Most new car buyers flip-flop after visiting a dealer

When it comes to retail horror stories, no sales or service experience is more notorious than that of the car dealer.  Today, there's a study out that aims to put a number on just how bad it is. According to J.D. Power and Associates, 80% of new car buyers don’t buy the top car on their list because of a negative dealership experience.

Let's paint this scenario from a different industry's perspective. Say you were a Sony executive and found out that many customers wanted to buy your TVs, Blu-Ray players and products, but that 4 out of 5 of them changed their mind and bought something else after visiting your store. You would not be happy.

The J.D. Power research, called the 2008 Escaped Shopper Study, cites “lack of professionalism” among auto dealers' sales staff as the major factor. Among the other top reasons cited for abandoning a purchase: dissatisfaction with dealers’ service facilities and an inability to find the exact model in the dealer’s inventory. The inventory issue represented only 14% of the total retail gripes.

Automakers spend a great deal of time, money and expertise attempting to correct both dealership behavior and consumer perception, but the negative image of car dealers is so entrenched that a turnaround seems somewhat doubtful.

Research analysts say poor retailing practices are to blame. “Given today’s challenging automotive market, both sales and service experiences at the dealership are particularly critical in the decision-making process of shoppers,” said Tom Gauer, senior director of automotive retail research at J.D. Power.

Though the study also reflects a growing consumer trend toward buying smaller, more fuel-efficient cars, the second most-significant factor beyond dealership experience was price. Forty percent of the people who cited price issues as the reason they didn't buy a car said that, although they could easily afford the car they were shopping for, they did not feel the general price of the car was a good enough value.

Jack Nerad, executive editorial director and executive market analyst for Kelley Blue Book and kbb.com, mentioned that this consumer trend was last seen during the 1970s: consumers looking for basic, small cars. “Many people right now are looking for basic transportation with simple, non-complicated content. If you visit a dealership these days, you won’t see a large supply of base models with manual windows and simple-to-use functions.”

So, which companies are the least unpleasant at the retail level?  (Drum roll, please)… No. 1: Honda. No. 2: Acura. 

Coincidentally or not, Honda's local advertising campaign seeks to emphasizes that its dealers aren't the smarmy guys that folks normally think of as selling cars. The "Helpful" campaign, commissioned by SoCal Honda Dealers, depicts Honda salespeople apologizing to consumers for the past sins of the retail car industry. In a sympathetic response to the endless complaints, the Honda salesperson says: "I wouldn't do that. I sell Hondas. It's my job to be helpful."

-- Joni Gray

Photos: Car sales guy provided by bonkedproducer via Flickr; Honda "Helpful" photograph by Secret Weapon advertising agency.

Comments

[Jack]

The last new car I bought, I felt pretty good about. I dumped a repaired (pathetically repaired by a factory dealership) vehicle on the dealer and got $5000 off the sticker. I've walked off dealer lots because of the sales persons stupidity and in some cases have completely written off the brand because of it. I think I'm down to about 3 makes that I would buy. :p Motorcycle stealerships are almost as bad. I think with the tightening of credit, collapse of the housing market, and the price of gas, you could get some good deals on cars if you were willing to work a bit. I won't be buying another car for about a year and half, after the second wave of housing foreclosures hits the country. I'll be buying some ones almost new sports car for cheap!

[Raul X. Garcia]

Would you like to buy a extended warranty? How about that thing they call extra insurance?

[jay]

I prefer root canal to shopping for a new car.

[Arous]

It's the same old story. If you can move 200,000 units and not worry about the actions of a sales staff you don't have to control, then why worry at all. Most people have realized, I hope, that a major automobile dealership is not the most economical place to have you car repaired. How long is it going to take before these people realize that spending up to four hours to try and buy that same vehicle in that same environment is just as counter productive?

[Chely]

I agree...two years ago I was buying a new car, I had a great job with great pay and had a few options available when it came to cars...I went to a BMW dealership...they would not give me the time of day or even attempt to try to sell me a car...I went to Acura and in a matter of a couple of hours I walked out with a new car...no regrets at all and I have continued to recommend people to that dealership for their purchases happy customers

[Hari]

I will not buy any Chrysler products and here is why.

Back in 1998 I bought a mini-van from a Dodge dealer in who sold me a stain removal warranty. I took it because it seemed smart move with little kids. But after two stain removals, the dealership said they changed hands and won't honor the warranty. After contacting corporate and the insurance company administering the contract, i was told the dealer never remitted the money to the insurance administrator. I complained to Chrysler CEO but without any success. They sent me a standard format letter indicating that it was not a company warranty but a dealer warranty.

From that day onwards to this day, I don't associate or buy anything from Chrylser. Good Riddance, Chrysler!

[Mark]

My worst experience buying a car was with a Honda dealer, so I'm not surprised by the finding. It was so bad that I was motivated to send a letter to Honda headquarters to complain. In return, I got a silly form letter from Honda, stating that they "strive for the best" in their sales practices. Yeah, right.

[Motor Trade Insider]

I'm afraid the picture for dealers here in the UK is bleak. It's adapt or die. The old style car selling tactics have been replaced by the the super-slick "retail experience". Dealers who are too slow to pick up on this change will die out, it's as simple as that.

[A. Yelvington]

Dodge the dealer and go to a broker.

I've bought two new cars through dealers. I told them what I wanted and how I wanted it. I got what I wanted, just what I wanted, and at a price that I expected.

Dodge the dealer...

[Doug Korthof]

Having the WRONG CARS on the lot!

There's no excitement: these gas Internal Combustion behemoths are just boring, boring, boring.

GM had a chance to build on its exciting EV1 all-electric plug-in car, but chose to concentrate on Yuckons, Dingalis, Suburbodons, Dummers, Tacos, and other BORING big-iron gas-guzzlers.

Chrysler is even worse! Imagine getting excited over a car called THE NITRO???

And Ford, with its 17 mpg 1953 Ford pickup, copied from a 1930 tractor, also has BORING offerings.

Nothing with a "wow" content, nothing new, nothing 21st century, nothing except oil-burning BORING stuff that could have been around 30 or 70 years ago.

[Tom Williams]

After looking at all makes of pickups, I found a dealership in Dinuba, CA, Jim Manning Dodge, that was such a breath of fresh air, I was so surprised at their just plain honesty. My prior purchase was a Cadillac in Seattle, WA which was a nightmare.

[Jim]

Root canal is right. I just bought a truck for my son and had to go through the dealer gauntlet. Most did the old story of "this is such a good deal that I have to get my manager to approve it", or, "how can I get you into this car". HEY! I just want a price and I have a checkbook in my pocket - I'm going to pay CASH, NOW!
I finally did find a young salesman who said an "about" price and confirmed it with a slightly lower one. Sold, took me 25 minutes with him and I'll go back when I need another vehicle.

[Bob]

Was just car shopping and went to a NIissan dealership where a friend of my brothers worked in Goleta, CA.
Was locked in a room; sales office, dealer took my keys, sales manager; dressed in leather coat and orange pants and shirt, tried to hard sell me. Held me for 45 mins and all I wanted to do was look and get a quote. Though I enjoyed my first Nissan, I will never buy one again.
I needed a shower after the whole experience.

[Jake]

Buying a car is so painful and i feel like I've dealt with the slimiest people that I only buy a car once every 8 to 10 years as opposed to the every 3 years that I would like to. You would think that the high-end car manufactures would figure it out but they haven't.

The last time I bought a car, I walked into an Audi dealer in Norwalk, CA and I was told the I had terrible credit when in fact I had an excellent credit score and as a result was going to be charged an interest rate of 9.5%. They also told me that there was only $1k in profit on an MSRP price of a $40k car and that they could only give me 50% of dealer trade in on my existing car.

After an hour and a half of negotiations going no where I said I need to leave. As I was trying to walk out they offered to drop the price another $2k, reduced the interest rate and were willing to give me 75% of dealer trade in. This was close enough to the deal I wanted that I was willing to act, however at that point I had been manipulated and lied to so many times that I didn't want to give them my business. So I went and bought another Audi from a Los Angeles dealership. I bought a car over the internet, financed through my bank (5.9%) and sold my car myself (almost as painful as buying a new car).

Hopefully in 8 1/2 years from now the experience has changed or Acura is making a car that I really want to own.

[Richard Cabeza]

I had the best experience purchasing a new car in Sonora CA. Mother Lode Motors was the most professional dealership experience I have ever had. The sales staff was knowledgeable and friendly. They didn't push and grind me into a purchase. They had just what I was looking for. Thanks.

[james]

A little over 5 years ago I decided I was going to buy a Honda Insight. Went to the local dealer, whose salespeople wouldn't even admit that Honda made the car. So I bought one used, on eBay. Saved about $12K off the list price, and 5 years/80K miles later it's still running strong and averaging over 70 mpg :-)

[Sean]

I work at a car dealership and will definetly agree that it's not always easy buying a new car.
I've sold cars for about 4 years now and when my girlfriend was ready to buy a new car she wanted a vehicle my dealership didn't carry.
After spending countless hours on the phone with many different Internet sales people (that's what I do), I finally went with a scion for her. Every Mazda/Toyota dealer I spoke to on the phone was very rude and made me ashamed of how people view what I do for a living.
I finally got so tired she ended up with a scion, partly because of their pure pricing and you get a lot for the money.
I've always tried to make it as easy as possible for a customer when I'm helping them but can honestly say I see where some people are coming from with their gripes about how they are treated.

[Phil Peterson]

In the olden days, Rambler Motors made all their salesmen achieve MBA's and that made the world of difference in customer service. Often they were so good and kind that many customers would add 5% to the purchase price to let AMC motors know how good they are. Cadillac had a reputation of stealing AMC salesmen and for this reason. Now that Rambler is defunct, I don't buy any cars anymore. And besides, the newer cars require synthetic oil which causes pistons to rust.

[nickmagoo]

Who buys new cars? What a rip off they are...I bought a Toyota Matrix - 2 months old, barely used and saved over $5,000. It was a piece of cake - walked around, test drove 3 cars on the lot, picked the Matrix (with complete warranty), and went home happy.

[BmoreDealer]

Things are bad in many dealerships and need to be improved -- no argument.The consumer often forgets (or does not care), however, that the sales consultant they spend hours with depends on them for his/her livelihood. The vast majority make NOTHING if the consumer doesn't buy the car from them. That in no way excuses unethical business practices. But losing a deal over some small amount of money to a dealer who does nothing but beat your price is demoralizing and manifests itself in bitterness and cynicism towards the consumer.

[Frankenbike]

The last three cars we bought, plus my sister in law's car, had the same unpleasant experience.

We buy cars we can afford to pay cash or write a check for. We could not get the dealers to give us a price. Instead they'd ask "How much do you want to pay a month?"

"Nothing." We'd reply. "We want a price on the car, and we'll decide if we want to pay it." Every single time it took up to an hour to get a price on the car.

And on extended warranties, the dealers always wanted to steer us away from the one offered by the manufacturer, in favor of some no-name (to us) plan.

Also, in every case, we couldn't get a price commitment or serious offer from the dealer until we were walking off the lot and getting into our cars. The process is so painful, that we don't even contemplate buying new cars until our current ones are almost non-functional.

We've continued off the lot every time. Sometimes check out other dealers, sometimes not. But when we return, we say, "If you screw around with us for one second, we don't come back. Understand?"

[BarkBark]

After several bad experiences with smarmy car dealers, I quit dealing with them in person except to test drive cars. From there on out, I've forced them to negotiate through email - nothing over the phone or in personl. That way, everything is on paper and everything has been worked out. All I've had to do is sign the papers and drive away. It's worked pretty well and I've gotten a couple of very good deals.

[danove]

When I was visiting Minnesota I found a used pickup I liked. Made an offer and they said, "No, we're a fixed price dealer. We've set the price as low as we can go." I said I would have to think about it. They said, "Fine, give us a call if you're interested." I left, a little chagrinned, but came back the next day and bought it. Maybe paid $1000 more than I would have from a private party, but they have to make a living. Don't know how many there are around here, but I hope I can find such a dealer next time.

[perks]

I've had many miserable car-SHOPPING experiences, but never--not once--have I had a miserable car-BUYING experience. My opinion is: if you're going to treat me like an idiot who doesn't know their tactics, you're not getting my business. I've never bought a car from someone who made me the least bit uncomfortable. Between my wife and myself, I buy a car every 1-2 years, so if you're an excellent dealer, I could easily give you $100,000 worth of business over the next few years. If you're slimy, you've just lost out big-time.

Best tactic I've found: find the car you like, and then haggle over the phone or through email. You're still haggling, of course, but it's on your terms and you can do it at your own pace.

Of course, it also helps to know the local market: Last month I purchased a slightly used vehicle from a dealership in Victorville. Because the economy is so terrible out there, they were absolutely desperate to move any vehicle off their lot, and I made sure they knew I knew that. I scored a much better deal than I could have scored in a more affluent area, and they even drove 100 miles to deliver the car to me personally. We signed papers in the comfort of my own living room.

The auto broker is an interesting thing. I went through Cars Direct once, because the model of car I wanted was very difficult to find in the color I wanted. The Cars Direct rep was nice, and he found exactly the car I wanted at a dealership that turned out to be quite a respectable place. However, somehow the paperwork got a bit screwed up between them and I had both the dealer's finance guy AND the Cars Direct guy calling me requesting that I write them a check for a service plan that I had already paid for, in cash, at the dealership. That was annoying, but I would certainly entertain using them again if I couldn't find what I wanted myself.

[Larry B]

People should be very careful when trading in a vehicle in this economic climate. Many dealerships that sell domestic makes are not making it. Many of these mega dealerships are not paying the balance on your trade in and then file bankruptcy leaving customers responsible for the balance. I have owned almost every brand and worked as a mechanic for ten years. Three words you should keep in mind when makinga purchase, Toyota, Honda, Nissan. If you are looking for reliable basic transportation avoid the big three nothing has changed.