 Secrecy
at heart of car-sales animosity
|
Last week's column about the attitude that some car salespeople have toward their customers -- that buyers are liars because they don't honestly reveal what they're able to pay for a car, what the true condition of their trade-in is, etc. -- generated a lot of reaction from Bankrate readers.
Some of it was from salespeople defending themselves
and their craft, but the overwhelming tide was from people upset with their treatment
in the car-buying process. Typical of the former was this
e-mail from Matt: Buyers are liars???? Would you entertain
the idea that the car salesperson's selling strategy is not aligned with the modern
consumer's buying strategy? Your article addresses an important topic, however:
Like most media we see and hear today, it appears geared to elicit an immediate,
emotional reaction, and not appeal to the development of a rational thought process
necessary to manage the emotions behind a substantial decision. Please write an
article that addresses the development (education) of fiscal responsibility in
a capitalist economy as it may pertain to the automobile market. As the consumer
becomes more educated, more in a hurry, more demanding, and less forgiving, they
deserve more informative media. Matt raises an interesting
issue and, as any regular reader of Bankrate and the myriad other car-based Web
sites knows, there's a wealth of rational, consumer-oriented information.
What's at the root of the adversarial car-buying process is that it's the second
largest purchase most people will ever make, yet it's a transaction that's largely
shrouded in secrecy. When someone buys a house, he or she
knows from the start what comparable houses in the market have sold for because
that information is public. But two identical cars sold to two different buyers
will carry price tags of significantly different amounts. Studies done by Harvard
and other institutions have consistently shown that women and minorities have
less of a chance to get the lowest price than Caucasian men.
This is the way the marketplace has been since the Model T, and efforts at such
things as no-haggle pricing have largely been fads that have faded in part because
Dealer A will always try to lure sales from Dealer B, and in part because many
buyers want to try to bargain a better deal. Revealing that
salespeople think "buyers are liars'' is simply another piece of the puzzle
that consumers need to know. Salespeople, who close hundreds of deals a year,
have a distinct advantage over a buyer who purchases one car every five years.
Salespeople may be nice, courteous and knowledgeable, but when it comes to negotiating,
they are not friends of the consumer. The mood of car salespeople
who think buyers are liars is fueled by the increasing awareness of consumers
who go into a dealership forewarned and forearmed with facts.
While we can hope that rational, above-board pricing and selling of vehicles will
one day prevail, it's largely just a wish. Here's a view from,
Mike, a recent car buyer: I was disgusted with the story
of the car salespeople accusing the buyers of being dishonest. My
wife wanted a new car but I had to work, so I had her go in and take a look around. She
found this used SUV that she had to have, so I told her to write down the VIN
of the vehicle so I could run a Carfax report on it. I
typed the VIN in on Yahoo search and lo and behold a picture of the SUV came up
and how much it was and where it was being sold. It showed the price as $13,500. The
next day we go in and talk to a salesmen who showed my wife the car and he has
all the loan paperwork drawn up. I ask him for his best price on this vehicle.
'I had to fight to get this deal for you -- $16,500,' he says with a smile. I
said, 'Really? That's the best deal you can give me? Then why are you advertising
it on the Internet for $13,500?' He looked like he
saw a ghost at first but then stood up and says, 'Thank you, thank you, we've
been having these kinds of problems and we'll get this straightened out!' He leaves
but a few minutes later comes back with the exact printout I had, but with the
price showing as $16,500. This fool changed it while I was waiting at his desk.
So I said, 'That's fine. I'm going to go home and
get the copy that I printed.'He had a weird look on his face, and said he would
be right back. He brings another guy in to talk to
me, who eventually says he'll give it to me for $13,500. When he tells me
my payments will be $450 a month I get up to leave. He then asks me. 'How much
can you afford?' I tell him, 'Not a dollar over $350.' Then
he tells me, 'Now, Mike, look I got a kid on the way, I'm making less than $100
on this deal.' Eventually we reach a deal at just over $13,000. It
sickens me that they could have got somebody fooled into paying $3,500 more than
that SUV was worth. And they say buyers are liars?
 |
| This week | |
| |
If you have a question for Terry, e-mail him at Driving
for Dollars. | 
