Why it Seems Like Some Car Dealers Get Away With Whatever They Want

[Fasglas]

Everybody's pals. Sold & Rolled...
Why it Seems Like Some Car Dealers Get Away With Whatever They Want

Why don't automakers shut down shady dealers that engage in dubious practices? Oftentimes, it's because they're powerless to do so.

Have I mentioned lately that I used to work for BMW, Infiniti, and Ford? No? Well, that's because I never did. Instead, I worked for BMW, Ford, and Infiniti*dealerships. (And in the case of BMW and Ford, I've also worked for their captive finance companies.)

Here in the United States, a BMW dealership is no closer to being an actual part of BMW AG, or even BMW North America, than your local McDonald's. That's not just true for BMW; it's true for every automaker with a serious presence in this country. The dealers are entirely independent operations whose interactions with the automakers are largely governed by a patchwork of laws that vary widely from state to state, and, for reasons it doesn't bear discussing here, almost universally favor the dealers' interest over that of the manufacturers.

You would be amazed by the things the automakers cannot stop the dealers from doing. I'm not talking just minor stuff, like pinstriping cars and gold-plating the logos and*putting TruCoat on every Oldsmobile Cutlass Ciera. Nearly 30 years ago, a Ford dealer ordered a whole bunch of Escort sedans, took the Escort badges off 'em, and put "Taurus II" stickers in their place. Then he advertised the "Taurus II" for $9,999 or something like that. Do you think Ford liked that? But in the end it was the Ohio Attorney General who stopped the practice by sending a fairly intimidating letter.

You see, many of the dealers in this country got their franchises back when it was done on little more than a handshake. A lot of VW stores, for example, were just local mechanics' garages that accepted a few Beetles from Max Hoffman after World War II. There are Ford dealers out there that sold Model Ts. While the modern franchise agreements for new brands like Lexus have language to cover everything from interior decoration to whether or not you can put used cars up front where the drive-by customers can see them, there is pretty much no way to impose serious restrictions on dealers "grandfathered" in by ancient contracts. The most the manufacturers can do is withhold bonus money and certain incentives from dealers who fail to uphold modern standards of customer satisfaction.

The problem there, as any student of economics can tell you, is that the juice has to be worth the squeeze. If I run a dealership that stands to lose $1500 per car in customer-satisfaction incentives, I can freely ignore those incentives as long as I can make more money per sale doing whatever the heck I want.

Which leads me to a conversation I just had with an*R&T*reader about his purchase of a new Mazda MX-5 RF. He's thrilled with the car, even if*our own Travis Okulski doesn't like it as much as the soft-top version. This reader doesn't worry about what Travis thinks. But he*does*worry about how the actions of his dealership affected him and other potential customers for Mazda's transcendental little sports car. I'll let him take it from here:

What's Wrong With the Miata RF

A few weeks ago, I bought a spanking-new, Ceramic Metallic Mazda MX-5 RF Grand Touring. Like virtually every other car-buying experience in my life, there were moments when I contemplated running screaming from the dealership.

In our exchange of emails leading up to preparing the car for me, the salesperson asked if I wanted something called Armor All SmartShield for $797, which he described as an extra clear coat to provide additional protection as well as something on the interior to prevent stains. Before I said no, I looked into it as much as was reasonable but what I found wasn’t promising (to be fair, I’m sure whatever would be applied would be a coating, and it would probably be clear, but that doesn’t make it a clear coat; the distinction is more than semantic). It turns out Armor All doesn’t even make it, they merely license their brand. I said no thanks.

At the visit to the dealership to finish the paper work, hand over the bank check and pick up the car, the salesman asked one more time if I wanted the SmartShield, and again I told him no thank you. The final piece of paper for me to sign was some form that stated that I would fork over the remaining balance after my deposit—I was now truly committed. And then, after my commitment to purchase the car was thoroughly and legally declared, was I introduced to a second salesmen who was there to "finish the process." He asked me to follow him into another office, and once inside, he closed the door.

The first thing he said to me was, "the state of XXXX requires the dealership to disclose what I’m about to discuss with you." First he told me, "I don’t know if you’re aware of this, but your new car has 160 computers in it" (??) and suggested than if any of them failed, the performance of the car would at the very least be compromised. Then he told me that Mazda recently switched to a water-based paint and no one knows how well it will hold up over time. He went on to explain that Edmunds estimates that in the first five-year period the new car will be out of warranty, the costs of incidental damages will be approximately $6000—all from things like door dings, nicks, and other damages. The dealership’s "solution" was to sell me a policy for $1500 that would address all of this, but I had to make the decision right now—this was my only opportunity.

THE JUICE HAS TO BE WORTH THE SQUEEZE.

I thought I’d heard enough. He was trying to get me to volunteer to pay more for the car so I would have some form of policy that would cover my all-but-inevitable expensive future problems once my car was out of warranty. When I told him, flatly, I wasn’t interested, he then told me about how the wheels have thinner and thinner spokes now that the rims are larger in diameter and sometimes they just crack, and a new wheel for my MX-5 was $800. And if I lost a key? That was also $800. When I firmly said no to everything, he said, "so your plan is to self-insure?"

The sheer number of huge lies he told me was shocking, and I wanted to get up and leave, but then I remembered I signed that final piece of paper in the other room. I imagine most people would respond the same way I did, but at some point, I have to wonder... I have been through rough sales before but this was the absolute worst. It left a very bitter taste in my mouth about returning to that dealer for anything again, except I’m now convinced it’s an industry-wide practice, at least in the US.

The good news is that not every dealer operates that way. I know plenty of people who have outstanding dealership experiences buying a new MX-5. My brother bought a CX-7 and an RX-8 from the same dealer in Lexington, Kentucky and he will sing that dealer's praises to anybody who will listen. There really*are*good dealers out there.

The problem is that even a good dealer can serve up a bad experience. So it helps to know your rights before you walk into the showroom to close your deal. (You know better than to buy a car on your first visit to a dealer, right? Of course you do.) Pretty much every state has a specific department of the Attorney General's office to deal with car dealers, because problems with dealers make up a major part of their case load. You can always call and ask for a brief primer on your rights, which they will be very happy to provide.

Most states, however, enforce the same group of basic rights for their citizens, and the most important one is this:*You're not sold until you roll. Until the moment that you drive off the dealership property in your new car, you can change your mind and walk away. There's almost no such thing as a non-refundable deposit, particularly if you aren't ordering a car from the factory. If you don't like what happens in the F&I office after you sign the sales order, you should get up and walk away.

There are exceptions to the above, which is why it pays to call your state AG. But it is very rare for a dealership to successfully enforce anything before you leave the lot. So don't feel trapped and don't fall for the hard sell.

There's an unfortunate corollary to the above: In most states, once you drive off the lot you are fully committed to the purchase. Don't believe any salesman who tells you that you have "three days to see if you like it." That's the oldest lie in the books and in most states, if this is even a law on the books, it only applies to solicitations at your home. If you can get a dealer to bring the car to your house and have you sign papers there, you might get 72 hours of buyer's remorse time. But if you bought the car at the dealer and drove it away, you are "sold and rolled."

Believe me, the manufacturers don't like the games the dealers play any more than you do. But once you're on the dealer's lot, the rules of engagement are defined by the laws of your state, not by what the automaker would like to see happen. It's a shame, but that's the way it is. So the next time you buy a car, know your rights ahead of time and be prepared to walk away. Someday, it might be legal to buy a car directly from the manufacturer, but in the meantime, we all have to deal with the dealers.

[Bill]

That's horrific. I bought a Chevy this year and had a very pleasant experience. Car listed on Autotrader, so I called, "negotiated" that I would buy and drive for the price listed + tt&l....no pack, no mop-n-glo, no surprises. Went in, deal went exactly as agreed on phone, wrote check. The only add on the F&I guy tried was some sort of tire warranty. We stuck to the original price and that was that. They seemed very concerned about GM getting a good customer review.

I had previously bought a truck from a now out of business dealer at the same location that did the whole "back and forth to the sales tower" game, even though I was buying an "ad unit." Got packed and had very unpleasant experience.

[Hoog]

I once asked the backroom guy what was the fastest he'd ever gone through the spiel. Then I looked at the "visual aide" desk mat and said, "decline, decline, decline...where do I sign?"

He said, "This might be it!", and laughed. He checked off each of the boxes, I initialed and on we went. Took maybe 2 minutes including him getting me a bottle of water.

[C5SilverBullet]

Bunch of thieves.

[m and t's77]

Just because they mess around with a customer doesn't mean you can't give it right back.
When I went looking for my new truck I cruised the dealer lot after hours until I found what I wanted.Returned to the dealer on a Sunday near closing hours and by the time the road test was done it was just about closing time but no dealer will ever shoo you out the door if they are trying to make a sale.
We couldn't reach a happy medium and got up and actually was in our car when the sales weasel ran out to us and asked exactly what would work.Told her to drop the payment and up the yearly mileage and we would sign,leasing the truck btw.

[thecornerman]

You all already know that's where they make their money, some are better than others to talk you into whenever.

Like sex just say no, no &no

No different then the instant oil Change
EVERYTHING they sell you is inferior

I worked at 4 different dealerships and stayed far away from the showroom

[VatorMan]

I haven't bought a car in a showroom in 18 years. Even in 1999 I bought my Silverado over the internet. The quickest way to get rid of any lot lizard is tell them you are there to see the guy in internet sales.

[Millenium Vette]

Originally Posted by VatorMan

I haven't bought a car in a showroom in 18 years. Even in 1999 I bought my Silverado over the internet. The quickest way to get rid of any lot lizard is tell them you are there to see the guy in internet sales.

Psst: The "internet sales guy" is just another lot lizard who happens to up you differently.

[Millenium Vette]

Originally Posted by Fasglas

Believe me, the manufacturers don't like the games the dealers play any more than you do.

It isn't only the games that manufacturers dislike, they dislike everything about dealers. One thing that will never change, the manufacturer will never be any good at retail selling. They have no idea how a car deal works in the real world.

For those that dislike the whole selling routine, I don't blame you, it often isn't any fun. I will tell you a little secret of how to make it easy:

1. Pay what is listed as the price on the window sticker. You avoid the unpleasant haggling part.
2. Don't bring in a trade. No trade, no worries over what they are going to give you for it.
3. Pay cash. Then you don't have to worry about how great the terms are. Plus, they can't sell you death & disability insurance so you don't need to hear that pitch. The F&I guy will also likely go easy on the other shit they sell. They usually figure if you are writing a check for it, you are not the average buyer and will treat you with some respect.

[DAB]

it would please, and shock me, if they at least had their presentation more organized than scribbling on the back of a scrap piece of paper. and if they spent $2 to hand you a nice organizer for all your current and future papers instead of just folding the crap out of them and stuffing them in a small envelope.

[Millenium Vette]

Originally Posted by DAB

it would please, and shock me, if they at least had their presentation more organized than scribbling on the back of a scrap piece of paper. and if they spent $2 to hand you a nice organizer for all your current and future papers instead of just folding the crap out of them and stuffing them in a small envelope.

Dealers only scribble the numbers on the scrap piece of paper because for whatever reason, you sell more cars and make more money per car than with some pretty presentation.

The reason they sloppily fold and cram the papers in that shitty envelope is because they know that a very small percentage of buyers will ever take those papers out and read them. At that point the deal is done, the car is bought and the customer just wants to leave.

May not make much sense to you, but that is the real-world car biz.

[C5SilverBullet]

Originally Posted by DAB

it would please, and shock me, if they at least had their presentation more organized than scribbling on the back of a scrap piece of paper. and if they spent $2 to hand you a nice organizer for all your current and future papers instead of just folding the crap out of them and stuffing them in a small envelope.

We use DocuPad.

[Kerrmudgeon]

But don't the auto manufacturers have the ultimate power over the dealerships?
Just stop selling cars to them.

[MrPeabody]

I just walk in to the F&I office and say "Repeat after me. Zero on the back end."