If I was a car dealer and reading some posts on this blog, I might be pretty upset.  It’s almost too easy to write callous comments about dealers, their sales techniques, and what extents they will go to when trying to sell a car.  In the name of objectivity, here’s my headline story for today: CAR DEALERS GET A REALLY BAD RAP.

The only difference between a car dealer and almost every other business you deal with is that car dealers often have a single day, or even a single hour, to sell a car when other businesses take their good ol’ sweet time.  Other businesses have months and sometimes years to do the same thing.  To make the point, here’s a comparison of some car sales techniques with techniques used by some very well known businesses:

Low-Balling

• For cars this is the practice of quoting an unrealistic price and then unexpectedly changing that price. The whole point of low balling is to get you, the consumer, mentally committed to buying a car. Once you’re committed to buying the car, you will agree to just about anything because not buying the car is inconsistent with your previous decision to buy the car. McDonalds is reported to also be in the business of low balling. Apparently McDonalds low balls the calorie and fat content of some foods by using unrealistic serving sizes. So if you have been eating a lot of their soft serve cones because you thought they only had 150 calories and 3 grams of fat, you might be surprised to find that they have around 225 calories and 4.5 grams of fat. Are you going to stop eating those cones? No, I didn’t think so…

Selling Add Ons

• If you dread buying a car because of all of those add-ons you’ll be asked to buy, sit down in front of a mirror and practice saying, “no… no thank you… no… no thank you.” This will be valuable not only when buying a car, but also when buying a lot of other things. Computers and computer companies for example – we all have our favorite. However, computer companies aren’t really different than a car dealer. The “special prices” we are quoted often don’t seem that special after we get a hard drive upgrade, RAM increase, service plan, better processor, and software additions for the extra cost of $500 to $1000. Are you going to speak poorly of your favorite computer company now? No, I didn’t think so.

Promoting the Benefits

• Car dealers know how to promote all the benefits of their cars. Performance, comfort, reliability, price – they have a sound bite for everything. My personal favorite was from an Infiniti dealer that was promoting the FX35 (small SUV) by calling it a “sports car with a back pack.” As you can see, I’m still thinking about it and writing about it today. However, this idea of promoting the benefits is used by all businesses, but we choose to see other businesses differently. Remember that desperately average entree or bottle of wine you had at dinner because your waitperson said it was wonderful and gave an amazing description? Well, it’s not any different than a car dealer. When you go out, will you tell your friends a story about what the car dealer said or what the waitperson said? Neither is really that funny or interesting, but I’m betting you’ll talk about the car dealer.

This list could go on and on, but I’ll end it here and leave it up to readers to comment and debate my claim that CAR DEALERS GET A REALLY BAD RAP.

You just spent months picking the “right” car.

You shopped around online through hundreds of listings at autotrader & cars.com at your lunch hours.

You beat the pavement at car dealers on weekends.

You’ve finally found the car you want at a dealer.

Now it’s game time.

You put your game face on. You go out to the dealer, and you’re ready to negotiate.

The salesperson at the dealer gives you the run around for two hours but you finally reach a price that you believe is fair and you can’t wait to drive off the lot.

The salesperson walks up and introduces you to a new person from the finance department.  He says this new person is going to finalize the contract – the hard work is done, just sign on the dotted line and relax.

Not so fast !

This is the epidemic we’d like to inform you about: The post-sale sale where dealers make a LOT of money.

The finance person tells you that there are some really important add-ons that you should buy to make sure your “investment” is safe.

How about:

• extended warranty
• theft insurance
• tire insurance
• rustproofing
• fabric protection
• paint sealant
• window vehicle identification (VIN) number etching

Are you feeling a little overwhelmed?  Don’t panic.

As long as you know these things are coming, and you know what they are before you agree to buy them, you’ll be okay.

Extended Warranty:

In general, you really don’t need an extended warranty unless you knowingly buy an unreliable car and plan on keeping it way past its normal warranty period.  If you are set on getting an extended warranty because you break out with hives when you have to spend more money to fix your car (like me), then remember that warranties offered by auto manufacturers are usually better than third party warranties.  Read all the details and make sure you understand the policy.  For example, I have an extended warranty and I can get the full price back (without interest) if I don’t use it… and I make a claim to get the money back within a small time window.  Know the details!

Theft Insurance:

This extra really threw me for a loop.  The finance salesperson told me, “I wouldn’t sell these insurance policies if there wasn’t a need for them.”  What he really meant to say was, “I wouldn’t sell these insurance policies if I couldn’t convince somebody they needed them.”  My advice is to first see what coverage you get through your normal car insurance company.  If you don’t like the response, check out the National Insurance Crime Bureau to see if you’re really buying car that is at risk for theft.

Tire Insurance:

This insurance comes in different forms – tire insurance, road hazard warranty, tire reimbursement plan, and more.   A dealer will most likely try to sell you the reimbursement plan.  A reimbursement plan will replace your tires (usually pro-rated to remaining tread life) in case of some catastrophic failure.  First, if you really did serious damage to your tires, then you most likely damaged a lot of other potentially expensive components in your car’s drive system.  Your normal insurance policy should pick this up.  Second, how many $500 investments are you insuring?  My guess is none.

Rustproofing:

All newer cars are made with rust-resistant galvanized steel and then treated with a rustproofing product. In case you are thinking about getting your car rustproofed anyway, here’s a great clip from Car Talk about rustproofing.

Fabric Protection:

Many cars have their upholstery treated in the factory.  An alternative is to do-it-yourself with some Scotchgard protector for less than $10.

Paint Sealant:

Just like rustproofing, car factory paint is now sealed and durable.  Just like fabric protectors, there are at a lot of auto stores, supermarkets, and retailers that sell quality paint sealants and waxes to protect your paint for less than $20.

VIN Etching:

Some states require dealers to offer VIN etching , but you get to choose who you buy it from. A do-it-yourself system can be bought for $20 and some claim you can do-it-yourself in only fifteen minutes

As a final note, if these add ons are so great, why don’t dealers advertise them on their web sites?  If you bought any of these and had a good or bad experience, please comment.  Also, if there’s a new type of add-on that you think I’m missing, let me know so I can research it and add it to the list!