Yesterday I bought a new car for the first time in years. Twenty-four hours later, I still sit incredulous to the fact that the traditional automotive sales model is going to lose. It must! Their definition and approach to transparency is simply meant to lure you in - and erodes trust at every touchpoint.
To start, I’ve been studying for weeks. My 2011 Jeep Grand Cherokee was on its last leg. As a matter of fact, it was smoking on the way to this dealership. I’m like Norm from Cheers at my mechanic...there so often, everyone knows my name. It was time.
I knew what I wanted, knew everything I had to know (or so I thought), and was ready. Yesterday afternoon at 1:50pm I walked in to the dealership. I walked out with a new car at 5:10pm. What happened in the middle was quite an adventure.
I wasn’t desperate. I had searched inventory for multiple dealerships, and had seven cars picked out. Three were from this specific dealership. I knew what I was willing to pay for each one, depending on how I felt about the cars after seeing & driving them.
My favorite car (and the one I ended up with) out of the three from this dealership had the following details listed out online. These are important, as all three turned out to be bullsh*t:
- The online price included a “dealer discount” of $8,642. Almost 20%!
- There were two “special offers” listed. The first was called a “Best Cash Offer: Up to $2,500 cash back”. The second was a 0% APR for 62 months.
- It was a “new” 2018 - with 14 miles on it.
Can I just say, I loved the salesperson. We’ll call him “Frank”. Young guy, really sharp, knew the cars up-and-down, articulate, but could stand to take it easy on the cologne. Transparency begets transparency - so by the end of the afternoon, I had his life story - about his father, his ADHD diagnosis, his love of numbers and finance, his personal finances / debt, and his comp model.
Every day, LinkedIn is littered with great guidance, tips and recommendations for sellers to take advantage of and learn from. Unfortunately, it falls on deaf ears in the automotive industry. In doing my homework, this dealership has nine salespeople - with their names listed alongside their pictures on the dealer website. How many of the nine salespeople from this dealership are on LinkedIn? Zero.
With the concept that “transparency begets transparency” mentioned above coupled with not being desperate, I decided to try my hand at being a transparent buyer. There were three things I decided to do that are typically frowned upon:
- I told them I had a trade-in right out of the gate. I had done my homework and knew how much my car was worth.
- I was transparent about the problems with said trade-in. There was a fuel injector issue causing the smoke - and I was scheduled to get it fixed on Friday. And, my side view mirror housing was cracked. I figured they wouldn’t be able to play the “this car needs a lot of work” card if I led with its flaws.
- I told them I was planning to pay cash.
Ready? Here goes…
“The online price included a “dealer discount” of $8,642. Almost 20%!”
Frank: “Are you military?”
Me: “No. I’m weak like a kitten.”
Frank: “Ha! Ok...are you a first responder?”
Me: “Uh, no. More like a third or fourth responder.”
Frank: “Are you a recent college graduate?”
Me: “Is 26 years considered recent?”
Frank: “No. So, you don’t meet any of the criteria for the dealer discount.”
Me: “So, I would have to hit all three of those as “yes” to get the full $8,642?”
Me: “Have you ever had someone walk in here to buy this type of car who’s an ex-military first responder recent graduate?”
Me: “In other words, your dealership advertises a price that nobody has ever qualified for. Not very transparent.”
Frank then leaves his office (where I’m sitting) for an extended period of time. He comes back with a piece of paper listing out the price, including line items for taxes, the trade in for my Jeep, some add on “chemical treatment” package for $2,500, etc. We’re $5,000 off from where I’m willing to be.
Me: “What’s this chemical package thing? I’m pretty confident I don’t want that.”
Frank gets up and leaves for ten minutes. He then comes back, and the chemical treatment is stripped out on his newly printed piece of paper. We review it again.
Me: “The trade in value for my Jeep is off by $1,500 given the work that needs to be done. I know you determine it based on auction value and not KBB, but you’re low here.”
Frank gets up.
Me: “Where do you keep going? Sit down. Let’s go through this entire thing, then you can leave.”
Frank looks at me almost powerlessly.
Me: “Are you empowered to make any decisions?” (I asked in a friendly, not attacking way).
Frank: “No...not really.”
Suddenly the manager comes in. It was like he was listening. And he knew exactly what my arguments were. This leave-and-come-back thing is clearly a game.
I proceed to hammer the manager. You can just tell when someone is totally full of sh*t, right? This guy oozed it.
Manager: “Well, your trade is is worth $7,000 because of the work that needs to be done.”
Me: “Ok. When the work is done, it’s worth probably around $9,500 - $10,000, right?”
(Manager nods - non committal)
Me: “I have an appointment to get it fixed on Friday. Should only cost me about $800. Then, maybe I’ll come back in the next week or two and we’ll start this whole process over again, and I’ll be up around $2,000 over where we are now. I’m not exactly sure when I can get back here, but I’ll let you know.” (I then grab my papers as though I’m done.)
Manager: “How about $8,500?”
It gets worse.
There were two “special offers” listed. The first was called a “Best Cash Offer: Up to $2,500 cash back”. The second was a 0% APR for 62 months.
Me: “Where is this ‘Best Cash Offer' in this quote. (I showed him the print out from their website) ‘Up to $2,500 cash back’. I’m paying cash.”
Manager: “That is if you finance.”
Me: “Hmmm, so “Cash” means something else here, eh? Ok, how about I finance the car, and then pay it off tomorrow. Then I’ll earn an additional $2,500, right? I have the time.”
Manager: “No, the price we’ve quoted you has $2,500 taken off because you’re paying cash. It just doesn’t say it. If you decide to finance, we’ll add $2,500 to the price of the car, then give you $2,500 cash back.”
Me: “What?!? So, this is 100% a scam?”
Manager: "No, your quote just doesn't show that discount."
So it's a scam. Seriously. That happened. He said they add $2,500 to the price to provide a client a $2,500 cash back incentive. Amazing!
We finally get to an agreed upon price - where I need to be. I go sit in the “finance” area for the next half-hour….just waiting. Deal is done, it’s now just about signing everything.
Frank comes by.
Me: “How much commission will you make on this deal?”
Frank: “For this one, $100.”
Me: “$100? Are you serious?”
Frank: “Yes, it’s based on profit margin, $100 minimum payout if there’s little or no profit.”
Me: “Frank, you need to call me when you’re ready to leave this place. The demand for strong sellers is so much higher than the supply right now. You’ve got the raw skills and talent to be a great seller - this environment is going to crush you.”
As you might imagine, while Frank gave me the full rundown on the car out in the lot as I was leaving, he then asked for my mobile number so he could call me about sales jobs.
But before that interaction, one more atrocity.
It was a “new” 2018 - with 14 miles on it.
As I mentioned above, the print out showed that this particular car had 14 miles on it. While sitting in the finance office signing the paperwork, one form was a disclosure, indicating my understanding that this car had 1,600 miles on it.
Me: “Wait, this car has 1,600 miles on it? That’s not what it said online. That’s not what I based my pricing off of.”
Finance guy: “You test drove it, right?”
Me: “Yes, but I didn’t check the odometer. Didn’t even cross my mind.”
I then got up and went to find the manager and Frank.
Me: “As I’m signing the paperwork, this disclosure says the car has 1,600 miles on it. I was under the impression it had 14. What gives?”
Manager: “You test drove it, right?
Me: “Are you serious? I figured you had to have at least one thing right on this print out. I figured wrong. You’re selling me a used car for a new car price. I know I’ve been here for over two hours, but this broke me.”
Manager: “I’ll take another $900 off.”
I’m not sure I made the right decision at this point, but I said yes. The finance guy was angry. He proclaimed, “The car has never been titled, so it’s new!”. I snapped back, “To what point can you make that argument? If the car had 20,000 miles on it but had never been titled, is it still new?”
He grumbled as he redid all of the paperwork again. I went into “Dad” mode, and explained to him how they need to prepare for a new world of buying and selling, that they are way behind, and how everything on their website is essentially a lie.
Finance guy: “It’s not up to us as a franchise. It’s handed down from the manufacturer. We have to display per their guidelines.”
Ugh. Ford...your future isn’t bright.
He then handed me the disclosure indicating that I rejected the extended warranty.
Me: “I hadn’t even seen this yet.”
Finance guy: “I know. Figured there was no way you were going to sign up for it, so we didn’t bother.”
Ha! Finally a good decision.
If this isn't obvious to you by now, the car purchasing process continues to be an absolute goat rodeo, chock full of lies, friction and deceit. Tesla has already started the trend. The first major manufacturer to act like a 2019 retailer versus a 1985 door-to-door seller will have a distinct advantage.
Transparency wins - and in this space, the first one to embrace it will be the victor.