I don't know about you, but I am getting tired of hearing about transparency in the car business. We are supposed to have everything spelled out and on display. Dealerships should have every price, every charge and every option is written down, explained and priced so customers can see their options.
I believe we tried that before, that's why all the cars have prices on them. They are right there on the window. But car buyers did not like that. Then there were incentives that they could take off the price of the car and that wasn't enough. They asked us for prices on warranties, accessories, and insurance and we gave them prices. Car buyers didn't like that either. They wanted to know finance rates and we gave them the rates, but that wasn't enough. We gave them all the information they asked for, isn't that transparency in the car business?
When a consumer buys a car from a dealership all the information is spelled out in a buyers order. We display the price, license plates, sales and appropriate taxes. All the accessories or additional options are spelled out and priced. If there are any warranties, insurance or fees they are also listed out in the order. I thought that was transparency in the car business because they get to go over every line before they agree and sign their name. If they finance they must sign a contract that details the finance rate, the number of months and the payment.
What is Transparency in the Car Business and Why
I went to an appliance store the other day looking at refrigerators. They had a great selection and each and every one of them had a price displayed on the front door. Some models were marked with a special sale price and others were not. I looked around the showroom to find a model that fit my needs, wants and budget. When I found one I told the salesperson that I would take that one. It looked good, had sufficient space and a price that would fit my budget. I knew I would have to pay sales tax, so I did a quick calculation in my head to confirm my budget allowance.
My salesperson writes up my order and asks if I want the ice maker? I said yes, I want the icemaker, I saw it inside the refrigerator. My salesperson told me that an icemaker is an option shown on the floor model. What are you saying? The ice maker is additional $110 says, my salesperson. There goes the budget, but ok, I like ice. Then they tell me that delivery is another $65 and if I want the ice maker hooked up that will be another $50. Now if that's not enough they pitch me on an extended warranty. All that and you talk about transparency in the car business.
Well, I bought the refrigerator and most of the extras. However, I didn't sign or pay for anything until I knew and understood each every charge. You can bet that I didn't drive home bitching and moaning about being tricked or talked into buying that appliance. And I can assure you that I didn't go online a write a review about being ripped off. I was quite surprised with all the extra charges, but I agreed to pay them. All of the extra charges and options were not posted on the wall or the counter. So why do always talk about transparency in the car business all the time? What about furniture stores, appliance stores, contractors, the handyman, etc…
What's next for Transparency in the Car Business
Some say the public is looking for an Amazon type experience. We can do that quite easily, but will that be the answer to transparency in the car business? We practically have that now.
The customer visits the dealership and picks out a car. Test drives the car and decides that is the car they want. The price is on the window (either discounted or list price) and then decides on cash or finance. Then we apply manufacturer incentives. F & I run their credit and show them the rates based on their credit score. We offer them options and accessories and the prices. They choose options and accessories if they so desire. We print the paperwork, collect their downpayment, have them sign for their purchase and they drive home. Sounds like transparency in the car business to me.
The only difference with an Amazon experience is that they can't test drive their car, it won't be shipped to their home and they won't be instructed on the proper operation. The won't receive a first class delivery by a professional. I don't know about you, but I am not buying a car without driving it first.
Ok, I got that out of my system. We have been hearing about transparency in the car business for several years and I have kept my mouth shut. But today I just had to have my rant. Maybe I went a little far, but maybe not. Nobody buys anything without having the option to examine the price and either agree or disagree. There isn't a dealership or a business in existence that won't supply their customers a price when asked. So why is the car salesman and the car business the bad guy? Purchase details are open, spelled out and nobody is forced to buy a car unlike the dealer practices of years ago.
Thanks for letting me rant, that felt good.
Later, Fresh Up on the Lot