By on November 15, 2009

(courtesy farm3.static.flickr.com/2049/2335051237_02e0eaf6ea.jpg)

You might have thunk that car dealers would stop being skunks, what with the economy going thunk and the end of cash for clunk. But noooooooo. If anything, tough times have seen an increase amount of the same old story, same old song and dance down at the car lot. “You pay what we pay is back!” Little Rhody’s Flood Automotive Group proclaimed, before switching to free tires for life. And what of this? WYTV in Ohio reports [breathlessly] that Greenwoods Hubbard Chevrolet brought in the punters by selling used cars for $5. “Denny Denoi, General Manager of Greenwoods Hubbard Chevrolet said, ‘It’s just something that we wanted to do instead of taking some of these older cars to the auction we decided we would just sell them to the people of the Valley.’” That said, “The catch with this $5 car sale is that there were only 3 cars for $5, and those 3 lucky people’s names were actually pulled from a box.” But that’s OK, right? “Denoi said the sale was a success, and that most of the customers left the dealership happy, even though they didn’t get to drive away with a car for $5. ‘There’s [sic] some people who walked away with some great deals and some people who needed some cars that got some good transportation, and for the most part, I think 95-percent of the people are thrilled today.’” I wonder if GM’s new Sales Maven Susan Docherty will take that one national.

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27 Comments on “Car Dealers Still Using Cheap Tricks...”


  • avatar
    afabbro

    <quote>You might have thunk that car dealers would stop being skunks</quote>

    And you might have thunk that the world would be bluebirds and sunshine and raindrops on roses and whiskers on kittens and rainbows.

  • avatar
    jacad

    Who would be most at fault here? The car dealer who dreamed up the promotion and actually delivered or the consumer who was stupid enough to truly believe in the Tooth Fairy.

  • avatar
    NulloModo

    I’ve seen the $5 car promotion (as well as slight variations) tons of times in various areas of the country.  The more effective version is to set it up so that all the used cars on the lot have a covered price tag on the windshield, and customers have to be sitting inside of a certain car at an appointed time when the prices are unveiled.  If you happen to be sitting in one of the $5 cars, you get first chance to buy it.
    The benefit to the dealer of course is that all the people in the other cars have already picked out, sat down in, and started to get interested in a car you can sell and actually make a profit on, and some of them will end up buying.
     
    Personally, I don’t see anything wrong with such a promotion as nobody in their right mind is going to assume that anyone can just walk in off the street and buy a car of their choosing for $5.
     
    Marketing ploys like this are hardly limited to car dealers though.  Every retailer in the nation has loss leaders aplenty during the holiday season, and especially on black Friday.  Free tires for life, free oil changes for life, free lifetime warranty, free lojack, etc, all have retailers equivalents as well, from ‘free TV stand when you buy any HDTV over 46″‘ to “buy one pizza at regular menu price and get another for 50% off”.

  • avatar
    OldWingGuy

    Speaking of “lifetime warranties”, years ago I worked at a tire shop that got into replacing mufflers. At first they offered “lifetime warranty on parts and labor”. The trick, of course, is lifetime warranty on the parts, but the customer pays all the labor (and then some).
    One guy had dual exhaust put on his Chevy truck. Being Canadian winters, the exhaust rotted away every winter, so like clockwork in the spring he was in for new mufflers and tailpipes.
    After quite a few years the owner told the guy that’s it, he couldn’t keep doing this for free anymore. That he would have to charge him the labor. The guy went to his truck, pulled out the laminated warranty and pointed out the words “lifetime” and “parts and labor”. He actually had the warranty laminated. He was going to keep that truck going forever just to screw the shop owner.
    Sometimes the little guy wins, but not very often.

    • 0 avatar
      dmrdano

      I did the same thing with a Celebrity wagon where the muffler sat crosswise by the back bumper.  It never got hot enough to cook the moisture out, so every year I got a new one.  An independent shop installed the muffler from NAPA, and NAPA paid him every year to change it (three times for me).  The mechanic told me I hadn’t bought a muffler – I subscribed to the “Muffler Annual.”

  • avatar
    Mikein08

    In the newspaper business, articles like this are called “filler”. 

    • 0 avatar
      geozinger

      If I hadn’t recognized the call letters of the TV station as one from my hometown, I would have ignored this posting. No news here.
      Maybe if it had been another type of dealer (i.e. non-GM), the snarky reference to Susan Docherty could have been avoided. 

  • avatar
    Robert.Walter

    Unless it is something like “All used cars for 5$” turns into “on 3 cars only”, it doesn’t really smack of “bait and switch”…  I don’t see the issue.  Am I missing something here?  (Cool picture tho… wonder if they held up the other bills to get similar effect!)

  • avatar
    DweezilSFV

    Sometimes the dealers bring in bands, food and balloons to get a crowd in for their sales events. Sometimes you get mailed a key to try on their prize box.

    It’s  salesmanship, show business, marketing. Cheap, yes. Trick, no.

    A  little bit of fun for the look-e-loos, a chance for the salesmen to get their cards out there, the dealer gets some extra exposure to potential clients and may even sell a couple more cars. Pretty damn harmless, seems to me.

  • avatar
    carguy

    I agree but I’m not sure that news to anyone at TTAC – as times get tougher the ethics of most business tend to get more flexible – not less.

  • avatar
    Dynamic88

    I took someone car shopping yesterday.   They were interested in a Honda, so we went to the dealer where I’ve bought Hondas – going back to the mid ’80s.
    The salesman was pleasant, demonstrated the car well, let us test drive the car, then when it came down to looking at the numbers, he pulls the 4-Square on us.   He also packed an extended warranty, floor mats, and security etching right into the price to begin the negotiation  with.     Of course he opened his gambit with a 20% down payment.    I couldn’t believe it.
    I just sat there, unbelieving, then we just told the salesman we’d think about it.     We won’t of course.   We already knew what payments would be at various prices, and we already knew we’d set up financing through the buyer’s credit union.
    They not only lost that sale, but likely future sales from me.    I’ve been delighted with my Hondas over the years, but I’m sour on my local dealer and probably won’t ever buy another car from them.
    This is the time to take market share -at the local dealer level- by being better than the others, not by being as grubby as the others.

    • 0 avatar
      NulloModo

      So the salesman was courteous throughout the process and you are going to go elsewhere just because the dealership has a negotiation process?  Do you expect him to come down with the invoice in hand and ask you how much under it you would like to pay?
       
      Yes, the dealer always starts out high, but the buyer always starts out low, in the end usually a fair price can be agreed to and everyone leaves happy.  I do agree that throwing in an extended warranty and extra charges for floor mats and glass etching is a bit sketchy (do all Hondas not just come with floor mats now?  All Fords do except for super-bargain-basement stripper models)  but all you have to say is no you don’t want any of that, and move on in the process.
       
      Similarly with the financing, you may have known you were going through the credit union, but did you tell the salesperson that?  If he doesn’t know that is the way you want to go, why wouldn’t he offer their financing.  As far as money down goes, while people don’t like to hear it, a lot of times you do need to put money down to get the best interest rates now that banks have tightened up, especially if you have less than stellar credit.
       
      The reason why competent, intelligent, and professional salespeople still work at dealerships is because they can make a good living doing so.  If you want an excellent buying experience with someone who is knowledgeable and takes the time to answer your questions and find the right vehicle for your needs, it is only fair that they should be able to make a fair profit on the exchange.  The reason you can’t ever get halfway decent service at a Best Buy or Wal-Mart is because the salespeople there have no motivation, if they are making the same minimum wage or slightly above minimum wage whether you buy something or not they have no incentive to know anything about the product or to take good care of the customer when they come in.
       
       

      • 0 avatar
        Dynamic88

        You must be in auto sales.
        No, I’m not refusing to buy another car from them because they have a negotiation process.   I’m refusing to buy another car from them because they have a scummy negotiation process – which they didn’t have when I bought there before.
        I expected to negotiate the price of the car and nothing else.    He didn’t offer financing, he just put numbers on the 4-square.    He offered financing later, when it was obvious to him that the numbers in the squares were silly – e.g. we weren’t the suckers he’d hoped for.
        Yes, I know I can reject the items he packed into the deal.   I shouldn’t have to.   I have no problem at all with him offering me $400 floor mats.   I don’t even have a problem with him attempting to convince me that for some reason Honda floor mats are worth $400.    I’ll just say no thanks, I can get them cheaper at AutoZone.    But he shouldn’t have added things into the starting price.   That goes for the extended warranty and the etching too.    That makes me feel that he’s going to slip something in later, hoping I won’t read the fine print.
        Why not start the negotiation process in a more honest and straight forward way?   Why make someone say-  “No I don’t need those useless overpriced items, take them off your initial offer”  ?      By all means, try to sell the extended warranty, but don’t add it on at the start w/o asking the customer.
        Also why start the silly 4-square process with a 20% down payment – and before going further, I used to sell cars, so I’m not asking why they do it in the small sense, I’m asking why in the meta sense.   Why treat your customer that way?    We didn’t use it back in the mid ’80s because it had already become antiquated, not to mention insulting.    But I guess there is always another generation that hasn’t seen it.
        I’m not against the dealer making a profit.  I don’t expect to buy the car at cost.   The amount they get over cost will simply be the result of our negotiation, and we’ll reach a deal or not.   But why start out with scummy tactics like the 4-square?   It doesn’t look good.   It doesn’t make the average customer think well of the dealer.    Admittedly it probably usually results in the 10 or 20 dollar bump, but that’s only if you haven’t driven the customer away early in the negotiation process.
         

  • avatar
    Geo. Levecque

    Ford dealers here in Ontario are offering free Winter Tires and Steel Rims if the Customer buys a Ford Product like the Fusion, it works as a good set of Winter Tires and Rims could cost you a $1000.00 or more!

  • avatar
    Tosh

    What’s next? Windows 7 still crashes?

  • avatar
    BuzzDog

    I never seem to have to put up with the intelligence-insulting games since I started bringing my laptop in when it’s time to work the deal.  It’s opened to an Excel spreadsheet that totals every line item and automatically calculates the payments (I’ve been in banking for almost 30 years, so I do financial analyses all the time).

    Don’t know if it’s the fact that they know I’m checking their figures, or the intimidation of dealing with someone who has half a brain…and who is treating the buying process as a business transaction, and not as the beginning of a love affair with a four-wheeled mistress.

  • avatar
    PeteMoran

    Why do we have to feel sorry for the idiots that frequent dealers like this?
     
    It’s like asking me to feel sorry for those rich Florida retirees who were trying to get richer investing 100% of their money with Bernie Madoff. Sympathy – I have none.

  • avatar
    Mr. Gray

    Yup. Dealers are sure up to their same old dirty tricks. I recently recieved a promotional flyer in the mail from a Ford dealership, claiming that I’ve 100% guaranteed won one of three fabulous prizes:

    1. A new Focus
    2. $10,000.00 cash
    3. Up to $1000.00 in gold coins

    All I would have to do is show up with the flyer! Upon reading the fine print, I realized that the opperative phrase was “up to”, meaning that there is only a 1 in 249,997 chance of winning anything other than 1 gold coin worth $1.00.

    It probably didn’t cost the dealer much to send out the bait, and if even one sucker shows up and gets suckered into buying a piece of crap car, they’ve made back their money in spades.

  • avatar
    50merc

    Best deal I ever heard of was accomplished by an elderly lady who got from Consumers Report a document that showed the current cost (net of rebates) of the car she wanted and the price to offer for it. One morning she took the document to a dealership and explained that’s what she was willing to pay. The salesman, a “closer” and the sales manager worked all day to get more money from her. She just kept saying that’s what she was willing to pay, and so she’d just try another dealership. Every time she stood to thank them for their time and to leave, they lowered their counteroffer. Hours later they agreed to sell the car for her price. Then she told them how much she wanted allowed for her old car. Much more time passed, with the same one-sided negotiation, until they gave up at closing time. Jeez, I wouldn’t have been able to sit there all day.  Internet deals sound a lot less painful.

    • 0 avatar
      dmrdano

      Can we have this lady bronzed and put on a pedistal somewhere?  Most of us are too lazy, too easily intimidated, and too in love with the product to use our heads like this.  We say we are too busy, but think of how many hours at work we have to put in to make up for the difference in the car price.  On the side, I often wonder how accurate these on-line pricing guides are.

  • avatar
    Via Nocturna

    Caveat emptor is an eternal principle. Didn’t read the fine print? Didn’t get a second opinion? Didn’t do your research? Then you have no right to complain.

  • avatar

    While some SEM ads mention incentives, there are still a large number of car dealers or car trader who are lacking hard numbers in their copy. Don’t be afraid to put a dollar sign in your ad copy. In fact, it’s better to have a price listed so someone doesn’t click your ad and then immediately leave after they see the price on the landing page. That results in a wasted click, which means wasted ad dollars. If actual prices don’t sound appealing, advertise your incentives. Online search users are browsing for good deals, so why not have your ad reflect their needs? For example, a good ad could say “New Jeep Wranglers at $4500 off MSRP.” Any mention of a discount, sale, giveaway, or promotion is more likely to draw a click from a curious online bargain hunter.

  • avatar
    dmrdano

    What drives me crazy are rebates.  Just take the money off the purchase price.  Pay extra for taxes and financing, just to get a check in return?  I don’t buy new, so maybe I am missing something in how it works, but it makes no sense to me.

  • avatar
    Bridge2farr

    and this is news?

  • avatar
    jacad

    Manufacturers have not sent checks to people for rebates for years. They do take it off the purchase price.


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