Every day, I am surprised by car buyers. There is a huge lack of understanding about what goes on, during a car deal. Here are some of my observations:
Many people believe there’s always some more discount they’re not getting. I understand this. Every time I bought a vehicle, I always felt I had gotten ripped off, somewhere in the process. I didn’t know where it occurred, but it was my gut feeling. Even when I went to a dealership that advertised “No Haggle Pricing!” I just knew something didn’t work out in my favor. My feelings were justified, in some cases, and sometimes they weren’t.
Not to sound off for a competitor, but my 1992 Acura Integra GSR purchase experience was probably my best ever (at least, until I started selling them to myself). I bought one of the very last 1992s, after the 1993s had started shipping to dealers. It was a color I loved (a metallic turquiose), but was probably one for which most people would not have opted. The dealership was also a very good, customer-oriented dealership. A few months, after my purchase, the radiator hose blew. I called the dealer to see about having it towed in and the Service Manager came out to me, at the side of the road. They did not have the hose I needed, in stock, so he brought the closest thing they had and customized it on site, poured in some coolant and had me on my way! I will never forget that customer experience. If Acura had offered plug-in vehicles, when I was shopping for my first one, I would probably be driving one now.
I have definitely experienced this ripped off feeling myself. My very first new car purchase, when I was 18 years old, was a 1976 Chevrolet Monte Carlo (yes, I am that old). Just three exits from the dealership, it overheated. The thermostat was faulty, so the engine didn’t get enough coolant. After being repaired, the car always made a rattling noise, somewhere under the hood. I was told this was normal and was the “heat riser.” I swore to myself that I’d never buy another Chevy, for as long as I lived.
I know. I know. I’ve bought or leased 5 Chevy Volts so far and am now an EVangelist (EV specialist/salesperson) at a Chevy dealership. Sometimes we are confronted with something that makes us enjoy dining on crow…
But back to being ripped off…
I have seen people keep pushing for a lower price, when I know we’ve hit rock bottom. Sometimes, just to clear out old inventory that will soon have no manufacturer incentives, dealerships will sell below their actual cost. I’ve done this (with management approval, of course) and still the customer thinks there’s more discount available. They have even left, without buying, passing up an incredible deal. The pricing procedures in dealership sales is the reason for this distrust/misunderstanding. Manufacturers have incentives (discounts) that change monthly, in order to move inventory that isn’t currently moving. One day, I may have an unbelievably great deal, that is not available the next day. This really happens, but it makes people wonder if they’re being jacked with.
Many people do not understand basic math. I do not mean to sound harsh, but I’ve met people who don’t understand why we sometimes cannot get to the payment they want. I’ve spoken with people who start out wanting a $65K vehicles at a monthly payment, “no higher than $600 per month.” I’ll usually have to show them that their $65K vehicle, after Texas’ sales tax, is actually going to have a drive-out price of $69K. If we take that number and divide by 72 months (the usual finance term) we’d be at $958 per month…at zero percent interest. Occasionally, there are zero percent financing incentives, but usually this is not the case. A vehicle with a $600 per month payment would have to be priced at around $40K, before tax AND get zero percent financing, as well! Needless to say, it’s important to understand the customer’s expectations, before showing them a vehicle they cannot afford, but often they’ve been told, “Never let the salesperson know the payment you want.” These people (and their salesperson) get the bad news, only after wasting each others’ time, and for a commissioned salesperson, time actually IS money.
Some people don’t read or understand the contract they are signing. I have met people who have been trapped by less reputable dealers/finance companies. There were hidden fees they paid, usually due to poor credit, just to get their vehicle financed. They weren’t really hidden. They were in the contract, but were ignored because the customer had to have basic transportation, in order to keep their job. They were charged stunningly high interest rates but were unaware of it. They were only fixated on the payment. They just made a mistake, due to their circumstances, at the time of purchase. I’m proud to say my dealership only deals with reputable, non-predatory financing sources. I have had customers, crying at my desk, when they realize what happened, when they got their last vehicle. They were trapped in a crappy, unreliable car, because they still owed so much more than it was worth. I am happy to say I have been able to save some of these people. I did this by finding a new vehicle with enough incentives/discounts, from the manufacturer and the dealership, that I was able to get them out of the bad situation, into a much better one. It’s kind of a specialty of mine. Like many of the things I do at work, it is time-consuming, but helping a person out of a bad deal, creates a new client that won’t go anywhere else for a new vehicle, until they’ve come to see me.
Many people do not understand how commissioned sales works. Like the example above, people will drive to the dealership, when they have no intention/ability to purchase. They just want to check out cars as a diversion and have no intention of buying a vehicle for months, if not years. However, they want a salesperson to describe the differences between trim levels or between vehicles. They expect and deserve great customer service, and may buy eventually, so some salespeople (like me) will spend a great deal of time with them, while having to ignore other customers who may actually want to drive away in a new vehicle today. I have spoken with car salespeople who will be rude and say, “Come back when you’re ready to buy. You’re wasting my time.” This probably burns that customer for that dealership, even though, in some ways, the salesperson is justified in saying what they said. A commissioned salesperson makes zero income, unless they actually sell something. There is no minimum wage (other than zero) in this business. Imagine going to work and working hard, in the blazing sun or freezing wind, all day, only to end up making nothing for your efforts. That’s the life of a commissioned salesperson. I strive to give the best customer experience possible and spend a great amount of time with my customers, both before and after the sale is complete, hoping that they’ll recommend me to their family, friends and coworkers. I have even explained to clients that, as of the moment their sale was complete, I am effectively unemployed. They look shocked, thinking I have just been fired, but I explain that a salesperson is unemployed until they start their next successful car sale. The dealership and manufacturers track customer satisfaction, through surveys, so this is very important, to them as well. In fact, dealerships can earn extra cash from the manufacturer, if their customer satisfaction surveys are above a certain mark.
Another common problem, is the customer asking a second or third salesperson, at the same dealership, to show them a vehicle. The salesperson with which they’ve been working is out of pocket for a moment, perhaps finding a particular vehicle, putting their proposal paperwork together, locating a brochure, out to lunch or have the day off. The customer grabs the nearest warm body and asks to be helped. In the world of commission sales, the car deal’s commission is now split between the two salespeople. This hurts both the customer and salesperson. When a deal is split, the negotiating salesperson knows they’re going to make half the commission they normally would. Due to this, they are much more reluctant to discount the vehiclen as much as they would have, had the deal (and commission) been theirs alone. Who loses? Both the original salesperson and the customer!
As you may know, I once worked for Apple and got my customer service indoctrination there. People love going to the Apple Store just to hang out and check out the latest tech. Of course, Apple salespeople are not commissioned. They receive a salary for what they do. They’ll take home a check, whether you buy something or not. Many of them, like me, are tech nerds who absolutely love talking about their products. As long as they’re not overlooking customers who need help, their managers are happy to let them spend large amounts of time with their clientele. I have had that used against me, in plug-in vehicle sales. The client will spend a great deal of time with me, asking everything possible about the Bolt EV or Volt, only to buy from a dealer that is selling below cost, because that dealer doesn’t understand the product and has decided to cut their losses. The customer will then call me, after their purchase, asking more questions and for my advice on driving, chargers, etc. They found that the salesperson, who gave them such a great deal, was clueless, once the deal was done. In the past, I have reluctantly answered their questions, but have now decided I need to spend that time helping the people actually interested in buying from me.
Most people, even those who really appreciate great service, won’t return a satisfaction survey. A salesperson’s career can be made or destroyed by the customer satisfaction surveys. If an entire dealership’s average customer service index (CSI) falls below a level, set by the manufacturer, the dealership can lose bonuses and the salesperson can lose cash incentives, paid directly to them by the manufacturer. The customer receives a survey via email or traditional mail and sees it as junk mail. Most think it is worthless, both to themselves and to the salesperson/dealership. This is a failure of the salesperson. The salesperson should make sure the buyer knows the importance of this, but many are already looking over their customer’s shoulder for the next sale and just want the buyer to leave, in their new vehicle, to free them up to find the next buyer. There is a running joke, among my friends at work, about the time I spend teaching my customers about all the functions of their new vehicle. It definitely costs me, in that moment, because I miss potential sales. However, as the General Sales Manager here once told me, “You’re customers don’t just like you. They love you. I just want them to love you faster.” I have found that my time investment has several benefits: 1) My customers are very loyal, both to me and my dealership. Most tell me they won’t even shop at other dealers because they know I’ll treat them right. 2) My customers recommend me to their friends and family. When I started selling cars for a living, I thought it would take at least three years, before I got repeat business from a customer. As it turns out, I have many, many customers who have already bought multiple cars or trucks from me, although I’ve been in the business less than four years. In fact a few have bought four vehicles so far! I’ve also seen referrals from my customers generate multiple sales from their family members, friends and coworkers. This makes for a much easier, less adversarial, sale and my spending time with these referrals generates even more referrals. I believe this is the best way to grow my business and income. It is a longer road, although much more enjoyable, to success.
Some customers will become friends. This caught me completely by surprise. I’ve been invited to parties, out to have a few beers, to dinner, or to ride in a new vehicle they got from someone else (never something I could have sold them, of course…). The first time I realized we had more than a transaction between us was heartbreaking. A husband and wife came in to check out the 2SS Camaro. We had one on the showroom floor, so I opened it up to let them check it out. The man had a very difficult time getting into the Camaro. He had back issues and his wife has knee problems. They really had to struggle to get in. Once they had extricated themselves from the car, I told them about the Chevy SS four-door sports sedan, made in Australia. I showed it to them. They found it much easier to get into and out of. However, they had dreamed of the Camaro for years. I helped them configure one and they placed a factory order with me. I kept them apprised of their Camaro’s progress and texted them a photo of it as soon as it arrived. They were so happy and we all took pictures of each other around the car. When they stopped in to get their car serviced, they always came by my desk to say hi. Then one day, I saw on Facebook that the woman had passed away the night before. It felt like I had been stabbed, in the heart. That moment was when I knew I was making friends, not clients. Since then, I have made many friends here. We’ve gone out together. We’ve connected on Facebook, Twitter, Linked-In, etc. In fact, I recently sold the third vehicle to a couple of friends and we were all hugging, as we parted.
I love doing business this way.
Here are a few of my favorite customer comment cards my dealership has received, regarding my clients’ experiences with me:
This one made my day (as you can well imagine):
This one caught my manager’s eye, so he called me into his office to show it to me. She has also generated two other Volt sales for me, in her family:
I think I’d change your first point to most or all. And the reason is the simple abundance of incentives, deals, sales, and other stuff that get sprinkled onto every deal. Nobody walks onto the lot expecting to actually pay the number on the window of the car. They 100% assume that the salesperson is going to offer something in the way of a discount to get you to buy. And that expectation, so often fulfilled, leads to the wondering of what other specials one might wring out of the deal with sufficient persistence and haggling. Car salespeople are just not perceived as overly trustworthy and there’s a long history under girding that perception. So until that perception goes away (if it ever does) or dealers and manufacturers really firmly make the price in the window the price paid, this is going to persist. If anyone is haggling (or perceived as such) then everyone will be expected to do so too by the customer.
To your point on contracts, I’ll say this. They aren’t exactly the most readable and easily comprehensible documents in the world. So I suspect the Average Joe probably doesn’t really comprehend all the terms and numbers and such. So their understanding, if any, is coming entirely from whatever interpretation and spin the sales and finance folks at the dealership give them. If that interpretation is flawed or misleading, so too will their understanding be.
You are singing to the choir, Skipper. As I mentioned, I always felt ripped off, when buying a car. Due to this, I share the incentive screen, on my computer, with the customer. I have a reputation as a “buyer’s advocate,” where I work. To some salespeople, this is a term expressing naiveté or possibly foolishness. I willingly accept that as a badge of honor, working diligently to exceed plug-in sales quotas from the manufacturer, to make up for lower revenues for the dealership with possible dealer incentives, of which I never see a penny.
I am not a saint. My motive is saving the planet. I truly believe the planet is being damaged by vehicle emissions. The health and well-being of my children and grandchildren are my motivation. Unfortunately, as transparent as I try to be, I still lose sales to dealers who are dumping their plug-in vehicles, rather than learn how to sell them. They’ll sell below cost and mark it up as a learning experience, only ordering the bare minimum of these wonderful vehicles, required by their respective manufacturers.
Thanks for your comment.