Friday, September 14, 2007

When a Car Dealer Crosses the Line II

This is a follow-up on my last column which exposed a direct mail scam by a local car dealer. After the General Manager of this dealership mailed this letter out a short time ago, some recipients sent me copies. They either recognized that it was phony or they wanted my opinion. I did some research which proved that the claims this General Manager was making were false and discussed this in my last column.

After I wrote my last column, a customer sent me another letter he received from a different General Manager of a different car dealership which was the exact same letter as the first dealership mailed out. For clarification, I will repeat the text of both, identical letters below:

Dear ______,

You are receiving this letter because I have some very timely and important information about your vehicle. As General Manager of [Name of Dealership], I am making a personal appeal to purchase your vehicle. Because of a unique wholesale market condition, I have allocated additional funds and I am now in the position of being able to offer you over book value for your vehicle—whether you trade it in or I purchase it outright. My dilemma simply means that right now your vehicle is worth more than it was last month. Here’s why:

Normally, we purchase over 200 pre-owned vehicles per month at nationally recognized automotive auctions. Unfortunately, flood damaged Katrina vehicles (see enclosed article) are currently showing up at these auctions. I simply will not allow my auction buyers to risk our reputation by inadvertently purchasing one of these units and reselling it to one of our customers. Therefore, I have put a moratorium on any auction purchases until I am confident flood damaged vehicles are properly disclosed to our wholesale buyers.

This is a straight forward, genuine appeal to purchase your vehicle. I need local vehicles with local histories—vehicles with a pedigree so to speak. As always, [Name of Dealership] will pay off your trade balance as part of any final retail transaction. My purchase offer is in addition to all [Name of make of car] incentives, should you decide to maximize your market timing. But hurry, my appraisers have from now until the close of business, 6:00PM [Date] to extend thee purchase offers. Call me at [Dealership number] to receive a no obligation, written trade or purchase estimate.

Sincerely,

[Signature of General Manager]

As I said this exact letter was mailed out by two dealerships within 10 miles of each other. One was a Ford dealership and one was a Toyota dealership. One is owned by a public corporation and one is owned by a local person. There is no affiliation between the two. Obviously this direct mail scam is being sold to car dealers by some unscrupulous marketing company. Neither of these dealerships sells even close to 200 used cars a month and there would be no reason in the world for them to purchase “over 200 pre-owned vehicles per month at nationally recognized automotive auctions”. There are very likely lots of other dealerships sending out this same letter. If you receive the letter above, throw it in the trash. It is absolutely and shamelessly false.

Letters of this nature are peddled to dealers with promises of how many “suckers” they will bring into the dealers’ showrooms. Oftentimes they have a guarantee of a certain minimum percentage…3% would be a very effective mailer. The direct mail marketing company would guarantee that if the 10,000 mailers didn’t bring in at least 300 potential victims, they would run another promotion free. Dealers usually count on selling about one out of every five prospects, which means that this mailer could result in about 60 sales resulting from this lie.
You may ask how car dealers get away with something like this. The answer is that direct mail usually falls beneath the “radar” of the regulators. When you consider all of the deceptive advertising out there, the regulators have a hard enough time keeping the TV, radio, and newspaper advertising clean, advertising that is very visible to all. Only the unfortunate addressees usually see the direct mail advertising. My advice to you is to ignore all direct mail advertising unless you have personal knowledge of the integrity of the company

4 comments:

  1. I don't think there is anything wrong with someone trying to market to their past customers. I understand that the letter maybe in question because it says they are trying to buy cars for stock, but in reality I think a car dealer would rather buy a car with some knowledge of history and would rather sell an old customer. I am not sure why they are using Katrina, but at the same time what is wrong with marketing. All business's do it, furniture, electronic's, etc. And they are all creating b.s. sales, but we continue as consumers to look for a reason to spend our hard earned dollars. Sounds like this marketing company has come up with a good sales promotion. And what the hell if I want a car and I go in because of this letter and find what I want, what the heck is wrong with that. You need to understand how the real world works and look at all businesses. Because they all do it, it is not just car dealers. I have seen it all in the jewelery business. We make thousands on a ring, and you can buy a car for a couple hundred dollars over a dealers cost and they are going out of business yearly. We make more on one ring than a car dealer makes on 20 cars. Sounds like car dealers need to close their doors and open furniture stores, jewelry stores and electronic stores. They would be much better off, or maybe you need to look at the real world and realize that people are going to be marketed to daily and we are rocking while car dealers are becoming extinct. Keep up the good work, you are driving more consumers to the mall and we are doing great. Thank you, thank you so much, as you are clueless.

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  2. Dear "Jewelry King",

    I love your posting! You are a Dinasaur and an amoral retailer. You are a "Dinasaur" because you are extinct and just don't know it. You are amoral because you don't feel guilty about lying to your customers to sell more jewelry.

    Most people reading this will be as astounded as I that you see nothing wrong with a car dealer mailing a letter to prospective buyers that is full of lies. In fact, the car dealer did not even write the letter, she bought it from a direct mail scam company. Your Dinasaur belief is that anything is fair to "get 'em in the door" and after that it's caveat emptor [let the buyer beware]. Is that the way you sell those rings that you make more money on than I make on "20 cars".

    I read in the PB Post today that Zale's Jewelers just declared bankruptcy. I hope you don't work for them, but a lot of Jewelry stores these days are having to reinvent themselves. I know you've heard of Blue Nile, the immensely successful Internet Jewelry store. They tell it like it is and sell Jewelry for a fair markup, not many thousands of dollars as you brag about in your posting. By the way, how was business this Christmas season? Blue Nile set a sales record.

    By the way, for readers of this posting who may be thinking of buying a ring at the mall jewelry store...click on www.bluenile.com. You won't pay the Blue Nile a profit "20 times more than I make on one Toyota". :)

    I love your comment "people are going to be marketed to daily and we are rocking while car dealers are becoming extinct". In your prehistoric, amoral mind you really believe that the words "market" and "lie" are synonymous. The only car dealers that will become extinct are the ones that think like you do.

    The next time I'm at the mall and walk by the jewelry stores, I will look inside and wonder if "that salesman" is the dinasaur.

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  3. How about a "No Dealer Fee" scam?
    You look at the bottom line number on the buyers guide and there it is.. Additional profit that makes the numbers of a Dealer "showing the dealer fee" and a "no dealer fee" advertisement "JUST THE SAME"!!!! Is that a scam?
    When did the bottom line number is not important or what matters?

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  4. naniluvs1@aol.comNovember 19, 2009 1:53 PM

    DID I BUY A KATRINA SUV AND DIDN'T KNOW IT??
    I bought a 2004 Mitsubishi Endeavor in 2007 in the Atlanta metro area and just the other day I was looking through the handbook that comes with the car. Yes I did this when I first bought the car but back then I did not notice a little pocket that held a few folded up pieces of papers.
    Okay the moral of this story is..when I 1st got the car it was spic and span clean inside and out, expect the seats looked a bit ruddy and the under side of the car looked like it had been in mud..the inside of the tires and all of the metal under the truck looked like it was rusted but it wasn't rust it was dried caked on dirt..the parts that should have been black were/are a bland tanish color..I took this as..since it's an SUV the previous owners must have been out camping or in the wilderness...The car did come with a recent Carfax report but I still called my brother who is a car salesman in Orlando and gave him the VIN#. He ran it and said it came back clean.
    Now this is the deal..the pieces of papers I just now discovered show that this SUV came out of damn Louisiana!! Yes right about the time that Katrina showed her wild ways.
    In the time I've had this car I did over time notice other areas of it with dried mud/dirt..while replacing a back break light there was dried mud inside the light casing,under the spare tire, around the window rubbers..
    IS THERE ANY THING I CAN DO ABOUT THIS..all of the paper work I found came out of Louisiana and even Mississippi..I heard a while back that some Carfax reports were falsified..WHAT SHOULD I DO, IF I CAN OR IS IT JUST MY LOSS??
    PLEASE ADVISE

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