Thursday, December 28, 2006

Never Go Car Shopping Alone

A woman wrote me a letter this week in response to one of my columns. Her husband had recently passed away and this was the first car she had bought on her own. The dealer did not have the model car with the accessories she wanted and was unable to locate one at another dealership. She did not want to make a decision without seeing the actual car she wanted to buy but the salesman and manger talked her into signing a buyer’s order, assuring her that she was under no obligation to buy. They also included two accessories that she did not want because “the manufacturer required it”. I’ve heard of distributors ordering cars with certain accessories from the manufacturer which essentially makes them “standard”, but never “ $250 floor mats” which was one of the accessories she mentioned. I get a lot of emails, phone calls, and letters from people who made a bad deal in their car purchase and want to know how they can get out of it. This is actually one of the less egregious, but I chose it because it was a simpler and shorter example.

There is strength in numbers when shopping and negotiating to buy a car. In fact, this applies to any serious decision in life. You might be the sharpest, shrewdest negotiator on the block, but your odds of striking a better deal and not get taken advantage of are enhanced when you have others on your side. Personally, I make a habit of always having at least one partner when I am engaged in a serious, adversarial decision making process. When meeting with those on the other side, I make it a point to arrive with at least as many people as they have present. One reason is the psychological factor. When you are in an office by yourself with 2 or 3 others, it can be intimidating. Another reason is that you always have people on your side to corroborate what was said. If a salesman or a sales manager makes a verbal promise that can be corroborated by a friend or two, it is far less likely to be broken. It will also hold up in court, if it has to come to that. Of course, the better solution is to see that all promises are committed to writing.

Buying a car, especially a new car is more often than not, an emotional decision. Having a friend or two with can help you make more of an analytical, logical decision. Another point of view is always useful when making an important decision. Also, having one or two friends with you slows down the process to a level more easily absorbed and understood by you. A friend will often think of a question you should have asked but forgot.

Ideally you should bring someone with you who is skilled in negotiation and experienced in buying cars. However, if you don’t know someone like that, somebody is better than nobody.

By the way, most car dealers are unhappy when prospective customers bring in advisors and friends. Naturally they feel that way because they recognize their chances of making a fast, very profitable sale are diminished.

2 comments:

  1. Hi Earl, you are wrong! I am a sales manager at a car dealership, and by no means am I intimidated by more parties in a car purchase. To my belief, it is usually people that are financially inept, or uneducated that pay cash for a car, no matter how much your portfolio reflects as your total net worth. Also, I found that the particular indviduals that do not purchase extended warranties on their vehicles, are the same individuals that are in the service department years later, trying to negotiate the cost of the repair. I think, Earl, you should help people understand that the cost of one repair these days, especially on one of these new cars, could be the cost of the service contract. And by the way, the "profit center" Earl, is no longer sales finance, its parts and service! You should do a little more research, this is not 1990.

    ReplyDelete
  2. Dear "no way",

    Thanks for your candid comments, especially divulging that you are a sales manager for car dealer.

    I don't think I said that salesmen or managers were intimidated by car buyers who had advisors to accompany them and I'm glad that doesn't intimidate you. I simply said that it's a good idea for the buyer to bring along one or two friends for the reasons I stated.

    I really don't know how to respond to your comment, “it is usually people that are financially inept, or uneducated that pay cash for a car". In case you haven't heard, excessive debt is what brought this country into this biggest financial crisis since the Great Depression. I'm guessing that Master Card and Visa are both very fond of you. I believe that dumb, financially inept people don’t have the money to pay cash for a car. I have a lot of respect for my customers who can do this.

    As far as extended warranties are concerned, I don't recommend that people not buy them, I simply tell them to be careful. Some are overpriced and buyers are often not sure what is not covered. Sales people (I'm sure you have never done this) will often tell customers that this extended warranty is "bumper to bumper" which is always a lie.

    Finally, since you are the sales manager and not the service manager, I'm not sure how you are so knowledgeable about how much money service departments are making. But as a dealer, I can tell you that this Great Recession has put a hurting on both sales and service and service departments are definitely not "the profit center". To make a reasonable profit these days a dealership must be profitable in all departments.

    ReplyDelete

Earl Stewart On Cars welcomes comments from everyone - supporters and critics alike. We'd like to keep the language and content "PG Rated" so please refrain from vulgarity and inappropriate language. We will delete any comment that violates these guidelines. Oh yeah - one more thing: no commercials! Other than that, comment-away!