The Case Against Cross Shopping Dealers

" You must never try to make all the money that's in a deal.
Let the other fellow make some money too,
because if you have a reputation
for always making all the money,
you won't have many deals."

J. Paul Getty (1892 - 1976)

I do not endorse the blind (phone/fax/email) deal fishing, new car dealer "cross-shopping" method championed almost everywhere. To me, it is a sure fire way to find a fly-by-night operation or a lot full of trashy aging sales bank inventory.

"Shop the dealership as hard as you shop the deal" is the central theme of texas-cars-and-dealerships.com.

The Internet allows car shoppers to approach the dealer armed with more information than ever before. But the vast majority of that information is focused on the cars. That's why Texas cars "and dealerships" was created.

It's a commonly advocated car consumer tactic to play multiple car dealers off each other to obtain the best deal.

This rant is not about using at least three competitive quotes as negotiating leverage, it's about choosing a dealership on one relatively insignificant aspect, marginal increments in initial purchase price.

What people who do this are missing is that they are buying into a long-term business relationship when they sign the sales contract. Would you use a blind dating service to find a spouse?

"The men who manage men
manage the men who manage things,
but the men who manage money
manage the men who manage men."

J. Paul Getty

Car buyers are trained to fixate on a thing, the new car, to the point that they ignore the power of the relationships that control their lives. By focusing on the car and "deal" buyers are right where the industry wants them.

The real money is made in the Finance and Insurance "back office", not on the price negotiated up front.

Many buyers are surprised to learn, maybe when they have a warranty claim, that they didn't buy the car from the manufacturer, but from an independent local business.

All franchises representing a given brand are not created equal.

Good car dealers add value to the relationship, especially in the critical areas of warranty and maintenance. Just because the car is new doesn't mean there will be no problems for the life of the loan or warranty.

A properly researched dealer choice should lead to a long-term relationship.

Automotive News recently reported that 1/3 of all US dealerships, more than 7,000, are losing money. By 2010, before many car loans inked today are paid off, lots of these outlets will have closed their doors.

Dealerships continually update their pricing as inventory ages. Vendors struggling for survival are more likely to accept low-ball offers by phone or fax, just to move slow selling models and reduce floorplan costs.

When it comes to service appointments, availability of scarce loaner cars, shuttle service, and towing, that little badge or license frame with the dealer's name on the rear deck isn't just advertising.

Every person who comes in contact with you and your vehicle, from traffic cops to service writers, is thinking: "Who is this person, what is their status relative to me?"

Service technicians, who rarely interact directly with customers, tend to relate more to the cars. They do read that dealer marker, and will remember a car.

With the increasing deployment of computer technology in vehicles, modern cars can no longer be supported by shade tree mechanics. Quality techs and service writers are critical to the success of a dealership. Skilled technicians are scarce, and will move elsewhere if the dealership is not congenial.

Smart dealer principals know this, and invest in their people. A weak dealership can survive with high sales personnel turnover, but there will be no fixing a service department after the experienced techs leave.

The strategy advocated here does not seek the lowest transaction price, but the lowest long term true cost and satisfaction in car ownership.