Car dealer questionable business practices

[Nightclub Dwight]

Dealer finance people really piss me off. For the past 20-plus years I have almost always paid cash for my cars, but when interest rates were ridiculously low it made sense to borrow, especially when buying a more expensive car. I was pretty interested in a $40,000 Corvette and had talked price with the salesman. He took me in to meet with their finance guy, who immediately tossed out a loan with 5.99 percentage rate. No discussion of my credit score, 5.99 percent was the rate. At the time, local banks were offering 2.99 on used cars. I may look stupid, but I am not. If that’s they way they want to play, I’m not buying.

A similar thing happened when I bought my Certified Used Cadillac. GM was advertising 2.99 percent financing on certified vehicles. The dealer‘s finance guy offered something higher than 5 percent, without even checking my credit. I asked him about the GM Certified financing, and he denied that it existed. I said “Are you sure?” And he denied it again. I then pointed him to the dealer‘s own web site, where it was prominently displayed on their home page. I got the rate I wanted.

You jogged my memory, I almost forgot--I had to bring up the dealers website too in our visit. We wanted the basic model, but they claimed they didn't have any on the lot. I brought up their site and showed them the three cars that were listed on the website with the specs we wanted. I completely forgot about that.

 

[supersoldier71]

One of my customers is cross shopping multiple dealerships. The difference? We have the thing he wants in stock, but they’re quoting a lower price. They’re quoting the approximate invoice price from ‘20 on a bike that’s maddeningly rare.

I told him that if they can get that bike at that price before the big cross country trip he’s planned for next month: BUY IT!!!

 

[Stanford Guitar]

You should have called and asked again if they were in stock while you were there.

 

[boris bubbanov]

I believe that dealers keep a certain number of cars around as "bait" to sell specifically to people who must finance and will sign off on any number of add ons and high finance rates and so forth. The dealer is not selling cars, they're lending money and then stealing most of the money they just loaned. If you go in with cash in hand or with a high credit rating and level of sophistication, the dealer will generally run you off some way or another. He's fishing, and you smart guys are not the fish he's looking for.

And given that these "bait" cars, once plentiful, are kinda scarce right now, the transparency of what is going on should be pretty easy to see. If you're not seeing it, you're at one of the less sleazy dealers, I would think.

 

[Lonn]

Last new car I bought was totally on a whim and we still got a good deal. We had taken our dog for a walk at the local rail trail. On the drive home my wife says she wants to look at used Nissan Altimas. I was surprised but said let’s go. Drove to the closest dealer and spent maybe 20 minutes looking at late model Altimas. She liked them but decided to look at new Honda Accords as well so off we went with the sales guy to the Honda lot next door. She found what she wanted and had been doing her research without me knowing. She got the price she wanted and had them throw in heated seats (really just the on/off button since the wiring is already factory installed). Little over an hour and we were out of there. Had to come back the next day for it. Easy peasy.

 

['64 Tele]

Isn't "car dealer questionable practices" an oxyoron?

 

[boris bubbanov]

Isn't "car dealer questionable practices" an oxyoron?

Not really. In my view.

I bought a car in both 2015 and 2016 (used Saabs) and I was able to control the transaction to a remarkable extent. What I recommend is, strip out everything about the transaction that is not essential to taking title to the vehicle in question, other than a basic inspection and test drive. Knowing more about the vehicle than the sales goof is easy, IMO, and knowing which product to buy and from whom puts you in a position of dominance. I'm looking at Lonn and his spouse, buying one of these nice new Accords and right off, the dealer knows he's not dealing with fools. They just treat you differently if you're the boss, and not them.

 

[NoTeleBob]

So the wife and I are considering a new car. She wants to buy one final car in the later years of life here and pass her old car on to her son. We go to a local car dealer (who shall remain anonymous) website and see a car we are interested in. It says they have 4 of them on the lot. Pick up the phone and call and am told by a nice young lady that they do in fact have 4 of that model in stock. I make an appointment to go see them. Get to the car dealer and "we are sorry, we don't have any of that model in stock and I don't know why you were told we did". They then proceeded to try to hard sell us 3 or 4 overpriced late model used cars.

So the truth is they lied to me on the phone in order to get the wife and I on the lot so they could pawn some used cars off on us that we didn't want. I have 2 used cars at home. I wanted a new car. I'm considering calling the BBB as I don't appreciate being lied to. I understand that the auto industry has supply problems but that is not the way to do business.

EDIT: I forgot to mention the salesman finally did admit that there was only 2 new cars on the whole lot. Both like $60K large SUVs.

99% of car dealers make the other 1% look bad.

I don't know what state you live in, but bait-n-switch is illegal in many states. If they advertise it, they have to have it. With cars, that would usually be whatever specific cars they advertise (with retail, it's a reasonable supply of commodities, etc). A call to the state Attorney General's office is in order. Don't let them continue to be sleazebags.

 

[Moonraker5]

I went with my mother as she was looking to lease a new Nissan. Glad I went.

She explained at the outset that she was just shopping around. Various dealerships. But they pushed the hard sell on her. Asked her for her credit card before she left for some reason. They never could explain why they needed her credit card. Lock her in to leasing from them, I suppose. With me being there, it got close to being violent. I demanded that the salesman give me his credit card for a few moments, "Let me have your credit card right now. I'm just going to hold it for a while." He wouldn't give, so why should my mother? The owner of the place came out and sided with his overly aggressive salesman...so I got in the owner's face. Luckily it didn't get to violence...but it was close.

Worst part about it was that Nissan dealership advertised during Knicks basketball games. I watch every Knicks game and every night I had to see that scum bag manager of that Nissan dealership on my TV. Oh, my blood boiled every night!

 

[Painter644]

I believe that dealers keep a certain number of cars around as "bait" to sell specifically to people who must finance and will sign off on any number of add ons and high finance rates and so forth. The dealer is not selling cars, they're lending money and then stealing most of the money they just loaned. If you go in with cash in hand or with a high credit rating and level of sophistication, the dealer will generally run you off some way or another. He's fishing, and you smart guys are not the fish he's looking for.

And given that these "bait" cars, once plentiful, are kinda scarce right now, the transparency of what is going on should be pretty easy to see. If you're not seeing it, you're at one of the less sleazy dealers, I would think.

There are numerous economists who decry this shadow banking that skirts federal banking regs and leaves consumers at the mercy of these financing loansharks. GMAC was seen as the worst among them, but all brands find a way to take advantage of people who are neither savvy enough nor do they know their credit status and what it can mean to their total payments. In fact, the finance people are “banking” on it.

 

[Painter644]

I went with my mother as she was looking to lease a new Nissan. Glad I went.

She explained at the outset that she was just shopping around. Various dealerships. But they pushed the hard sell on her. Asked her for her credit card before she left for some reason. They never could explain why they needed her credit card. Lock her in to leasing from them, I suppose. With me being there, it got close to being violent. I demanded that the salesman give me his credit card for a few moments, "Let me have your credit card right now. I'm just going to hold it for a while." He wouldn't give, so why should my mother? The owner of the place came out and sided with his overly aggressive salesman...so I got in the owner's face. Luckily it didn't get to violence...but it was close.

Worst part about it was that Nissan dealership advertised during Knicks basketball games. I watch every Knicks game and every night I had to see that scum bag manager of that Nissan dealership on my TV. Oh, my blood boiled every night!

I’d think the Knicks would boil your blood faster…

 

[Moonraker5]

I’d think the Knicks would boil your blood faster…

Yeah, it was a double-boil. We'd be getting crushed 20-6 after the first few minutes, they'd go to a commercial break and wham -- that a-hole would appear on my TV screen.

 

['64 Tele]

Not really. In my view.

I bought a car in both 2015 and 2016 (used Saabs) and I was able to control the transaction to a remarkable extent. What I recommend is, strip out everything about the transaction that is not essential to taking title to the vehicle in question, other than a basic inspection and test drive. Knowing more about the vehicle than the sales goof is easy, IMO, and knowing which product to buy and from whom puts you in a position of dominance. I'm looking at Lonn and his spouse, buying one of these nice new Accords and right off, the dealer knows he's not dealing with fools. They just treat you differently if you're the boss, and not them.

It's a lot better than it used to be.
My fix for this is avoid large metro dealers like the plague.

 

[CharlieO]

I went with my mother as she was looking to lease a new Nissan. Glad I went.

She explained at the outset that she was just shopping around. Various dealerships. But they pushed the hard sell on her. Asked her for her credit card before she left for some reason. They never could explain why they needed her credit card.

Taking the credit card is just a way for them to control the situation and keep you from leaving until they wear you down and convince you to buy. It is a variation of them taking the keys to the car that you might be trading in, and "sending it out back to our appraiser for a test drive, to determine what it is worth." You know darn well that they are not doing that. They are holding your keys as hostage until you agree to buy. I saw that happen at a dealer in Milwaukee, and my brother went through that 30 years ago at a Honda dealer in California. They made him wait 90 minutes for his keys before he got vocal and insisted in front of other customers that he wanted his keys so that he could go home. Amazingly, he returned to that dealer and bought a new Honda. I asked him why he would do that after getting that treatment and he said "They are the only Honda dealer for at least 50 miles, and I wanted the car." I would have driven 500 miles to buy from another dealer if I had to.

 

[Painter644]

Isn't "car dealer questionable practices" an oxyoron?

No, it’s a redundancy.

 

[supersoldier71]

Maybe peculiar to motorcycle sales, but customers expect large discounts for cash deals and that’s not really a thing. No benefit to the dealer and large discounts don’t benefit me.

Some customers presume I or the dealership is eager to move units at a loss. Maybe when inventory is high and demand low. Flip that and we hit a market where it’s reasonable for the dealership to let a deal walk because a profitable customer is on the phone ready to make deposit on a product that doesn’t yet exist.

Folks treat the salesman and his pay as objectively evil things, even when the salesperson doesn’t pressure, tells the truth and assists with finding the right product at the right price. When it comes time to sign, it benefits the customer to value the salesperson at zero.

Fortunately for me, most people do not choose to value the service at zero. But the ones who do, are often completely unrealistic in their expectations anyway.

 

[Painter644]

It's for reasons like all of these and the now popular "market adjustment" pricing (taking it upon themselves to increase the price of the new car because of the shortages) that independent new car dealerships aren't much longer for this world. I know Ford, for example, was threatening to pull dealerships for marking up the sticker prices. Tesla and the other electric companies have set a model that the other big companies are taking notice of.

“Market adjustment” = price gouging. There once were laws that were enforced…

 

[DanglingNutslots]

“Market adjustment” = price gouging. There once were laws that were enforced…

What law prevented prices being raised?

 

[Cpb2020]

What law prevented prices being raised?

Not that it would apply here, but at least in NY (General Business Law Section 396-R), “charging grossly excessive prices for essential goods and services” during “abnormal disruptions of the market” is prohibited. Factors are include the amount of the price increase and whether there was unfair leverage or unconscionable means.

 

[ellielo]

Not everyone likes to do their business very honest. I prefer to make less profit but talk to my customers straight and without all those weird "hints". Anyway we use microsoft teams sms and all the clients receive the same information about the prices, sales and other important stuff.