Auto makers are failing and the car business has always failed us!

January 15, 2009 · Posted in Big Business Ripoffs, Featured, Financial Crisis, Social Issues, Things to think about, Thoughts on the economy, Topic Blogs 

I don’t think the failing automakers is totally a result of poor management, lack of innovation, or lack of faith in American made vehicles.  I think the issue goes deeper than that.  It starts at street level where the real dealing and car buying experience takes place.  With the advent of an internet market place, the car lot mentality is losing its appeal and frankly- I think savvy consumers are f**** tired of dealing with an archaic and crooked method (and might I add one of the main ways) of purchasing a car.    I do know people who have bought cars online through Ebay and Cars.com. The problem is that you rely entirely on the description and faith in the entity selling the vehicle, granted there are warranties involved, but you don’t get to see it, smell it, and sit in it.  I personally would have a tough time buying a vehicle online for that fact alone – I need to feel the controls.

I know this is an old cliche, the slimy car salesman, that pushy odd feeling when you walk onto a car lot hunting for a new vehicle.  It sucks, it really does.   It’s almost a science to learn the correct way to barter and deal with salespeople.  The cars are always marked up from their invoice price, if you didn’t know that you need to learn.  Besides the invoice price always being this hidden top secret price, most car dealers will always act like they are one step up the ladder on you.  What I mean is that no matter how much research you do, how much you learn about the car you are buying or trading, the dealer will somehow try to refute the information or pass off what they have to offer as being much better than anything you discovered yourself, it’s quite frustrating and makes you want to leave.   Which by the way, is a great tactic since the last thing a dealer wants is for you to walk out the door, they outright lose you and the potential sale.

Car dealers are a breed many will not understand.  There is a local example of a Kansas City family who has been in the car business for years- and most of that time it has been spent breaking the law, defrauding customer, and spending time in jail.   The Franklin family has been screwing over KC car buyers for a long time and their methods are quite humorous – and in the same light sad and pathetic.   To keep this short, the father’s name is Pete Franklin and he started this family legacy of filth.  He was famous for airing these 60 minute infomercials, yeah, 60 minute infomercials on local KC stations to sell his cars.  It apparently worked because he opened multiple locations throughout the city and raked in about $45 million in sales each year.

His legacy continues with his sons, Jeremy and Chad.  Now this gets downright ugly and exemplifies all that is wrong with the business.  They say the apple doesn’t fall far from the tree and this proves that saying.    The sons of Pete Franklin continued on the business of selling Suzuki vehicles which makes me wonder if Suzuki’s are a perfect fit for sub-prime buyers.  This is exactly the market that the Franklin family targets, they pimp low low monthly payments with nothing down, which is exactly the hook line that thousands of car dealers use to suck people in.

Quick lesson- you don’t buy a car based on how much it will save you monthly- you buy a car based on whether or not you can afford to have it paid off in 5 years !  That is the rule of thumb for financing.
Warning:  a dirt cheap monthly payment = longer financing term (6-7yrs) = you are seriously upside down and paying on a depreciating car for years! Back to the story.

The biggest part of this story is Chad Franklin.  His car dealerships were recently sued by the Kansas Attorney General for “unconscionable and deceptive business practices relating to an advertising campaign.”  I feel partly sorry for the buyers in this video because they should have known better!  That being said, they still got scammed.

You’ll notice the video mentioned that Chad Franklin changed the name of the dealership to Legend Susuki, which is the icing on the cake.  The guy is so crooked that his own NAME can’t be associated with the dealership HE owns out of fear that they won’t sell cars!  His brother Jeremy is somewhat more “legit” and has never been investigated but once had dealerships under the name Jeremy Franklin Suzuki and were recently changed to Showcase Suzuki to avoid association to his brother’s troubles.  How sad is that?

Granted, there are larger more reputable dealerships out there.  (reputable used lightly).  The problem is that car dealers are completely independent brokers of cars.  They buy cars from the automaker and turn the car right around to flip a profit on it and trust me- they always turn a profit!  Even the business of fixing your car is a business and the guarantee that parts and service are honored everywhere is a myth as well.

When your car breaks down, not only does the dealer run tests to find what is wrong, but they also run tests, punch in your VIN, and check their “databases” to see what else on your car needs to be “repaired” or is “due for maintenance”.  This is not a service, it’s a sales tactic.   This also ties back to how poorly cars survive the test of time and how auto makers covers themselves when they sell it to you.  If you actually followed the manufacture suggested maintenance schedule of your car – you would end up paying thousands and thousands of dollars to maintain your car over its lifetime.  This is pathetic considering you just paid some people’s yearly income for that shiny new sports-car.    Most people can only afford oil changes and occasional 30K maintenance which can still run you $400-500 bucks because of the labor costs.  Sadly, service managers are often reprimanded in dealerships for not pushing replacement and maintenance of specific parts on your car EVEN if there is no reasonable explanation of why you need it replaced.   In fact, the entire service bay is a sales arena in itself.  I know this and if they tell you differently –  they are lying.

A car dealer will not honor someone else’s work unless you outright force them to.  What I mean is that if you have two different dealers look at your brakes, they could give you two different assessments of what is wrong – and if you told a third dealer about it, they would still run their own tests and give you their own view.   They don’t act as a singular network representing the brand (Ford, Nissan, etc).  This is the facts!  A car dealership for the most part makes it’s own rules of engagement.  The only thing that is shared between the dealers are the national offers or services put out by the manufacturer themselves.  If you see a national Ford sale, or national “Toyotathon” event – then you’re going to see those details advertised at the dealers simply because they are the “face” of that car maker.  For all other intents and purposes, a dealer is on their own until they get caught doing people wrong  – which is often the case.

You don’t see this type of independent robbery techniques in a lot of other businesses.   If I buy pants at an Old Navy store in California and have issues and take my receipt to a location in Alaska, the store will make every possible concession to help you.  They will make some phone calls and might even allow you to exchange your items in that store.   Not so with auto dealers.  In fact, most don’t even talk to each other in the same metro area, seriously.  If you’re transmission was tested, estimated and confirmed broken at a car dealership – you can’t take your car to another dealership and have them call the other location to verify the issue and fix the transmission for you.  Wanna know why and you know the answer?  Money !!  The dealers love to check out your car, run tests, open the hood, move shit around, pull out cables, unscrew caps, hook up diagnostic laptops, and poke and prod.  They are no different than the doctor’s office – everything they touch is charged to you!  Sooo, that is why they don’t listen to what you tell them, if they did, they wouldn’t profit from your car !!!   I do have a soft side and realize that many have no choice.  The system has forced dealers to make money by employing these practices- they have to!  Dealers have to make money to pay bills and their people and it does not translate to a positive experience for the consumers.

So what do you do?  Be forceful because most car dealerships are staffed with push overs.  They are push overs because the more you fight, the more they give in.  You can make the car experience better by pursuing a second opinion, or questioning what they found, or simply saying ”I don’t need that fixed right now.”  It’s a bad deal no matter how you look at- and it won’t change unless the basic platform of dealerships changes.   CarMax is a step in the right direction but I have never been to one, so I don’t know that much about them – maybe time to research a little.

There is a positive side with a bad economy- they need the sales!  Now could be a great time to wiggle and waggle your negotiating skills and land a cool car at a great discounted price because dealers are hurting big time.  I know it’s tough for people to make big ticket purchases right now, but you can’t ask for a better time to do it.  In fact, my wife and I are about to start because god knows nobody else is looking for cars right now !   I can’t wait to go bully some dealers.

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Comments

2 Responses to “Auto makers are failing and the car business has always failed us!”

  1. » Posts about For Sale as of January 15, 2009 For Sale: If It’s For Sale, We’ll Help You Sell It on January 15th, 2009 9:30 am

    [...] first-hand how painful Windows POS software can be. Point-of-Sale the Macintosh Way Lightspeed Auto makers are failing and the car business has always failed us! – hearditinabar.com 01/15/2009 I don’t think the failing automakers is totally a result of poor [...]

  2. we on January 15th, 2009 10:13 am

    While the world around them has changed, Car dealers have tried to hold onto the same business model they have had for 50 years.

    The whole business model needs to change……like Sears is doing with appliances where there is a terminal at each dealer (provided and enforced by the automaker) that will show you the price on a specific type of vehicle at all dealerships within 100 mile radius of the dealer you are visiting.

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