If you’ve ever walked into a new car showroom, you will know that buying a car is quite different from shopping in a normal retail store. In pretty much any other retail environment – even those selling very expensive wares – you can wander around the showroom in peace, look at different items and casually browse their offerings. You can check price tags, ask straight questions and (usually) get straight answers in return. You can explore at your own pace and you don’t always feel like you have to justify your presence to the sales staff. In a car showroom, however, that doesn’t normally happen.
The usual practice when you set foot in a car showroom is that you are immediately accosted by a sales executive or even a ‘professional greeter’. They want to know why you’re there, what you’re looking for, how much you have to spend, and they always want to obtain as many of your personal and contact details as they can get. Even if all you want is a brochure.
The new car dealership has one of the most aggressive sales environments of any retail venue. Wave off that first sales consultant and another one will appear. Keep rebuffing them and sometimes a manager will even march up to you, effectively demanding to know why you’re wasting everyone’s time and not buying a car already.
Qualification – it’s dealer-speak for interrogation
If you do actually want to speak to a sales consultant, or finally yield to their persistent questioning, then a very structured interrogation swings into place. It’s called ‘qualification’, and it is designed to get as much information out of you as possible, covering every aspect of your personal information and circumstances, all to be used against you in trying to sell you the car they want you to buy, which is not necessarily the car you actually want.
The information you provide is logged in detail, and is accessible by not only the sales consultant, but also the business manager (to sell you finance and insurance products) and the sales manager. Even the manufacturers will access your information, so they can analyse your responses and blitz you with marketing paraphernalia until the end of time. Your data is compared with other customers and scrutinised long after you have left the showroom.
Most car buyers find the relentless pestering and questioning to be invasive and annoying, and feel it makes the whole experience of buying a car to be extremely unfriendly and uncomfortable. Some manufacturers are particularly insistent on this very harsh interrogation process, and one gets the feeling that those manufacturers think the customers should feel privileged to be able to buy their cars. The salesman may appear all friendly and understanding, but be under no illusions that he is ever on your side.
Commissions and targets – it’s all they care about
There are two words you need to understand which drive everything which happens in a car dealership, and why the dealership personnel behave the way they do – commissions and targets.
Nearly everyone you talk to at the dealership is paid largely on commission. The sales executive, business manager, sales manager and so on – all of them receive a relatively small base salary, with the majority of their earnings coming from commissions on selling you their products. So everything they all say or do is geared around you buying their car (and associated extras), because they all get paid a percentage of the money you spend at their dealership.
The other driver for everything that happens at a dealership relates to sales targets. The manufacturer sets monthly, quarterly and annual sales targets for the dealer, and the dealership management then does the same for each of its sales staff. There is then a complicated combination of penalties for failing to meet targets and rewards for exceeding them. For the dealership, failing to hit quarterly sales targets can mean many thousands of pounds of lost funds from the manufacturer, and for sales executives, failing to hit sales targets can mean losing their jobs. At the end of every month, numbers are tallied, commissions are calculated, the scores are reset to zero and it all starts again.
The other thing about commissions and targets is that they are only counted after the customer has paid for their car and driven off into the sunset, not when they actually sign their contract. So if you order a new car this December but don’t actually take delivery until next April, the dealership can’t count the sale towards its target until April and the sales team won’t get their commission payment until the end of May – some six months after they actually “did their job” and sold you the car, and over a month after you took delivery. This is very frustrating for the dealership, and increases the risk of the sale being cancelled at some point during the waiting period. As a result, they are always far more interested in selling you a car they have in stock right now, so they can get their hands on your money as soon as possible.
So how does this affect me when I’m buying a car?
The end result of this obsession with commissions and targets is that the dealership staff are all desperate to sell you a car from their current stock, with finance, plus insurance, plus any number of other extras, because their salaries and their jobs depend on it. There is constant pressure on sales staff to deliver results, regardless of how many customers actually visit the showroom. When things get quiet, the sales staff are expected to pound the phones, calling old customers to try and convince them to upgrade their car, or chase unsuccessful conquests to see if they can persuade them to change their minds.
Dealers know that most customers get frustrated by the car buying experience. They also know that this frustration can often lead to the customer running out of patience and agreeing to buy a car just to make the whole painful experience stop. So rather than try and make the customer feel more at ease, they effectively engage in a war of attrition and will do whatever they can to keep you in that showroom for as long as possible, knowing that the longer they have you there, the better their chance of wearing you down and getting your signature on a contract. Trying to leave a car showroom without buying a car is a bit like trying to escape from prison – there’s a whole lot of people who are desperate to keep you from getting out until they’re ready to release you, which is right after they get your signature and deposit.
Buying a car – how to make the most of it
So how do you, as a customer, make the most of your car buying experience in such a hostile sales environment? Well, understanding the process gives you a much better basis to conduct your purchase. Every ‘recommendation’ a sales executive gives you has to be taken in the context that it is leading you towards the conclusion that they want, not necessarily the one you want.
Before you walk into a showroom, do your homework thoroughly. Know how much you want to spend, and stick to it. The dealer wants to sell you a car, so make them work for your money. Make them meet your requirements, not the other way around. For some great tips, check out The Car Expert’s Ten Golden Rules for buying a car.
If you are not happy with the way you are being treated, walk away. Simply leave and don’t get sucked into any further discussions. Remember, it’s your money, so you should be the one who decides how to spend it. There are plenty of car dealers in the UK, so don’t waste your time dealing with poor levels of service.
What have your car dealership experiences been? Share them with us in the comments section below.
Last updated December 2016. Originally published November 2012 – not that much has changed, and the traditional car sales model is still an awful experience for many people.