If you’ve ever walked into a new car showroom, you know that buying a car is quite different than shopping at a normal retail store. In virtually any other retail setting, even those that sell very expensive products, you can leisurely stroll through the showroom, browse dozens of different items, and casually explore their offerings. You can check price tags, you can ask direct questions and get direct answers in return, you can explore at your own pace, and you don’t always feel like you have to justify your presence to sales people. In a car showroom, however, that doesn’t happen.
The usual practice when you step foot in an auto showroom is to have a sales executive or even a “professional receptionist” tackle you right away. They want to know why you are there, what you are looking for, how much you have to spend, and they always want to get as much of your personal and contact details as possible. Even if all you want is a brochure.
The new car dealership has one of the most aggressive sales environments of any retail establishment. Enter the showroom and a sales consultant will approach you. Shake that one and another will appear. Keep rejecting them and eventually a manager will approach you, effectively demanding to know why you are wasting everyone’s time and not buying a car anymore.
If you really want to speak to a sales consultant, or finally give in to their persistent questioning, then a highly structured questioning comes in place. This is designed to obtain as much information as possible, covering all aspects of your personal information and circumstances, all to be used against you when trying to sell you why they want you to buy, which is not necessarily what you really want. The information you provide is recorded in detail and accessible not only by the sales consultant, but also by the business manager (to sell you financial and insurance products), the sales manager, and even the manufacturer. In fact, it’s usually the manufacturers who demand that the information be captured, so they can analyze your responses and bombard you with marketing paraphernalia until the end of time. Your data is compared with that of other customers and analyzed long after you have left the showroom.
Most car buyers find relentless hassles and questioning intrusive and annoying, and they feel it makes the car buying experience extremely unpleasant and uncomfortable. Some manufacturers especially insist on this tough questioning process, and one has the feeling that these manufacturers think that customers should feel privileged to be able to buy their cars.
There are two words you need to understand that drive everything that happens at a car dealership and why the dealership staff behaves the way they do: commissions Y objectives.
Almost everyone you talk to at the dealership receives a majority commission. The sales executive, business manager, sales manager, etc. all receive a relatively small base salary, and most of their earnings come from commissions for selling their products to you. So everything everyone says or does is geared toward you buying your car (and associated extras), because everyone is paid a percentage of the money you spend at your dealership.
The other driver of everything that happens at a dealership relates to sales goals. The manufacturer sets monthly, quarterly, and annual sales targets for the dealership, and the dealership management does the same for each of its sales employees. So there is a complicated combination of penalties for not meeting goals and rewards for exceeding them. For the dealership, missing quarterly sales targets can mean many thousands of pounds of lost manufacturer funds, and for sales executives, missing sales targets can mean losing their jobs. At the end of each month, the numbers are counted, commissions are calculated, scores are reset to zero, and everything starts over.
The other thing about commissions and goals is that they are only counted after the customer has paid for their car and left at sunset, not when they actually sign their contract. So if you order a new car in November 2012, but don’t actually receive delivery until April 2013, the dealership can’t count the sale toward their goal until April and the sales team won’t get paid for the commission. until the end of May: about six months after they actually “did their job” and sold you the car, and more than a month after you received delivery. This is very frustrating for the dealership, so they are always much more interested in selling you one because they are in stock right now, so they can get their hands on your money right now.
The end result of this obsession with commissions and goals is that the dealership staff is desperate to sell you a car from their current stock, with financing, more insurance, plus any number of other extras, because their wages and jobs depend on it. . There is constant pressure on sales people to deliver results, regardless of how many customers actually visit the showroom. When things settle down, sales people are expected to hit the phones, call old customers to try to convince them to upgrade their car, or go after failed conquests to see if they can persuade them to change their minds.
Dealers know that most customers are frustrated by the car buying experience. They also know that this frustration usually causes the customer to run out of patience and agree to buy a car just to stop the entire painful experience. So instead of trying to make the customer feel more at ease, they engage in a war of attrition and will do their best to keep you in that showroom for as long as possible, knowing that the longer they have you there, the better your chance of exhausting it and obtaining your signature on a contract.
So how can you, as a customer, get the most out of your car buying experience in such a hostile sales environment? Well, understanding the process gives you a much better base to make your purchase. Every ‘recommendation’ a sales executive gives you should be taken in the context that leads to the conclusion they want, not necessarily the one you want.
Second, if the whole car buying experience weighs so heavily in the dealer’s favor, then you can choose to hire them on your own terms rather than theirs. A professional auto buying agent can deal with the sales staff on your behalf and ensure that you get the best result for your needs rather than agreeing to what the dealership wants.