Sales Tactics: Good Dealers Gone Bad

By L James Johnson

L James Johnson

Contributing Writer BIO

L. James Johnson joined the automotive industry after winning recognition as a radio & TV journalist and running three thriving, fast-growing small... More

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1 1,052 views Oct 6, 2010

Have you ever wondered why it can be such a frustrating experience negotiating price for a new car at your local car dealership? I learned first-hand when I was Internet Manager for a major car dealer what dealers do that can make the process so frustrating for consumers. After all, most car buyers simply want to make a car deal and know they are not getting ripped off. Yet, their experience is often much different than that.

Don’t Leave Money on the Table

Dealers loathe leaving money on the table. They expend every effort imaginable to make sure they get every dollar possible from every deal. And they do this every day, morning till night.

Dealers use a pricing strategy when selling used cars to make sure that the market determines the price of the pre-owned car they’re selling AND that they get every dollar they can. Dealers do this for a living and are very good at it. Those selling cars privately tend to make a lot of mistakes in this area. Developing a pricing strategy for private sellers is covered in my new book (see below). But it’s a different process when car dealers sell new cars. It’s a more difficult, nuanced issue for dealers. We already know that it can be extremely frustrating for the buyer.

A Practical Example

When I was a rookie salesperson still being trained, I noticed that our customers frequently got upset during the negotiating process. This was after the vehicle was selected and the test drive was completed.

One sales person in particular often had his customers stand up in anger and frustration and threaten to walk out. He then worked hard to calm them down to get negotiations back on track. I was amazed when this happened more than once with the same customers. Finally, one of his customers got so angry the third time this happened that he stomped out of the dealership. The salesperson ran out after him, and following a heated discussion at the curb, they came back in, sat down, and continued negotiating price. It was painful to watch.

Dumb Questions?

Because I was a rookie “in training,” I was allowed to ask basic car industry questions that everyone else knew the answers to. I had been told that there are no dumb questions. However, I often felt that I was pushing the envelope on stupid with some of the ones that I asked. After all, to me this was an unfamiliar industry with its own language and its own way of doing things. I often felt like a fish out of water.

I was worried my question would be inappropriate when I pulled the salesperson aside after a particularly difficult exchange with one of his customers and ask, “Why do your customers get so upset with you when negotiating price?” Thankfully, he didn’t think any less of me. And his answer made an enormous amount of sense from a strictly business perspective. However, when seen from a humanistic viewpoint, his response was an insightful and disheartening view into the reality of car sales. But it did clear up any confusion I had about why buying a car at a dealership is so frustrating for many buyers.

His answer, and a look through a normally shaded window into the world of car sales, tomorrow.

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The author has just released his new book, HELP! I Gotta Sell My Car NOW! New Rules for Selling Your Vehicle Online. It’s available on Amazon.com.