Dealer Ethics Critical to Getting Vehicle Sales

Survey shows ethics, trust still tops on buyers wishlist.

by on Aug.09, 2016

General Motors' Shop-Click-Drive online shopping serivce was so popular, it made it available to all 4,300 U.S. dealers after a week of testing.

Automakers have long known that the opinions about car dealers are shall we say, less than positive? Dealers are also keenly aware that they aren’t always held in high regard and often try to find ways to make the experience more inviting.

Those efforts have ranged from significant store upgrades to no-haggle pricing to using kiosks to limit a customer’s interaction with a potential buyer.

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Thanks to Amazon and similar websites, perceptions about how to buy big-ticket items have changed and continue to do so. Dealers work in a highly competitive arena in terms of competition with each other, add in a shifting retail landscape and the problems can seem insurmountable.

However, breaking down the root-cause of the problem may be the first step in finding a solution.

Total Dealer Compliance, a car dealership compliance-auditing firm, examined several of the issues facing dealers and how to improve them.

The biggest problem facing dealerships today, according to the findings from the firm’s latest survey, is that nearly 65% of consumers said they believe that U.S. car dealerships’ business practices are not ethical.

A new survey reveals that consumers are more likely to buy a vehicle from a dealer with a clear code of ethics.

They also uncovered that more than 50% of consumers are more likely to shop at a dealership if their code of ethics were clearly displayed when shopping.

“A code of ethics is designed to reinforce a dealers’ personal commitment to quality service and high ethical standards,” said Max Zanan, president of TDC.

(Put down the coffee and get out of the car, says New Jersey. For more, Click Here.)

“Our survey confirmed that the trust between the consumer and car dealer is well and truly broken. Ensuring a code of ethics is on display will be the first step in rebuilding the consumer’s trust, where compliance is of top priority.”

Proving that car buyers are fickle, 40% of consumers admitted that it would not make a difference if a dealership’s code of ethics was clearly displayed upon purchasing. What the results suggest is that options like TrueCar or CarsDirect are growing at because of consumer fatigue towards car dealerships’ sales processes.

“Car dealers have a lot of work to do when it comes to changing the public’s perception. While ethics and compliance go hand in hand, car dealers should execute regular audits, provide online courses to employees and conduct their business ethically,” said Zanan.

“TDC’s survey further highlights the need for a strong compliance training program that will proactively mitigate risks while helping dealerships to build a positive reputation.”

(Traffic deaths highest in lenient states. Click Here for that report.)

Recognizing the ongoing growth of the impact of the internet and looking to build that “positive reputation,” dealers across the country have bulked up their internet sales departments. However, the law in most places require some level of face-to-face interaction and on some level so do customers.

“A large part of our customer base will still want to come to the dealership and put their hands on the car,” Sonic Automotive Group Vice Chairman David Smith recently told Automotive News. “But with smartphones and other technology, the ability to view a car online is so good, and the quality of vehicles is so good, that fewer people will have the need to test drive it.”

Those folks are increasingly relying to the internet to see if those aforementioned ethics are more than theoretical. The days of trekking to several dealerships to get the best offer is over. DealerRater.com says its research shows that most buyers got to 1.2 dealers when buying a vehicle.

Gary Tucker, DealerRater’s CEO, told AutoRemarketer.com the relationship between the customer and dealership has changed. Customers are looking for salespeople who put their best foot forward, the one’s who look like they’re working with a buyer, not working them over.

He argues that while it may be more convenient to just purchase a car online, there is no trust involved in that process. Trust in car-buying can only be gained, Tucker suggests, by face-to-face interactions with experienced dealers who know how to help you get the car you want for a reasonable price.

(Experts fret over sharp rise in heatstroke deaths among children left in cars. Click Here for the story.)

“Cars are still sold one at a time, between two people,” Tucker wrote in a white paper discussing the relationship between consumers and dealerships.

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2 Responses to “Dealer Ethics Critical to Getting Vehicle Sales”

  1. therr says:

    I was in a dealership once with specific wants in a vehicle. I listed them in detail, color, options,vehicle size since it was a truck. The salesman said let me show you what we have. Not one vehicle matched my wish list but he continued to push his trucks and made no offer to order or find what I was looking for. I said good bye and have never gone back.

    • JAE says:

      We must have went to the same dealership and the same salesman. Basically tried to sell me what he wanted me to have, not what I wanted. As with you, I had hit Edmunds, AutoByTel and other sites, settling on Edmunds to “build” my truck, print out the codes and took them with me; thinking that would cut down on the dubious dealer practices. Nope, nada, zilch.

      What was I thinking?!?! Last vehicle I bought from any dealer.

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