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

[George Bishopric]

The dealers should be lined up and shot. They make purchasing a car torture, and are entirely dishonest.

From the false prices in adds, to the "obligatory" marketing fees tacked on after negotiations are complete, they are simply hucksters.

I can afford about anything I like, but of the 23 cars I have owned, two have been purchased new at a dealer.

Horrible people. Just awful

[candidatesRfaygots]

i could swear car salesmen are all running for public office

[Eric]

So I've enjoyed reading everyone's comments. I have bought cars new and used, and from both dealerships and private party. Everyone has opinions about what make is the best and what is not so great. With that said here's my two sense. Everyone likes a little competition right? Well that's what happens in the car business. Between sales people and between dealerships. It hasn't been a secret anytime lately that sales people work on commission, so if you plan on going to a dealership plan on someone trying to sell you a car. Some are more hard selling than others. Its not McDonalds where you walk up to a counter place your order and pay. That takes no knowledge or skill at all to do that job. And to think that the salesperson you work with wants the experience to be awkward, tiring, angering and unpleasant is just retarded. They want it to be as smooth and easy as possible. Maybe you'll go back and buy another car from them 3 or 4 years later rather than say you'd never consider that make ever again. It's a customer service position. What if you went to a dealership with a general interest in a certain car but didn't really know a whole lot about it. Well then you'd be the majority of consumers. Would you just say "gimme your lowest price on that car", or would you prefer to spend a little time and have this person who actually knows the product go over it with you so it made sense? Now of course this is the age of information. Everyone Knows what "invoice", "msrp", and a second sticker are.....Right? Say you go to one dealer and ask for the lowest price and they say $500 over invoice, but you hate the sales person and they don't know sh*t about the product. Now you go to the other place and the salesperson is great. Their knowledgeable, go over the car and show you how everything works and it seems like they enjoy what they do and you enjoyed the experience. But when the negotiating comes they say $600 over invoice. Are you going to say thanks that was really great and informative but now I'm gonna drive back to the other dealer to save $100 on my $50,000 purchase? Only if you're not a human! People pay for good service don't they? Or when it comes to cars there's just this greasy sleeze ball stereotype burned in our heads. What about all the crooks in the government who have been raping you of your tax dollars to pay their pensions? What about that? The old school car days are over. Most sales people at major dealerships have ongoing product training and are very professional and respectful. And on a different note, everyone makes car payments weather it be 1 large one or 84 small one's. Seriously about 90% of consumers finance their cars. The need to exclaim "I'm paying cash" just screams "I'm insecure and need to flex my wallet because...". Its no different. You're buying the same car at the same price as the person who's financing. The car business can be rewarding for a consumer and a sales person. I would know, I'm a car sales professional, and I'm also a consumer. And when I buy cars I pay cash but I do it very casually. Because the business has been very rewarding. So next time you encounter a car sales person give them a break. You brought yourself to their dealership, they didn't bring you

[Old car guy]

I've been in the car business for quite a while now an have made a few observations.

1. Buyers are liars - consumers lie just as much as the dealers they complain about if not more. About thier trade-ins, what they earn, what other dealers say, etc
2. Every broker I have sold a car to makes money, a lot of money, on each deal. Why would you pay another middleman a profit?
3. I have told people not to buy a car. It was not a good financial move for them. Too much negative equity. They went elswhere and found what they wanted to hear and bought. I lose in being honest at times.
4. Just because it's on the internet does not make it true. Kelly Blue Book, Edmunds etc may give you a value but they do not buy any cars, ever. A trade in is worth what someone is willing to pay...not a penny more.
5. A car that gets an oil change once a year, has never seen soap let alone wax, has been hit more times than Joe Louis, is not "perfect" or in "excellent condition". Really!

Finally, salespeople are people just like you, trying to make a living while avoiding liars and cheats. Let's bitch about politicians instead.

[LPB]

Doug K, you found the EV-1 exciting?

Yelvington has the rihg idea though, "Dodge the dealer". Don't forget how lucky we are to have the internet these days!

You can send out blanket requests for quotes, particularly if you're leasing, and specify what terms should be in their response.

Cull the ones who can't comply with your simple request, and see what's left.

Then pursue your deal.

Infintielly easier than it used to be

[AussieNorm]

I totally agree with the comment on negotiation via email. When you know what you want, examine the inventory online at various dealers, send an email with the price you will pay and what terms. You still get the bombarded with the sales pitches for extended warranty, etc but if you are prepared for it you can repel that with a verbal and visual "No way"

[Denise Patton-Pace]

After comparing this article to the original J.D. Powers release, it appears that Joni Gray took editorial license to the extreme and jumped to an inappropriate negative conclusion. The Power’s release basically states that the top two “issues” people have when purchasing a new auto is that they buy from dealerships offering the best service and that have their desired car in stock. Makes perfect sense, nothing negative there. And, what about the salespeople? Automotive Retailing Today (www.autoretailing.org ) trends buyers’ opinions of their overall purchase experience, including their interaction with dealership salespeople. Unlike this snapshot survey, trending follows the consumer psyche over time. Trending of new car buyers demonstrates that they found their salespeople to be respectful (93%), consistent (93%) and willing to reach a suitable agreement (89%). A far cry from the message insinuated in the hokey photo accompanying this article.

[John Isaac]

I have been saying this for years to car dealers. The more consumer voice their opinion the better is will be. Some dealers don't think they have a problem. Voice your opinion at www.mydealerreport.com and http://twitter.com/MyDealerReport

[whipping post]

So depressing to see such hatred from some posters, but it's common. Line all dealers up and shoot them? You sir, sound like a person easy to deal with, lol.

If you are being treated rudely by a Sales Rep, something made them act that way, what was it? We only get paid if we sell something, otherwise we get $0, absolutly nothing. Profit is not a four letter word. We are here to sell cars, so trying to get you to buy is not rude, it's our job, and why you stopped by in the first place.

If you are dealing with a Sales Rep. who is truely a jerk, ask for the Sales Manager. They will pretend to kiss your butt, then put another Sales Rep. on the deal. You can also go to another dealer,
Remember, if you get treated bad at EVERY dealership... It has gotta be you.

We get the attitude alot, and the lies.. the other dealer will give you a price so low they will lose thousands on the sale, right, I know those guys, and where they price the cars. It's my job to know the market value of our cars, and your trade in, you should as well.

Car Brokers... My dealership will not deal with them. We will not sell a car to a Broker, so that takes it out of the picture totally. If you want to pay more for a car, and have no contact at the dealership to help you if you have a issue down the line, have a buddy buy it for you! :)

Financing... Do you know your credit score? if so, what Teir does that place you in? Find out! Go to your bank and get the best rate you can, then go to the dealer and see if they can beat that rate. If you do that you will get the best finance rate YOU qualify for.

I have had people come in and say " I would never buy a car from a dealer, but I would like to ask you about the car, and take a few for test drives." Don't ask someone to work for you for free, you get what you pay for.
If I am off the floor with a "Stroker", I cannot get a customer that will buy, and that takes food, and clothes, away from my family.

If you are asking for something, please have a clue as to what it is worth! Yesterday a customer wanted us to cut the price of a heavily reduced car further, so her payment would be $325 a month instead of $374. I said we might have a couple hundred of dollars to work with but not thousands. She replied " I'm not asking for thousands!" She was! How can you not know that?
Also, the cost of something is not determined by how much money you have. If you only have $20,000 to spend on a car, don't try to buy a $30,000 car and say "But I only can afford $20,000!" Do you go to a steakhouse and say "I want a steak, but I can only afford a hamburger, so charge me for that."?
Beside buying a house, buying a car is the biggest financial decision most people will make, so do your homework, and know what you can afford.

The people that are nice to work with, will get the best deal, as I am not fond of abuse.
Honestly, if you shopped a couple dealers in your area, you should find only a few hundred $ difference, at most.

Now USED cars, that's different. Nobody knows how much the dealer paid for the car, so you don't know how much profit the dealer is making. Unless we are talking about a 10 year old, $2000, beater, I would not buy a used car, unless it still has some factory warr. left, and the dealer has put a extended warr. past the factory ones.

Jack wanted to know about the Extended Warranty, and Extra Insurance. For the Warranty, that's your call. How long are you keeping the car? how many miles will you put on it in a year? Sometimes it makes sense, sometimes not. Gap Insurance pays the difference between what your regular insurance pays you, and what you owe to the bank. If you have carried some negative equity over from your trade-in, this is a good deal, and can save you thousands (over $7,000 to one of my customers, who was in the same model car in a week with alot lower payment now. without the gap insurance, she would be thousands in debt, with no chance of getting a car loan.)

[rdj]

I bought a Chevrolet HHR fro Weseloh Chevrolet in Carlsbad CA. The salesman was Fred Wright. He was such a pleasure to deal with that my family now has 5 cars from him. Keep up the good work, Fred/Weseloh

[Elsie]

Mine is worst. I was so happy to by my 2007 Acura TLS that a lease was my best option. I later went to the deal with a buyout from the Credit Union. They told me that they had a better deal which they did. However, it was a mistake that they put in the paperwork to refi a new car instead of a used. So the interest rate went up. I came in signed the deal only to be told later that the interest rate increased even more. To put a twist in the whole deal they have paid off my car loan and I hold the title so they really want me to signed the paperwork. Should I? Or should I give the car back? What happens to the money that I originally put down on it?

[FRE]

Four years ago, I bought a new Mazda 3 here in Albuquerque. The salesman was OK, but after the test drive, he referred me to the sales manager. The sales manager told me that he'd be with me shortly, then he walked into his office and got on the telephone. Fifteen minutes later, I was still sitting in a chair on the sales floor, waiting. I left and bought the car from a more remotely located dealer, and sent the first dealer a fax stating why I bought the car from another dealer. There was no reply to the fax.

The fact that I had recently returned to the U.S. after living in another country for 10 years, had no credit rating, had no telephone listing, and was temporarily staying in a B & B could have been a factor, but it shouldn't have been since I stated that I would pay cash, and did pay cash when I bought the car from the other dealer. I suspect that the first dealer thought that I was a con man of some sort.

[Dan Grant]

The fact is that both manufacturers and Dealers have degraded the job of Salesperson to the point that you might just as well be ordering a big mack at the drive in window. In 1971 as a salesperson at a VW dealership I made $30,000.00 as a professional sales person who was required to have a complete knowledge of the vehicals I was selling. Manufacturers and Dealers have come to believe that the job is only worth moron pay so morons are what they get. 37 years later a salesperson is lucky to make $50,000.

[Jordan]

My father swears by this process. He's bought two cars, as good deals.
http://tinyurl.com/ntvjp2

[Neil]

We got our latest car 9 months ago, we're planning to hold on to that car for at least 10 years if all goes well maybe 20 years so we don't have to deal with another anoying car sales person. Will that car make it 20 years big time, Ok so maybe we'll have to visit the showroom to replace our other car, maybe but we're gonna give it our best to stay away period. By the way we had only one instance we really regret the experience it happened at a Nissan dealership, The car we got was less than satisfying and the time we spent at the dealership was bad too, so for me/us no more visits to a Nissan dealership ever.

[Bodybuilding Supplements]

Car Dealers are worst then Real Estate Agents in my eyes. Regards,

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