Smoke and Rearview Mirrors

Magic Tricks, as a kid you probably loved these. Maybe you had a suspicion that the rabbit was under the table, hidden by a tablecloth before he mysteriously appeared inside of a hat. You also knew that it wasn’t physically possible to cut a lady in a large box in half and then put her right back together. Not understanding exactly how the magician pulled it off is what made it so much fun.

Dealerships all over the nation advertise magic tricks. “$15,000 Off Trucks!”, “$99 A Month For A Brand New Car!”, “$5,000 More For Your Trade!”. Just like kids, adult car buyers have a suspicion that it’s not really magic, the dealership can’t afford to do that, or can they? Curiosity gets them in the door. Most of the time they are told by a salesman who has already said it 35 times that week, “The $99 New Car is a lease special on a base model tiny car with no rims and it’s a stick shift with roll-up windows, $4,500 due at signing and you need a 750 or better credit score.” Suddenly it’s not so magical, it’s just disappointing. Perhaps it’s a consumer who is looking for a great deal on a new vehicle out of necessity. So they are easily switched to a purchase and leave there at $350 a month, the dealership made another sale, the advertising must be working. Just because it appears that the magician cut the lady in the box right down the middle, does that mean she is really cut in half?

Deception is awesome when doves appear out of thin air. It’s not as much fun when car buyers find out that they can only have “$5,000 More” for their trade if they pay sticker price for the vehicle they are interested in purchasing and they also “need” a high priced warranty to go with it. The smoke and mirrors fade, the excitement wears off, the buyer wonders if she actually got a good deal, or got taken advantage of.

Average Joe comes in looking for a brand new big truck. He’s got his heart set on a gray crew cab with leather. He’s talked it over with the wife, it’s “$15,000 off”, clearly that’s a great deal! We all know what happens next. Salesman Sal says, “Joe, it looks like you only qualify for about $4,000 in rebates and discounts…” But why? It says $15,000 off? “Joe, those are for things like if you are turning in a lease, if you are a teacher, a Costco Club member, in the military, own a horse, and if you finance through the manufacturer, but not at the 0% you asked for, you get the rebates or the low rate, not both.” Average Joe is bummed out. He looks in the rearview mirror and thinks, ‘I’m never going there again’, as he goes home to tell Average Jane that the “$15,000 off” wasn’t a great deal after all.

Magic tricks are for kids, not for car buyers. Consumers have more educational resources at their fingertips than ever before. If they don’t call bologna when they see these types of advertisements online, they do in person, when they are let down and annoyed on the car lot. These practices have been around for decades. That doesn’t make them morally right. It perpetuates the stereotype that dealerships are dishonest and deceptive. In turn, this creates new types of competition for dealerships. “One Price, No Haggle” dealers, “Vending Machine or Online Car Buying” services. Their goal is to be seen as honest, transparent and easy to buy from. That’s appealing to many car buyers. Whether or not it is a better way to buy a vehicle is up for debate.

With that being said, I personally love dealerships and think they are the best option for purchasing a vehicle. Service centers with trained technicians who know how to work on a specific manufacturer’s vehicles are necessary. Professional salespeople who have the knowledge and passion to help people with car purchases provides much more value than getting a car delivered by a person who was bartender a month ago, with no background or training in the automotive industry. I believe that we have a responsibility to improve the car business for the people that work in it, and for the consumers. A huge step in the right direction is to leave the smoke and mirrors act to magicians.