Monday, February 02, 2015
Open Letter to Florida Car Dealers IV
SUBJECT: DON’T UNDERESTIMATE YOUR CUSTOMERS' IQ
Dear Florida car dealer, this is the 4th letter I’ve written to you. The first asked you to stop charging your “dealer fee” on top of the price you quote your customers. The second asked you to advertise cars at a price you were willing to sell the car for and have an ample supply of. The 3rd asked you to accept the responsibility, and not blame others, for the fact that car dealers have a terrible reputation comparable to politicians and lawyers.
I’m looking at a used car ad about a special one-day sale in the newspaper that, by the time you read this column, will have taken place.
Here are some of the claims in this car ad:
Claim: The dealer is forced to sell used cars for $9 because he is overstocked.
Fact: If a car dealer was overstocked with used cars he would not sell them below his cost and no used car costs as little as $9. A car dealer can sell a junk car that won’t even run for $150 just for the scrap metal.
Claim: We can afford to sell used cars for $9 because we are a large volume dealer.
Fact: No matter how large a dealer is, he cannot afford to sell his product below its cost.
Claim: You are asked to pick out the used car you want and then “sit behind the wheel”. Only then will you be given the discounted price.
Fact: This is a tactic invented by a promoter who charges dealers to put on these sales. This tactic is meant to instill irrational excitement in the mind of the potential buyers. The promoter will have a fast-talking pitchman with a bull horn trying to whip everybody into a buying frenzy. He goes from car to car “ripping” the old price sticker off and showing the new price. One thing that keeps people sitting behind the wheel of their chosen car is the hope that it is a $9 car.
Claim: The General Manager of this dealership states, “I mean, a quality used car for as low as $9? That’s irresistible!”
Fact: There is no such thing as a quality used car for $9. You would be lucky to find one for as little as $5,000.
Claim: “After 1PM Saturday, all cars will return to their usual prices.
Fact: You can buy any used car from that dealer (except the two $9 cars) for the same price that they were advertised for in that sale.
You know that all the claims in this car ad are false and so does virtually everybody that reads this column. Unfortunately there is a minority of car buyers who are unable to pick up on this deception. These are the buyers who will flock to this kind of a sale. I know what I’m talking about because I put on this very kind of sale many years ago. I’m not proud of this. We had overflow crowds, people actually arguing over who could sit behind the wheel of the car to find out what the discount would be. We would sometimes sell 50 or more used cars during the one day of this type of sale...More than we would normally sell in 2 weeks. The people who flock to these sales are the very young, the uneducated, minorities who have difficulty with English, widows or others who have never bought a car before, and generally those most vulnerable member of our society.
So, you say. If these sales are so successful, why do you warn me not to “underestimate the IQ of my customers”? Here’s why. Far more people read your ad than the poor souls who succumb to your deception. For every person who fell for your ad, there are probably ten people who read your ad and understood how misleading it was. How many of those will you ever sell a car to? What does an ad like that do for the image of car dealers in our community? Ads like these and the sales practices encountered by those who are fooled by these ads make a car salesman the butt of as many jokes as you hear about lawyers and politicians.
I don’t ask you to stop running these kinds of ads out of the “goodness of your heart”. I am asking you because it’s simply good business. Your image is important and the only reason you are doing OK now is that most other car dealers don’t offer a better alternative. But, as Bob Dylan said, “The Times, They Are a Changin’”.
Cc: Pam Bondi