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Tuesday, October 4, 2022
HomeBusiness & FinanceKeep Your Company Away From Used Car Sales Tactics

Keep Your Company Away From Used Car Sales Tactics



When it comes to the business of selling, I’m usually on the side of the  salespeople, since they get a lot of guff. Some of the nicest people I’ve met are in sales. They’re positive, upbeat, and truly care about their customers.

That being said, there are styles of selling that are, frankly, distasteful and designed to screw as much money out of the customer as possible. And, not surprisingly, one tends to run into those irritating sales tactics when buying a used car.

Over the past five years, my family and I have managed to total four cars and have two cars reach the “not worth repairing” phase. As a result, I’ve been buying cars pretty regularly. Three, in fact, within the two months.

Just last week, I bought one from a local dealer that has a reputation for having a high-pressure sales culture. So I walked into the situation knowing exactly what to expect and I certainly wasn’t disappointed.

I knew exactly what make, model, and year I wanted. And I priced out everything on the web that was selling nearby. I was checking daily, so I knew right away when that car hit the website of the local dealer. It was definitely under-priced.

Car salespeople have a profile of what a car-buying customer looks like: Always look for married couples. So I went in with my 15-year-old daughter, walked into the sales office, and asked about a warranty on a car I’d purchased there a while back. Seeing me as a nuisance rather than an opportunity, the sales manager told a junior salesperson to help me out. Which is what I wanted.

After a brief conversation, I told him I was interested in buying the car I saw on their website. He’s all, “What?” because he’s not expecting that. The salesguy tells me that he wasn’t sure it had been prepped to be “out front,” but I had him check.

It had hit the lot a couple of hours earlier. I tell him, “Let’s go.”

The salesguy goes to see the sales manager and then comes back with a sheet of paper showing what he called, “the Internet price” along with some fees, including a “dealer advantage package” at $795 (stuff like a free first oil change). Now, the main purpose of such packages is to make sure that I get my car serviced at the dealer and they’re usually thrown in for free as a closer. Put a pin in that.

OK, so here’s what probably happened when the salesguy went to the sales manager. The salesguy got chewed out for selling the car at the Internet price rather than the sticker price (which was higher), so the sales manager told him to tack on the “advantage package” to extract the margin they were losing by honoring the Internet price.

I tell the sales guy I only want the advantage package if he throws it in for free. Salesguy goes back to the sales manager, returns with the advantage package at $295. I tell the salesguy, “I want the package for free or I’m going to walk.” And I was ready to walk.

The salesguy goes back to the sales manager who comes over himself. He wants to know why I won’t pay $295 for the package and I just get up to leave. The sales manager immediately backs down and gives me the package for free, providing I pay cash. I say, “Fine, deal.”

I come in later with a certified check. Even though there was no financing involved, the salesguy sends me to “finance.” The “finance” guy was the epitome of the fast-talking salesman. He starts drawing diagrams, explaining about warranties and potholes and whatever. I let him pitch for a couple of minutes and then say: “Cut to the chase. I know you want to sell me an extended warranty. How much?”

This totally threw him off his game, so much so that he goes back into his sales pitch. So I that have to stop him again and tell him to cut to the chase. Finally, he pushes the paper he was going to show me after his pitch, which was, of course, supposed to soften me up to think it’s a must-have.

They wanted $7,000 for a 50,000-mile extended service package…. for a car with 60,000 miles on it. The real number should have been around $2,000 and even then I wouldn’t have bought it because the car has a lifetime powertrain warranty. He says it doesn’t, so I make him check the website. Yup, there it is.

Finally, he gets the sales paperwork ready, but there’s something missing: The advantage package I’d already negotiated. He’s all, “Let me check the paperwork” and then reprints the documents with the package included.

So now I’m good to go. As I walk out, the sales manager greets me at the door. By now, he knows that I negotiated a very low margin sale so he says, not too convincingly, that he hopes I’ll be a lifetime customer. Yeah, right.

Unfortunately, these high-pressure sales tactics work on many people. Nevertheless, high-pressure selling is, long-term, a go-out-of-business strategy for car dealerships. Here’s why:

  1. There’s no way I’d recommend this dealer to anyone else unless I was there to shepherd them through the sale.
  2. When these tactics do work, customers usually figure out sooner or later that they’ve been snookered and resent it.
  3. This sort of nonsense is why car salespeople are almost universally disliked, which makes it harder to sell cars.
  4. The overall effect is to drive more people to shop online (like I did) rather than come into the dealership.

In other words, if dealers don’t start adding value to the selling experience rather than making the experience into a tiresome contest, online sales will clobber the dealerships.

Takeaway: It’s time for high-pressure sales tactics to go the way of carnival barking. They’re obsolete and ultimately self-destructive.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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