time of day and eventually they will become insolvent all on their own. In regards to manufacturers not being able to clamp down on the turds who give the rest of us a bad name (not trying to stereotype here, because not all lawyers are bad)blame it on unscroupulos lawyers who make a living defending the scum of the earth (again, not all lawyers are bad, please don’t interpret this as a stereotype).
Our attorney general regularly goes after shady dealers, and I applaude it!
I miss Nat’s column…
Apologies for the 2nd post – but I forgot to mention the flip-side of “not minding if the dealer actually turns a dollar on a deal.”
I want the dealership to actually BE there when I need service or, if I’m a happy camper, another car! If they’re a good place, I want to actually reward them with something resembling a living wage…. Yeah I know I must be nuts. But, I won’t buy from high-pressure boiler room places, so don’t reward them. So it does work both ways.
Reward good behavior, punish bad behavior. Classic methods of teaching puppies to behave, and it works with car dealers too! Ha.
(OK cfish and Rick – my puppy comment is supposed to be humor, okay?! It’s humor – honest!)
Glenn 126: No offense taken, and you’re absoluetly correct, you ever have to train anybody?
Unethical dealers will tell you they do business this way because customers lie and try to screw them. Just look for the “Buyers are liars!” slogans. The problem with this justification is that two wrongs do not make a right. Just because customer “John” walks into the door and wants to screw you and buy a car from you for $5000 under invoice and get $5000 more than book value for his trade(that was in 3 accidents with a salvage title he didn’t tell you about), doesn’t give you the right to screw customer “Susan” that walks in your door by selling her a car for $5000 over MSRP(“market adjustment” and high interest rate obtained by lying to her about her credit rating) and giving her $5000 under book value for her trade. Customer “John” is dishonest, but you DO NOT HAVE TO SELL A CAR TO HIM, and you certainly can’t use selling a car to him as a reasonable excuse to try to screw customer “Susan” that just wanted a fair deal. Business is a two way street. Customers shouldn’t do business with dishonest dealers, but dealers shouldn’t do business with dishonest customers either. That way, you won’t have to screw the next honest customer that graces your door.
How about the service department? That is slowly becomming the next palce where scams will be comming from as things slowly become “slightly more transparent” on the salesfloor. The great thing about service department scams is that very few people know very much about cars, and it is easier to hide things, recommend unnessissary service work, and go out of ones way to deny warrenty claims. And look legit at the same time. Where else but a dealership will they try to convince you that the 50K Km service should be preformed every 15K Km as part of the dealer recomended service?
You only deal with the saleman once, but regularly with the servcie department. What most dealers don’t realise is that poor service especially when the car is under warrenty will lose lots of future servcie buisiness when the warrenty expires. That was my experience with the local (North GTA) Pontiac/Buick dealerships.
Fortunately I have a great independant mechanic.
cfisch
I bet you are on the premises during working hours.
I will only purchase cars from privately/family owned dealers where the principal is physically present. Most often you can do a deal with him in about 5 minutes.
It relieves a lot of pressure when you are buying a car with no emotional attachment to the shiny new item to be yours: I negotiated my wife’s new car, she picked it, I haggled for it, and I did not care if I bought it from that dealership (we walked on that lot to check colors, no intention to buy) But we got harpooned, and I just stated my goals: I’ll pay this much total, and I’m already financed.
They tried all their tricks and it did not work, they finally caved in, sold me a Murano under MSRP and traded in a Cirrus for twice KBB. I was ready to walk away twice, and I would have if they did not insist that I keep negotiating.
When it’s time for a new car for me, I’ll use a broker or some carsdirect.com kind of service. This is the price, no haggling. Pay the man, get the car.
Asking a buying service or broker for its best price is financially and psychologically cost effective. It confirms dealer invoice, holdback and rebate information and provides an essential benchmark, but can often be improved by several hundred dollars. If not, complete the deal with the broker.
It is the salesman’s job to make the offers. Reject them until he reaches your target price. Do not disparage the product. Why would you buy a lousy car? Though salesmen characteristically have limited appreciation for truthfulness, avoid making dishonest statements. Falsehoods are readily detected, damaging, and squander the moral high ground. Be mindful the closing office may be equipped for audio and video eavesdropping. The last minute walk-away is a dramatic gambit. The salesman will almost certainly pursue you offering amends. Regardless, you can return and resume where you left off.
Treat assurances of service superiority with profound skepticism. The manufacturer will not honor dubious warranty claims, and the service department will charge premium rates. Paying too much improves neither ethics nor competence, only profits.
Anybody can pay full price. The dealer won’t close the transaction unless he can live with the terms, nor should you. Don’t delude yourself you can hoodwink a dealer. The salesman deals several times a day, you every few years. You are swimming with sharks!
So why does it have to be this way? The last GM car I bought (awhile ago), I received a survey of customer satisfaction. The survey asked about things like the quality of my car when it was delivered, if the salesperson explained everything I needed to know about the car etc. Then it asked if my car came with a full tank of gas. The salesperson specifically told me that no longer happens. So I answered truthfully and a few weeks later the dealership sent me a letter to show the service department the letter the next time I had my car in for service and they would make sure I had a full tank. So those in the industry should tell me…the customer…why it is that if I need to purchase a car, I should do my own research and also learn the “game”. Why is does your potential customer have to go to you, fully aware that you can’t be trusted to be an ethical supplier of good and services. The entire car industry has built that reputation over generations.
That’s not just the big 2.8 anymore either. A few months ago, I was asked by a good friend to go with her to buy a Honda. She was totally stressed out as she was in need of a car in very short order and was going to pay full MSRP for the car anyways. This should have been a very simple deal. I went in and asked a very simple question regarding something I read on Honda’s own website and the first thing the salesperson did was lie to me. Buying that Honda was the most stressful deal I had ever encountered in buying a car…and I had bought lots of cars in my lifetime.
Not all dealers are scums…but why does the customer have to figure that out for him/herself?
We’ve had nothing but positive experiences at our local Honda dealer. Our method goes like this –
A) Research what we want on the net. Figure out what it should cost.
B) Arrange financing through our credit union.
C) Go to the dealer a couple months after the new models come out, hoping they still have last years model – the one we’ve researched.
D) Test Drive.
E) Talk money. We’ve always had the salesman start with a figure that wasn’t much above invoice. (My wife is Asian, maybe they figure she’s going to dicker them down to invoice anyway – why waste time)
F) Accept the offer if it was reasonable. It doesn’t have to be
exactly what we had in mind. If it’s close we’ll figure they deserve some profit for treating us with respect. Dicker just a bit if it was fairly reasonable, but not quite where we wanted to be. We’ve never had an absurd first offer from the salesman. We always let the salesman try to sell accessories – hey, he needs to feel like he tried, and who knows, maybe we do want something. (Luggage rack, fog lights? )
G) Come back in a few days to pick up the car.
The fiance is already done at the CU, so we just meet the dealership finance person for about 3 minutes. We hand over the check, we sign the papers, and the salesman hands us the keys.
This is how cars should be bought and sold.
We always shop at other dealers for competing models, just to gauge the local dealers. I’d never buy from my local Toyota dealer because of the high pressure salesmen.
Why not just walk if there is any BS? Would you put up with dealership type BS to buy a refrigerator? A garden tractor? Anything other than a car?
I can pretty much write a book (or two) about the new car dealer environment.
It’s not standardized at all. There are dealers who will do everything to break the rules (not bend… break), and yet, people will continue to buy from them.
This happens for three simple reasons…
1) The politicians are paid off… BIGTIME. If you don’t believe me, guess who holds a seat at the board of regents for the University of Georgia. You can also take a gander at all those nice title pawn shops and the lobbyists they hire to uphold their predatory practices.
2) Most people are uninformed and HIGHLY unorganized. Heck, there’s a lot more to life than to try to figure out ‘the game’ in whatever consumer good you seek. Unfortunately enough people in this world give in to smiles and high-pressure sales tactics to make the scum in this world very wealthy.
3) I think we all can use our creativity to a more productive end when it comes to these things. Perhaps it’s time to expose these people for the axes they are. There are many of ways of doing it… and the neat thing about the web is unlike your daily newspaper, you can keep the information front and center to protect the public. You also have a few other rights that should be strongly considered as well.
Here is our local dealer monopoly:
http://www.bobhowardauto.com/
Web site looks OK, but what is that group really like to deal with? Do they practice all of the sleezy slimy tactics that dealers are despised for?
Damn Frank, you’re from my neck of the woods! ^_^
I just purchased a Mazda3 and had a great experience. Why? Research.
Months of research.
I didn’t do my dissertation on the vehicle, but taking 10-15 minutes a day to look up new/used selling prices, finding the exact model/trim/accessories you want *before* even walking on to the lot is key. Only then is it time for a test drive. Chat up the salesperson, get your test drive in, and walk. You are not buying that vehicle today, so act like it.
Time for more research – and reflection. Recall that you are not buying a car, but selling them your money, and you want to do that as best you can without screwing anyone. The dealer doesn’t deserve to be ripped off, and neither do you.
The best thing I can recommend is go to the dealership with a good attitude. Everyone likes a smiling, jovial customer, and your good vibes will rub off on the salesperson. Get a dialogue going, build a little friendship – it helps so much when at the table.
Don’t be afraid to walk – some dealerships will try to screw you no matter what. However, if you did your research, this probably won’t happen.
Let’s recap:
Know what you are buying and what you are paying before you drive
Test drive without even considering a purchase that day
Maintain a great attitude when buying
Respect first and walk if disrespected
Enjoy yourself!
beken “why it is that if I need to purchase a car, I should do my own research and also learn the “game”.So why does it have to be this way?
Why is does your potential customer have to go to you, fully aware that you can’t be trusted to be an ethical supplier of good and services”
It is this way because they make MORE money this way. If you are a naive, a fool, inexperienced, weak, or not willing to invest time and effort, then you will pay more. It is this way because they can and it is this way because Steven Lang is very correct in that the dealers are very politically connected. They are consistently among the top political contributors at the state and local level
It is not just the domestics who try to screw you. I have said it before on this site, and I will say it again: If Honda dies, it will be their dealers fault. I have literally been screamed at by sales managers at 2 seperate Honda dealerships in my area. I have passed on buying a Honda on two seperate ocations due to their dealers conduct. I have owned a few used ones, but I will NEVER buy a new one.
I ordered a Mercedes GL320 7 months ago and agreed on a price. When the GL arrived last week, the dealer would not honor the price. They underquoted the MSRP by $2500. I responded that we agreed on a price and it’s not my concern how they arrived at the price. That’s what I’m paying. Dealer responded that they could sell the car for MSRP to someone else. (And he’s right. You can’t find these things on a dealer lot anywhere.)
I went up to the GM of the dealership and the best I could do was $1500 off MSRP. Take it or leave it. After waiting 7 months for this car and knowing that it would be another 7 months to get another one (at MSRP no less!) I ended up taking it. In light of the demand, I guess $1500 off is pretty good, but they should have honored their original quote.
The fact that they made me wait 7 months for the car before springing the price increase has me fuming. I can’t wait to get the dealer satisfaction survey in the mail. They will not get the coveted top marks!
Farago should hire a little old lady with a hidden camera and send her on a tour of dealerships as a undercover shopper.
Then run the tape and use his best John Madden impression to do a play-by-play on all the B.S. that comes from the dealers.
This could be an interesting case study and public service.
rtz:
Did you ever visit Lynn Hickey Dodge? They were a slime ball outfit that used every dirty trick in the book.
I purchased two vehicles from Bob Howard. I wouldn’t say they are more or less above board than any other dealer in the OKC area. They are all sharks but one can get a decent deal since there is so much competition. You just have to go in knowing it will be a long ordeal.
I was wondering how the manufacturers feel about thier dealers being slimeballs, and if they care at all.
It seems that most manufactuers keep their distance by taking the “dealer is an independant buisiness not directly affiliated with us” stance. Especially the domestics.
When I bought my Pontiac on a GM supplier X-plan, several local (North GTA)dealers tried to do their best of telling me that the X-plan doesn’t exist. As I was walking out, all of a sudden something of a similar nature was available, but they tried to inflate the invoice by $2000 or backend the deal with all sorts of outragious fees under the giuse that GM requires it on
X-plan deals. Those same dealers got very angry when I spelled out the exact terms of the X-plan agreement given to me at work and GM itself, and all of a sudden refused to do the deal.
My letetrs to GM were answered with the standard “thanks for bringing this to our attention” format. My phone calls were answered with an “its between you and the dealer…we know that salesmen can get pushy” type of remark.
The manufacturers-especially the domestics-are only hurting themselves by turning a blind eye to thier dealers slimy sales tactics.
mbslk350, I don’t understand. You had a signed agreement and deposit down for a specific transaction. Then when the item arrived, despite the signed contract, they bumped you for another $2500? Why not just tell them to talk to your lawyer?
From what I’ve read in all the ‘dealership experience’ articles and accompanying posts, having a crap dealer is a function of . . . the dealer. There seem to be good ones and bad ones for every brand.
If anything, I’ve seen evidence from the posts that dealers selling a ‘highly desireable’ product may be the ones who’ll tend to treat their customers the worst . . . they know another one (or two) will be by shortly.
So why do people here need to take this equitable issue and try to make it into another ‘bash the domestics’ screed? OK . . . right . . . the Toyota sales guy only acts like a jerk because he’s under pressure to subsidize his boss’s failing Ford shop. Right.
Sometimes I am just amazed.
I’m reading some of the comments here and I don’t understand.
Why would anybody allow themselves to be mistreated in any way?
This idea of waiting 7 months for a car and then accepting to pay $1,000 more than agreed, just encourages the notion that these tactics work. Why would we expect them to change?
Research is the key, but as has been stated, a positive, friendly attitude doesn’t hurt. Above all, don’t waste the salesman’s time asking for test drives of cars you’re not going to buy. And by all means, be prepared to walk away regardless of how much you wanted that car.
In all of my car buying experiences (numbering in the hundreds), I’ve never dealt with a dealership or salesman that I felt was disrespecting me. But I also treat them with respect and appreciate their professionalism. It takes less than 5 minutes to realize who you’re dealing with.
For what it’s worth, I have a few car salesmen that I have been friends with for over 30 years where that friendship started out on the showroom floor.