Top Mistakes Car Dealerships Make That Hurt Customers and Sales

Everybody in car sales gripes about customers. But dealerships aren’t run by angels. Far from it. We know we have a terrible reputation-one that’s been earned over many decades of bad business practices. Those practices need to change. Here are just a few of them.

Lack of Training

I was lucky when I started out in car sales. I worked at a family-owned dealership in a small town. The general sales manager was a decent guy who treated his people fairly. Surprisingly, management believed in training their sales force. The first week I was there I was told to read up on all the cars (they still had paper brochures back then) and get in the vehicles and drive them. The second week, I was supposed to follow a seasoned salesperson around and watch the way he interacted with customers. For two weeks I wasn’t allowed to say a word to a customer. And I wasn’t allowed to “up,” or greet, a customer until I had completed my training.

When I left that dealership, I discovered this kind of training is practically nonexistent at other places. At most dealerships, training consists of pointing at the lot and saying, “There are the cars, there are the customers, now go get ’em.” That’s it. They don’t even tell you where the restrooms are. So if you go to a dealership and the salesperson can’t even answer your most basic questions, this is why. The solution? Dealerships must start taking training seriously.

Power Is Too Centralized

Practically every decision in car sales is made by a sales manager. Your salesperson can’t decide anything on his or her own. They must first get permission from a sales manager. They can suggest things, or influence a deal, but that’s about it.

This creates a huge bottleneck. At least half of my time is spent waiting to talk to a sales manager so I can get their approval to do X, Y, or Z. The result is, on a busy Saturday, you’ll find half a dozen salespeople standing around inside the “tower” waiting for one of the managers to get free before they can even ask them a question. Unfortunately, a lot of the time the managers aren’t the least bit concerned about you and your car deal. They’re too busy shooting the shit about the football game later that afternoon. So, if you’re wondering why it takes so long to buy a car, this is a major reason. The solution? Empower the salesperson.

Stop Training Customers to Beat Us

I remember a woman who came in to look at used cars one day. As we walked across the lot, we got to talking about discounts and she said, quite seriously, that she expected $5,000 off “just for walking through the door.” I told her she must have walked through the wrong door. There was no way we could give her that kind of discount on a used car. She laughed as if I had just told a great joke and said, “Oh, that’s just where I start!” then added that if we couldn’t do any better than that, there was no point in her wasting her time. I agreed and escorted her back to her car. I think she was surprised that I didn’t argue with her and let her leave.

Why are expectations so unrealistic? Why do they always beat us up over price? Because we’ve trained customers to do just that. For the past 75 years or so, car dealerships have made it all about price. There’s even a saying in sales that “price sells cars.” If you look at the typical car ad, what do you see in big red letters? SALE! SALE! SALE!

Low, low rates! We’re slashing our prices! Everything must go!!!

Those of us in the car business have conditioned customers to expect huge discounts. And if they don’t get their discount because of this new thing called market-based pricing, they think we’re cheating them.

I’m guessing this mentality began with rebates. Rebates date all the way back to Henry Ford and the Model T. But rebates really took hold in 1975, when baseball player turned announcer Joe Garagiola announced during the Super Bowl that Chrysler would be offering-gasp-$200 to $300 back on all its new cars.

Holy heck, Martha! They’re going to bribe us with cash to buy their cars!

When I first started, Honda was offering $10,000 off Odyssey vans. Think about what that said to consumers, who started to believe there must be a lot more markup in cars than they thought. But there really wasn’t. The dealer was being reimbursed for the rebate by the manufacturer. Honda dealers were actually selling the vans at full price. But with everybody offering $2,000 to $5,000 in rebates on top of discounts, the product lost its value-and consumers came to expect huge discounts all the time.

The solution? Car companies should stop putting crazy rebates on cars and shift the focus back to value, not discounts.

Resistance to Change

My stepfather sold Pontiacs at Doug Willey Pontiac in Birmingham, Alabama, in 1968. Believe it or not, there are dealerships all over the country still selling cars the way they did at Doug Willey back in the ’60s. The same meet and greet, the same needs analysis, etc. The only difference is now we can check your credit in seconds. Back then, before Equifax or Transunion existed, a sales manager would have to pick up a phone and call somebody’s landlord and ask, “Does Joe pay his rent on time?”

Take the reliance on paper. While the rest of the world has gone digital, car dealerships are busy deforesting half the planet for the paper needed to complete car deals. In 1968, you needed two sheets of paper to sell a car-and they fit in a little manila envelope called a husk. Today you need a wheelbarrow to carry the average deal jacket around. It’s ridiculous. Dealers could easily eliminate 90 percent of the paper used at dealerships, but they just don’t want to change.

Stop Playing Games

It’s hard to believe in this day of iPhones, the internet, and AI, but there are still shady dealerships finding new and creative ways to mislead people. There are so many ways they do it, I couldn’t possibly cover them all in the limited space MotorTrend gives me, but here’s an old one that’s still around.

Sometimes you’ll see a commercial that advertises a vehicle below-way below-MSRP. So far below, you think the ad must be a mistake, or there’s a catch. Well, you’re right. There is a catch. Dealers can’t get away with blatantly lying to people in ads anymore, so they order two or three stripped0down models from the manufacturer just so they can advertise a crazy price and not be lying-technically. Once you see it, you’ll say, “No thanks!” But you can’t accuse the dealer of the old bait and switch, because there it is-the actual car in the ad. And they will sell it to you at that price.

What’s the point of an ad like that? To get you in. Once you’re there at the dealership, the salesperson will bump you to a more expensive model. And it works. Sure, some people get angry and leave, but some stay and buy. That’s why dealers still do it.

Will car sales ever change? Yes. It’s changed a lot in the relatively short time I’ve been selling cars. A lot of the old-school salespeople have passed away, replaced by a younger generation. But it will take a concerted effort on the part of everyone who works in sales to change things for the better.