ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Dirty Secrets Car Salesmen Wont Tell You - Why the Auto Industry is on its knees

Updated on September 25, 2013

Introduction.

Just to state firstly, not all car salesmen are crooked, and this article only aims to help you avoid the pitfalls of dirty car salesmen. As such, by turning you away from these fraudsters I also aim to help the decent car salesmen out there. By sending them away from the bad guys, the good guys will be receiving business and the consumer also wins.


Below you will also find a list of traits that help you find a good car dealership and determine if he or she is trustworthy.

1. Why Can't You Sell Your Car Privately?

There are many small reasons that make it difficult to sell your car privately, but one of them is well overlooked. That main reason is, that car dealerships don't want you to sell your car privately. I recently received confessions from no less than 3 car salesmen after I started a conversation with them and lured them into a false sense of security. And here are just some of the tactics they employ to prevent the average person from selling his or her car.

They spend much of their day on craigslist and other websites, making low ball offers for cars to disgruntle and confuse private sellers. This leads the private seller to believe that they may not be able to sell their car at the price they had imagined. The car salesman wins either way you see, because if you can't sell it, you bring it in to trade it in and receive less than its worth. Meanwhile, the prospective buyer of your vehicle will also be visiting a showroom near them to purchase a vehicle.

If you do sell them your vehicle when they respond to your advertisement, "well they just got themselves a steal"

2. Your Credit. They will check it and hurt your credit score!!

What inspired me to investigate this industry a little was what happened to me recently. I took all the precautions in the world. I was pre approved at my financial institution of choice and when it came time to buy the car, I made them assure me no less than 10 times that they would not pull my credit. Long story short, they did and they lied until I checked with Transunion directly. I was a fool and handed over my social security number when they told me they needed it to go to the bank and confirm my loan approval.


You may find this hard to believe but they fought me on this until my attorney sent them a letter. NEVER, and I repeat, never give them your social security number and never do your finances through the dealership. They receive commission for getting you a loan and some dealerships will lie about using your pre approval, and yet they are really reapplying for you through their dealership. The risks are just too high!


To the disgruntled car salemen who say I am a liar, I have received proof from the dealership that they "made a mistake". I had to first quote my rights under the fair credit reporting act, after they refused to apologize or write me a letter to have their inquiry taken off my report more than once. They also lied to my wife and told her that it was a soft inquiry. They even went so far as to assure us that if we called Transunion, they would tell us so.

Has a car dealership ever checked your credit without your permission?

See results

3. They Get Commission For More Than You Know

They gain commission for more than you know. Heck, the guy I dealt with on my latest purchase even lied to my face about getting commission for selling the vehicle. I know he does as I know someone who used to work there.

They also get commission for those "Add on" warranties that rip you off. They get commission for extras on a new vehicle, and they get commission for getting you approved for a loan.

4. Extended Warranties and GAP

Not only does the salesman get a bucket of commission for these extended warranties, he will also tell you anything he needs to, in order to have you sign on the dotted line. Now I admit that in some circumstances, GAP insurance may be usable, but put simply, the rest of these offers wouldn't be offered if they were not profitable for the seller.

Don't buy them no matter how annoying or convincing the salesperson is. They never save you money and the seller is not a good guy who is there to help you. He is there to make money off of you.

Do you purchase the extended oil change/ car wash warranty?

See results

5. Your old car

If you drive into the dealership in an older vehicle, don't expect the salesmen to line up all at once. Notice how they ask you if you drive a decent vehicle, if it will be your trade in. They want your used car and they want you to trade it in for peanuts.

If on the other hand, your used car is not worth their time, they will judge you off of it and will presume that you are not worth their time.

A Trustworthy Car Salesman Will....

1. Not force you to sign for a warranty if you say no once.

2. Tell you what to watch out for in cars and will tell you afew things wrong with a vehicle. If he states that there is NO downside to a vehicle he is a liar. There is always a con or two. A good salesman will tell you something bad or awkward to prepare you, for example, "its gas mileage is so so," or "Lets steer clear of this vehicle because you have kids and I can find you a better, safer vehicle."

3...... be polite when you go to leave his lot, even if you are not buying. Do this as a test. An honest salesman should keep his cool and still have time for you even when you walk away. Just don't waste too much of his time. That's rude and he has a job to do.

4.... not tell you how much the payment should be per month on your loan. This is a nasty tactic. Your finances are none of his business and telling you "its only an extra $20 a month" is not ok.

5.... wait until you are ready. He will not follow you around the lot.


Reward a good salesman and I mean an honest good salesman. Avoid the kind who over sell you, pressure sell you and play games. They make it difficult for the honest guy.

BEFORE GOING TO THE DEALERSHIP

I. Know exactly what you want. Shop online first and be aware of your exact needs.

II. Get pre approved from a bank first.


III. Be Strong and stand up against silly sales tactics. If you wanted the things they are selling you, you would have seen them online.

IV. Remember, they are there to take your money. They are not your friend and they will do whatever it takes to get as much money as possible from you.

Comments

    0 of 8192 characters used
    Post Comment

    • tirelesstraveler profile image

      Judy Specht 3 years ago from California

      Car dealers in the US are starting paying their sales people a salary + flat fee per car. It should be interesting to see what happens without handsome commissions.

    • CraftytotheCore profile image

      CraftytotheCore 3 years ago

      Hi cfin, we have always had good experiences with the local dealerships. It was a mechanic that sold auctioned cars on his side lot where we ran into a problem. He is a licensed dealer, but he was one of the only remaining used car dealers in the area after the Obama cash for clunkers program. All of the other lots had closed up. People were trading in their clunkers at dealerships for new cars. So all of the used car lots are now pretty much non-existent. There are a couple left, but it's not the same as it used to be.

      Anyway, this dealer was selling used cars that had been traded in. They were the clunkers that were traded in. That's where he was untruthful. He tried to say the cars he was selling were all the cars that he had repossessed for nonpayment. To make a long story short, we paid in cash. So there was no need for exchanging info, but the downside was that we didn't know where the car had actually come from. Had we known that, we probably would have just gone to an actual dealership and purchased a car on a loan. At the time, we had just enough cash to get this used junker. LOL

    • cfin profile image
      Author

      cfin 3 years ago from The World we live in

      David, my main goal, on a professional level is to teach consumers some caution, If they go to a good car salesman with the above attitude, the good salesman and the consumer both win. If they go to the bad salesmen, drawing caution to the wind will send them running, and they will go to the good guy.

      I do believe you have the best interests of the consumer at heart, but the truth is, that most dealerships in WI are owned by politicians and the same guys are currently trying to force through the assembly a way to curb the lemon act.

      Its your call. But I know I'm doing a moral deed by warning people. Its also true that the lady we were answering earlier had bad credit. In WI and IL she would not be able to get credit at a normal dealership. She needs to go to the CU and then to a dealership. If she goes to a "low credit" dealership, they will fleece her and screw her over. I like my approach and I know it works.

      I recently went to JD byrider ad was told, no this isn't for you, this is for poor people and people with bad credit. emmm.... maybe to take advantage of them?

    • David R Bradley profile image

      David R Bradley 3 years ago from The Active Side of Infinity

      Good man - let's help consumers - buying a car doesn't have to be like getting a root canal or any other invasive medical procedure. The value add proposition in the auto industry is the sales person - the car, mostly has been reduced to a commodity. Service and genuine interest in the consumer's needs is the competitive advantage in this market -

    • cfin profile image
      Author

      cfin 3 years ago from The World we live in

      David,

      your comments were automatically coming up as spam. This, again, was not my fault. I actually never received a notification for your comment and didn't know it was there., Its weird.

      I am also adding more information to my article to address your, the car salesman's issues with my, the consumers horrible situation.

    • David R Bradley profile image

      David R Bradley 3 years ago from The Active Side of Infinity

      but you still have not published my comment...

    • cfin profile image
      Author

      cfin 3 years ago from The World we live in

      David the car salesman. I gave them my ssn because they said they needed it to match my pre approval in the banks system. If you don't believe me, I would be more than happy to provide you with proof in the form of a letter to the credit bureau stating they made a mistake. I had to threaten to sue them for them to apologize.

      You seem to be so biased that it has blinded you.

      You seem to be on some kind of crusade to defend bad salesmen and tell me, the consumer that their mistake was my fault. My experiences have been terrible with car dealerships in both Illinois and Wisconsin. My father was in the industry for 20 years and left it because he couldn't compete with the dishonesty of the other dealerships.

      As a disgruntled consumer, I have the right to state what happened to me AS A FACT. the nonsense you have scrawled above is also your opinion, but not factually based. You have the attitude of a typical car salesman and its so ironic. It's my fault? The consumers fault. You just keep telling yourself that as they do.

    • David R Bradley profile image

      David R Bradley 3 years ago from The Active Side of Infinity

      cfin, just curious, how did the dealership run your credit without having your social security number? Before even Best Buy can run your credit, they need two things. Your social and then your signature (written authorization).

      No dealership can run your credit without your written authorization and no dealership will sell you a car without running your credit unless you show up with a suitcase full of cash or a cashiers check made out to the dealer.

      If you were going to sell something you owned worth thousands of dollars, would you take a personal check without verifying who this person is and what their history is? I doubt it.

      Ultimately, the dealership has a business to run. They have multiple streams of income, as any good business does. Best Buy for example sells multiple brands, lines, and options all with protection and insurance, but no body seems to write about how Best Buy is trying to screw you. They are just like the dealership trying to make a profit.

      Most dealerships are running a legitimate business and in this current market and information age, the dealership model from the past is fading away and the new model is full disclosure. While there are bad apples out there, it's articles like this which make no sense to me at all.

      Yes, if you haven't figured it out, I sold cars for 10 years and never in my career as an automotive professional did I have time or energy to go to Craigslist to do anything other than post and market my pre-owned inventory. I had hundreds of more efficient uses of time than making low ball offers on cars that weren't even my prospects.

      Commission at most dealerships is based on a percentage. If you sell the car over the factory invoice, you get a percentage of that profit. If it is below that you get a flat dollar amount. Never once did I get a bucket of commission for selling an extended warranty. That's simply false. Sometimes, a sales person bonus plan will include warranty and gap. The finance manager makes his living (think feeds his family) on arranging financing for the client and helping you protect your investment. He is paid a commission for his efforts, but again, there are no buckets involved.

      Taking a trade in is a gamble for the dealership and an investment. When you invest in stocks the strategy is simple. Buy low, sell high. There's no difference here. More often than not, the investment will require work before being able to resell. Mechanical repairs, body work, odor elimination, paint, smog certification, safety inspection, tires, etc. All costs money. Plus the information age being what it is, the used car market margin is shrinking as fast as the new car margins.

      The dealership has employees to take care of and all the standard cost of running a business.

      I understand that buying a car is a HUGE purchase for many, but it doesn't have to be equivalent to a trip to the dentist nor does it have to be ripe with paranoia. The competitive advantage in this market is the dealership who knows they are in the people business and not the car business.

      NOTE TO CONSUMERS: When making a large purchase (car, house, big TV, boat, etc) reward the company who puts service senior to selling buy giving them your business and being loyal to them. Making that a habit will weed out the bad apples and create a market place where everyone wins.

    Click to Rate This Article