If you have ever contacted or done business with any dealership, you know your email inbox gets blasted with “HUGE SAVINGS” until you “unsubscribe.” Dealers know this method is fairly ineffective, but it is cheap and easy. Now some stealerships are targeting your mailbox instead of your inbox.
I can say with confidence that Jalopnik readers have a healthy level of skepticism when it comes to any dealership advertising. However, some of your friends and family might not be so savvy when it comes to these tactics. So if your initial reaction is to jump into the comments and say “Thanks Captain Obvious!”, maybe save this post to share with someone later.
A few weeks ago my father-in-law came to over to visit. He was very excited to show me the Chrysler 200 brochure he picked up at his local dealer. Why was he at is local Chrysler dealer when his paid off car with only 50,000 miles is running perfectly fine? He got a postcard in the mail that promised, among other things:
- Guaranteed $5,000 for your trade!
- Zero down, Zero first month’s payment on all new Chryslers
- Free TV with a purchase of any new car
Keep in mind my father-in-law is someone who served bravely as a door gunner in the Vietnam War. He is getting up there in age and deals with a few health issues. He also came from a small neighborhood in Philadelphia, where you depended on and trusted your neighbors. (Remember how that used to work?)
So when his local Chrysler dealer promised to “Take good care of him because he was a veteran,” you can understand why he might find that appealing. He is also someone that has owned some pretty nice cars, including a few Austin Healeys and a first-gen Toyota Supra. He gets the new car bug every once and awhile.
I had to explain to him that the reason the dealer was so willing to offer $5,000 for his trade is because it is worth about $7,500, the free TV is probably garbage, and while the new 200 is a nice looking car, he is probably better off holding on to what he has and not taking another car loan because “zero down and zero payments” still means you have to make payments eventually.
Direct mail ads appeal target a specific type of customer. It isn’t the savvy internet shopper that is probably reading this website. This past weekend I spoke with a salesperson who specializes in selling cars to these people. We will call him Dan. This is how he works -
“When some dealerships are having a huge weekend sale, sometimes they call in an outside sales agency to increase the staff in the showroom. What we do is we only handle the people that come in with the “mailers” (post cards). These tend to be high profit customers. Rarely will we have the deal available on that mailer. Sometimes the car was already sold, sometimes it is not a deal they “qualify” for...but we will sell them something.
Some people will get pissed that we don’t have the deal they want and leave, but most folks will stick around. Since so many buyers are focused on “payments” and not price it is easy to play the shell game and have them overpay. Last week I had a customer who wanted to pay cash for a $95k Escalade. I convinced him to finance and worked in extras that totaled out to $107k.
...but when I meet these buyers, I always tell them - I’m not a salesman.”
The Federal Trade Commission has cranked up their enforcement on “deceptive” dealership ads especially in the past two years. According to Automotive News, two Las Vegas dealerships reached a settlement with the FTC for making promises in their ads that they could not deliver.
This is not to say that all dealership direct mail is “deceptive.” There is nothing wrong with letting potential customers know about a holiday blow-out sale or a monthly special. Just be aware that many of these mailer ads have a certain customer in mind. The next time a friend or family member tells you about this “great deal,” they got in the mail, saw in the paper, or heard on the radio, tell them about Dan who “isn’t a salesman.”
If you have a question, a tip, or something you would like to to share about car-buying, drop me a line at AutomatchConsulting@gmail.com and be sure to include your Kinja handle.