I’ve joked about this with people.
Go ahead—type in a Google image search for “car salesmen are…” and look what pops up. There is a guy…
wearing a red and black checkerboard blazer, a cigar dangling from his mouth, a pencil-thin mustache under a big nose, and a giant diamond ring flashing on his pudgy fingers.
Used car dealers have a reputation as being sleazy, scummy, thieves. Some of that is deserved.
Back in the ‘50s, ‘60s, and ‘70s, when dealers and their salesmen did whatever they wanted, the reputation thing didn’t matter as much. Sleazy car dealers got away with things.
But in the Internet age where reputation is so important and widespread, you can find out a lot about our business. Any business. Things have changed. Unhappy and happy customers go online and tell about their experience—good and bad.
Car dealers have a reputation to worry about. The stereotype of the sleazy car dealer is pretty well unwarranted these days; some of the best people I know are in the car business.
Another thing to consider is that buy-here pay-here dealerships have a reputation for only carrying over-priced, bad cars.
I wrote about that on an earlier blog about how much more of the car we carry than a typical buy-here pay-here dealer.
Back in the old days whatever money dealers got for a down payment on a vehicle was probably about what the dealer had invested in that car. That was the reputation they had years ago. But the industry has evolved over the years; that’s just not the case anymore.
I’ll explain what I meant when I said that the down payment was about what the dealer had: let’s say the buy here dealer paid $2,000 for a car. Then you came in to buy it and they asked for a $2,000 down-payment from you before they would agree to finance you. So all that dealership did was finance their own profit.
As a result, they could sell to and finance everybody who came in to buy a vehicle because they got all their money up front. They also waited for somebody to miss a payment so they could repo that vehicle, put it back on the lot, and start the whole process again.
But with competition, the much-needed evolution of the industry, and between associations and legal issues, the industry has changed a lot in the last 30 to 40 years. Those kinds of dealerships just don’t survive anymore.
The misperception about dealers who will actually sell a vehicle to you because they want you to fail so that they can repossess it and resell it, is unfortunately not a myth.
It’s derived from the exact thing we were just talking about. Back in the days when a dealer had a car, they had $2,000 in it, they could get $2,000 and finance the rest of their own profit.
(Continued in Part 2)
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