Sales Ethics: An Ethical Dilemma In Car Sales

September 29, 2010

During a particularly grueling period when I was establishing myself in car sales—eventually becoming Internet Manager for a major car dealer—I relied on a good friend of mine to help me through the treacherous ethical waters of my new-found profession.

We all know that car dealers have a bad reputation for good reason. When I started in the industry, many of my friends thought I was crazy. They knew that after completing a successful career as a broadcast journalist, I ran three of my own businesses. Later, I spent time working with non-profits and focusing on service rather than profit.

Yet here I found myself, not just selling cars for a major dealer, but thriving at it. Some people believed that by definition I must be acting improperly and furthering the plight of my customers. In truth, as a Nine type on the Enneagram, I loved the balancing act of finding common ground between my customers and the management team I was answerable to.

In fact, I found myself using my well-honed persuasion skills on my Sales Managers as much as on my customers. However, there were times when ethical questions arose and I needed help. It was then that I contacted my good friend Roger. Roger was a bit older than I. He had spent 20 years as a Jesuit priest, then another 20 years as a high-level business consultant to major corporations coaching executives to implement emotional and spiritual intelligence in their world of decision making. I jokingly referred to him as my personal ethicist. It wasn’t far from the truth.

An Ethical Dilemma

The first major ethical quandary I encountered came shortly after I was fully trained and certified by the manufacturer to sell their cars. I had only recently begun negotiating my own deals, and this night I found myself working with a retired schoolteacher who wanted to trade a late-model, low-mileage, high-end SUV for a more modestly priced new one.

The problem was that, when I tried to put myself in her shoes, the deal didn’t make any financial sense. She was losing far too much money on the trade, and she wasn’t even trying to negotiate the price of the new vehicle. Her net cost after the dust settled was outrageously high. I not only felt bad for her, but to compound the issue, I had three managers breathing down my neck watching every move I made.

At one point while negotiating, I was called in to the Sales Manager’s office where I found myself surrounded by all three managers on duty. We literally formed a huddle and the manager in charge said, “James, I’m going to let you try and close this deal, but whatever you do, don’t blow it. There’s a lot of money riding on this. Your commission will be more than you ever dreamed you’d get. Make sure you close this deal with as much profit as possible, but don’t get her so upset that she walks out.”

Thrown Back in the Game

I was told to get back in there and fight harder to get her to agree to the extremely low trade value she was given on the “first pencil,” or first offer from the dealership. We already had a ton of profit in the deal: full sticker price, accessories, add-ons, and an additional markup just to add more profit.  The initial trade value that I gave her was so low it qualified for the industry term, “stealing the trade.” She was furious with the low offer, but desperately wanted just to get the deal done.

In the end, my perseverance outlasted her frustration and with smiles all around the manager’s office, I closed a deal that boasted the highest gross profit the dealership had seen for months.  My managers were correct that my commission on this one sale was more than I thought possible. But oh, what a pickle my moral compass was in.

I needed ethical help. I called Roger. More on that conversation tomorrow.

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