Monday, April 14, 2008

TOP 10 WAYS TO GET SHAFTED BY A CAR DEALER

(1) Believe the newspaper and TV ads. It never ceases to amaze me how outrageous and unbelievable the car dealers’ claims are. Just when I think that they can’t get any worse, I see one that tops them all. Last month, one dealer was advertising in the newspaper and TV that if you bought one vehicle from him you got a second for nothing. The “facts and fine print” would reveal that the first vehicle was a very expensive one with a huge markup of over $6,000 and the second vehicle was only the “use” of one for two years... a lease. My father always said, “If it sounds too good to be true, it probably isn’t”. Astoundingly, the general manager of this dealership had the gall to say on TV, “This is not a gimmick”!
(2) Buy a car on impulse on the first day you start shopping. Can you believe that this is the way most people buy cars? It truly is. There is something about a new car that excites people and appeals to them on an emotional level. People let their feelings short circuit their logical thought processes. Overcome that emotion that tells you that you must drive home that shiny new car right now. Go home and think about it. Talk it over with your spouse and friends. Research the model of car you looked at and the price on the Internet. Always drive the car you chose before you sign any papers. You should take at least a week or two in the decision making process before you buy a car.
(3) Trade your old car in to the dealer you buy from without shopping its value. Most people have no idea what their trade-in is worth when they come in to buy a new car. They rely entirely on the appraisal by the selling dealer. The dealer can make it appear that he is giving you a lot of money for your trade by taking some of the high markup on the new car and showing it as part of the appraisal value. Check Kelly Blue Book (kbb.com) and Edumnds.com on the Internet. Get at least 3 bids from other dealers of the same make for your trade. Make the purchase of the new car and the sale of your trade two separate transactions. Remember that you do get a sales tax break by trading in your car to the dealer you buy from.
(4) Use the dealer’s financing without checking with your bank or credit union. Shop for the best price on your financing just like you shop for the best price on your trade-in and the best price on new your car.
(5) Believe this, “This low price is good today only”. This is one of the favorite ruses used by car sales people and dealers. In 99% of the cases, you can buy that car for the same or an even lower price later. The only time that you can’t is when factory incentives expire on a certain date, typically at the end of the month. If that is the claim, demand to see the written factory incentive by the manufacturer.
(6) Fall for this, “Make me a written offer with a deposit and I will submit it to my manager”. This is S.O.P at most car dealerships. This is to get you psychologically engaged in the buying process. Once you have signed a buyer’s order and written out a check, you will remain in the dealership for a while and are more likely to buy. The salesman knows that. Insist on getting their best price on the car you have selected. You should never make the first offer. Once you have their price, compare it with at least 3 other prices from other dealers on the same make and model.
(7) Follow this advice, “Take this new car home and see how you like it.” This is the famous “puppy dog” technique so named because once you take a puppy dog home overnight, who has the heart to return it the next day? You, your neighbors, and friends will see that shiny new car parked in your driveway. It sure looks good! How can you explain to anybody that you didn’t buy it?
(8) Agree to this, “I’ll buy the car if you can get my monthly payments below $___.__” Most of us tend to think in terms of our monthly budgets. We might feel that we can afford a new car as long as it costs us less than $350 per month, but there is a big difference between $350 per month for 36 months and $350 per month for 72 months. I recommend that you finance a car for no more than 42 months, preferably 36.
(9) Believe the salesman when he says, “You have my word on that.” Be absolutely sure that every promise or commitment made to you by your sales person is in writing and signed by a manager. That salesman may not work there when you have occasion to ask for that “free loaner car” that he promised you anytime you bring your car in for service.
(10) Fall for this, “All dealers charge a dealer fee and we can’t remove it from the invoice.” In fact, all dealers do not charge a dealer fee. I don’t. But unfortunately most do charge this “gotcha” ranging from $495 to $1,000. It is true that Florida law (which should prohibit dealer fees entirely) requires that the dealer fee appear on all invoices. If you charge just one customer a dealer fee, you must charge everybody. The state legislators, in their infinite wisdom, decided if a car dealer is going to take advantage of even one buyer, he must take advantage of all of the buyers….never discriminate. But the loophole in this stupid law is for you to demand that the dealer reduce the price of the car by the amount of the dealer fee, making it a wash.

11 comments:

  1. Hey Earl,

    Great post! I think it is awesome that have the guts to actually tell your prospective buyers to shop and to think it over. While I will certainly not try to turn a buyer into a shopper here in my store, I can always empathize with the customers who are just not ready to make such a big decision in just a couple hours. Good for you!

    Along the lines of advertising, one of my favorites: "once we make a deal, we will pay off your trade, no matter how much you owe!" This has got to be one of the best!!! It astounds me that we still insult our customers' intelligence like this.

    Keep up the good work, Earl. Let me know if I can help you in any way.

    Tim

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  2. Dear Tim [aka "a dealer's kid"],

    From one dealer's kid to another dealer's kid...thanks very much. Compliments from my peers mean a lot since I seldom get any. :)

    I'm always very encouraged to see intelligent, ethical thinking from the new generation of car dealers. My three sons buy into our way of doing business but few in my generation or your father's do. The hope for car dealerships to enter the 21st century along with most other retailers lies with you and your generation.

    Regarding the point of encouraging car shoppers at your dealership to shop other dealers, you may be suprised how this can work to your advantage. If you trust your customer, give him your best price, and treat him with courtesy and integrity, you'll be amazed how often she will, either not shop you at all, or shop you and return to you even if he finds a lower price elsewhere. She may not always pay you a higher price [although, I have some who actually did], but will give you the chance to meet their price.

    In a series of JD Power Surveys conducted by Toyota on all Toyota dealerships in the USA [metro areas], my dealership sold 90% of all shoppers who shopped one other Toyota store and 82% who shopped two or more Toyota stores. We ranked 2nd in the nation in closing ratio to Longo Toyota in Torrance Ca, the largest Toyota dealership in the World.

    Don't refuse to give your customers a price "unless they are ready to buy today", tell her that the price you quoted is good only today, or try other tactics to discourage them shopping your price. Give them the same advice you would a good friend or your mother about buying any product...shop and compare. Your trust will come back by them trustin you more than your competitors.

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  3. Mr. Stewart,

    Is it true that an oil change at your dealership is $39.99?

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  4. Dear Anonymous,

    My company's charge for an oil change depends on the amount of oil your particular car holds. Four cylinder models require less oil, than six or eight cylinder models.

    Most service departments and companies that change oil add an extra charge on the invoice when you pay at the cashier. My company does not, just as we don't charge a Dealer Fee. It comes under various names like "sundry supplies", "environmental impact fee", "miscellaneous". The name and amount vary from company to company, but as much as $10 can be added to the advertised price of the oil change.

    Some of our customers request sythetic oil which costs considerably more than natural oil.

    Also, we always install a new Toyota factory oil filter with every oil change. Many companies use "after-market" oil filters which are far less efficient that the manufacturer's in design and materials. Also many companies charge extra for the oil filter, over and above the advertised price of the oil change. Always be sure that you get a fresh filter with every oil change. Some companies don't do this.

    Furthermore, we use only high quality oil recommended by Toyota which completely meets their engine specifications. Many companies use RECYCLED OIL. This is nothing more than waste oil which is filered and used twice. More and more companies are using recycled oil to change your oil now that the price of oil has risen to record highs. There is no law requiring companies to disclose this and the only way you can find out is by asking...and even then you might not get a straight answer.

    I've read and heard ads for oil changes at a price that is less than my cost for just the oil, not even counting the oil filter or labor of installation. "There's no such thing as a free lunch." Nobody sells anything for below their cost. If they advertise something below their cost, there is an ulterior motive. The Dealer Fee is a famous example of that. Low priced oil changes are either to lure you in so they can sell you extra repairs that you "didn't know you needed" on your car, or with hidden charges like the oil filter or a "sundry supplies charge".

    We charge from $29.99 to $39.99 for oil changes, depending on the size of your engine and the amount of oil it holds. Our price has no "suprises" at the cashier. That's all you pay and you get top quality oil...not recycled waste oil.

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  5. Mr. Stewart,

    I appreciate you responding to my question. I went to your web-site and for a 4 cylinder oil change on my 2007 Camry it states that it is $39.99 this is why I am asking. It does not tell me if it is synthetic or not. Also I called your service department and they said that you use 10w30 bulk motor oil. My owners manual says to use 00w20. I have never heard of this, but do you or don't you use this oil? I certainly don't want anything for free or pay below your cost. I don't expect that, but I don't want to pay $39.99 for a Camry oil and filter change as per your web-site service specials. I will assume that this is a mistake and you will look into it and have it corrected. I also want to make sure you are using the oil that is recommended for my car. I don't want any problems. I only use Toyota for my service and don't want to read one thing on your web-site and be told something different.

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  6. Dear anonymous... re $39.95 oil change,

    Thanks very much for calling to my attention a mistake on our Web site. We posted the wrong price for your 4 cyl Camry and this mistake has been corrected. My service director, Paul Nys, sent me the email I copied and pasted below which addresses the rest of your questons:

    "Good Morning Mr. Stewart,

    The price in our Web Site was incorrect and has been corrected to $29.99. The quoted cost for the oil and filter change in our Site includes oil, we use 5w30 which we purchase in bulk from Mobile. The higher number is used because of the extreme heat we must deal with in Florida. An optional oil and filter change is available using 00w20 synthetic and will cost the customer $49.99. The 00w20 should give the customer slightly better mileage because the synthetic modules are all the same size and create less friction compared to regular oil. Please let me know if you need any additional information, thanks, Paul"

    I apologize for our error and I hope this answers your other questions.

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  7. Mr. Stewart,

    Thank you for the clarification.

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  8. like some VERY INFORMATIVE READING? go to this google search that I have done for you and read the First one on this page!

    http://www.google.com/search?hl=en&ie=ISO-8859-1&q=bell+road+toyota+rip+off&btnG=Google+Search

    Post your thoughts, Can't wait to read what you post!

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  9. stick bogart,

    I read some of the articles. Sounds like you were a slimmy salesperson with intent to steal. Instead of people hiring you to speak about the tricks of the trade they should be putting you in jail, scumbag. You do not portray the majority of the sales people. You represent the small minority that gives us a horrible name. Thanks alot scumbag.

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  10. hey Anonymous Stick Bogart here. Why is it that you hide? You have no back bone? maybe you and your dealer are bending car buyers over and having your way with them. I am willing to bet that many have posted Rip Off Reports on www.ripoffreport.com about the dealership that YOU work at. I dare you to post the name of the dealership that you work at!

    Show me you have guts! I am a MAN and I am willing to post my name, You on the other hand are a weak puke!

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  11. Well Stick I think you'll find posting your name to be a mistake. My observation is you have a service of your own to sell and do it by maligning competiors and those who you disagree with.

    You think you have harnessed a WMD in the form of posting on the internet, you have no idea how little you know.

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