Let me tell you something about Henry David Thoreau: he never bought a new car. How do I know this? Well, there’s the minor detail of his having died 23 years before the arrival of the Patent-Motorwagen—but there’s also the fact that he once wrote the following, “I think that we may safely trust a good deal more than we do.”
After spending the better part of the ’90s working in automotive sales and captive financing, I can tell you that ol’ Henry David is just plain wrong on that count. Over the course of six long and frequently miserable years, I saw deals and schemes that would curl your toes, the most outrageous of which I’ll be sharing with you in the months to come. Trust me on this: Despite the best efforts of the automakers, the banks, the government, and Ralph Nader, it’s still possible to get taken for a heck of a ride when buying a new or used car.
My brothers and sisters in the automotive sales game will tell you that they are unfairly maligned and that we make thin margins at best. They’ll complain that the “ups,” or customers, will fight them down to invoice minus holdback on a new Malibu, cutting the real-world margin down to one percent or less, and then they will drive that Malibu back to a brand-new house on which the general contractor banked an easy 30 percent. Once the Malibu owners get settled at home, they’ll buy pure-profit video games and digital music without quibbling over the cost, and they’ll do some shopping at online storefronts which use sophisticated algorithms to adjust each price on the fly for maximum possible markup. Last but not least, they’ll use a $1499 mobile phone assembled in China with a bill-of-materials cost somewhere in the $81 range to text their friends about the lousy deal they got on a new Malibu.
If customers feel cheated—and they frequently do—and salespeople feel underappreciated—which is also the case—then who’s right and who’s wrong? The irony here is that customers and salespeople are usually both correct. Most buyers pay too much for a new car. Most salespeople earn starvation wages. The difference between those two bad deals goes to the dealer group—which is to say, in Vegas terms, that it goes to the house. And if you’ve spent much time in Vegas, you know that the house almost always wins.
I like to challenge those odds, when I can. Sometimes it works out, sometimes it doesn’t. I’ll give you an example from the spring of 2006. At the time, I was facing a bit of a problem. Five months prior, I’d leased a new 2005 Volkswagen Phaeton from my local dealer. You might not remember the Phaeton, but it was a platform cousin to the Audi A8 and Bentley Flying Spur. Weighed about 5300 pounds, had four-zone climate control, drove like a bank vault on wheels. I loved the car. The problem was that my (first) wife loved it even more than I did, and she tended to start her day before mine, so she would take my Phaeton to work before I could get my teeth brushed.
The solution was obviously to get another Phaeton, but VW had imported just 300 of the cars for the swan-song model year of 2006. The nearest car was on the East Coast, and I was in central Ohio. I asked my local dealer if they’d trade for it. Surething, they replied, but you gotta pay sticker. After contemplating the idea of paying MSRP for a vehicle so unpopular that VW had turned off the tap at the 300 mark, I took a deep breath and called the dealer myself.
The lady on the phone was as sweet as she could be. Oh yes, we’d love to sell it to you, it’s been hanging around the store for seven months. What would you like to pay? It was like taking candy from a baby. We settled on a sales price of about $54,200 against a sticker of $66K. As a consequence of of the massive discount, the lease payment was going to be something like $570/month, or roughly what I’d have paid to purchase a Camry XLE over five years. Best of all, there would be no “documentation fees” or “title fees.” All I had to do was fly to the nearest airport. They’d pick me up and I would drive my bank vault back home. Easy as pie.
The first sign of trouble happened when I got to the dealer. It is typical practice to put the day’s deliveries in front of the dealer, all washed and Armor-Alled. Some stores will put the most prestigious delivery of the day in the showroom and let the customer drive it out. My Phaeton was twice as expensive as the second-costliest car at the dealership, yet it wasn’t anywhere to be found.
I was greeted by a fellow in a department-store leather jacket. “Let’s get you signed and on the way.”
“I want to see the car.”
“It’s being washed.”
“Then I’ll wait.”
I waited for almost an hour. Then I was taken back to the service entryway, which usually features the worst lighting in any dealer’s building. Yet even under the reluctant glow of a few dim bulbs, I could see that this car was a dog and a half. There were long, deep scratches on every panel, usually just shy of the primer. The small piece of the door trim that extends onto the front fender had gone missing. All four wheels bore the marks of careless parking. The massive chrome grille had a crack in one of the crossbars. What would it look like in the daylight? My guess: like an 18-month-old rental minivan.
This was the worst new-car delivery I’d ever seen. When I walked into the finance office, I was ready to scrap it out. The problem, in a nutshell was this: The dealer was desperate to sell, but I was also desperate to buy. It was the last car of its kind available. Flying home would have cost me another $400, bringing my total travel cost to nearly a grand, and I would be no closer to having another Phaeton.
The ensuing negotiations took the better part of 45 minutes. The grille would be warrantied. The wheels would be quick-polished before I took delivery. The scratches on the paint would have to be my problem. I shook hands with Mr. Leather Coat and sat down to sign the paperwork… only to see a $300 documentation fee.
“Nobody told me about this,” I snapped.
“You’re wrong, Nancy told you about it when you called. She told me she told you.”
“Nancy,” I replied, “is a liar.” The dude stood up like a shot.
“YOU’RE CALLIN’ MY WIFE A LIAR?”
“YES!!!” I screamed back at him. And we endured 10 seconds of the most absurd wanna-be-tough-guy mutual staring contest. Which I ended by taking out my phone. “I’m calling a cab. Stick this car up your tailpipe.” As I reached the concrete parking pad outside the front door, Leather Coat caught up to me.
“I, uh, confused you with another deal. There’s no fee on this one because you’re, ah, out of state.” I smiled in magnanimous fashion.
“Well,” I chirped, “that explains the misunderstanding with Nancy, who I know would not have lied to me!” Twenty minutes later, I was on the road for a 600-mile drive back to Powell, Ohio.
The Phaeton turned out to be a lovely car and a true bargain, although it certainly had an appetite for unscheduled service. I drove it all around the eastern half of the country and took it on multiple racetracks including VIR, where I boiled my brakes and drove off the end of the Climbing Esses. The incident destroyed my wheel bearings, but the local VW shop was so habituated to the big black sedan’s presence that they swapped the parts without ever inquiring as to the cause of failure.
After 36 months, I’d just about forgotten the miserable delivery experience. Until, that is, the VW Credit lady came to evaluate the car for lease return. She charged me about $2000 for all the scratches and dings applied by the dealership prior to delivery.
“The car was like that when I got it!” I protested.
“You,” she replied, “must think I’m an idiot.”
“Well,” I grumbled, after a long and reflective pause, “I think one of us is an idiot, anyway.”