Dealership Evaluation: Like a Rolling Stone

"Once upon a time you dressed so fine
You threw the bums a dime in your prime, didn't you?
People'd call, say, "Beware doll, you're bound to fall"
You thought they were all kiddin' you"

Bob Dylan, Like a Rolling Stone, 1965

The dealership is, to me, after the choice of vehicle, the most important part of the vehicle purchase equation.

My site theme, "Shop the dealership harder than you shop the deal", is what makes texas-cars-and-dealerships.com unique.

After the online dealership evaluation is done, now is the time to walk the asphalt incognito for the preliminary investigation. Not in a tux, like Agent 007, but dressed-down like Detective Columbo.

Everything about you should say "Not a buyer." Done correctly, you'll be invisible, no one will recognize you when you return to test drive cars.

This exercise need not be time consuming, and should begin well before a car replacement is necessary.

Today's best franchises depend on repeat and referral business. They represent brands with high customer retention.

All auto builders are not equal in this respect.

Repeat sales can best be achieved by reputable business practices and long-term customer satisfaction.

The showroom, shop, and surrounding grounds should be well maintained: financial distress will often appear first in neglected maintenance.

A second absolute turn-off is heavy security. Are there guardhouses and gates? Bodyguard type guys with no other apparent job?

Security should be in the background, patrolling the lot to protect the inventory, not eyeballing the customers. Some notorious bad franchises have security designed to protect them from angry customers.

Run away from any dealership that uses “greeters.” I was photographing a franchise from the sidewalk a while back and a salesguy came running out, wanting to answer any questions I might have.

Extra dealer markup stickers on the windshield are a dead giveaway of arrogance. Unfortunately, this practice is growing at Toyota and even Honda dealers as Americans stampede to embrace these winning brands. A lot loaded with these deal killers can be recognized from the street.

Estimated Prophet

Ask yourself: Who owns this business?

Good owners are involved, not living in a castle in Spain. Great owners will even stand at the entrance, greeting customers as they leave, checking to see if they are satisfied. With corporate dealership groups and dealer consolidation growing this is less common.

Customer experience at dealerships depends heavily on the personality of the owner. For dealer groups corporate culture tends to permeate all levels. By casually hanging out, you'll get to know the dealership's personality without risking a dime.

A significant percentage, around one third, of the U.S. dealer population is losing money. Dealerships are overpopulated at some brands and too scarce for others to prosper.

Dividing the population into three general groups, we can draw some conclusions.

Roughly the bottom third are struggling financially. They are in or near bankruptcy: many are being forced out of business by manufacturers whose market share is shrinking. Vendors in this position will say and do whatever they must to survive.

Franchises with real cash flow problems are the ones who "forget" to pay off trade-ins, leaving buyers with two car payments.

Car buyers should avoid franchises in financial difficulty.

Can't Get No Satisfaction

Manufacturers rely on customer surveys to evaluate dealers. Bonuses, vehicle allocations, and other status symbols are granted to franchisees with higher Customer Satisfaction Index (CSI) scores.

Ford's Blue Oval and Chrysler Group's Five Star designations are examples.

CSI is easily manipulated with incentives for good reviews, while surveys from customers who gripe can be buried. Dealers use free tanks of gas, free oil changes, and other perks for customers who give positive survey results.

There is also a booming business for outside survey research firms who tell vendors what customers really think.

Service Location

Shopping just one dealership is not recommended, but those conveniently located for after-sale service should be eliminated only if they fail online or physical inspection.

Price-only shopping at a remote dealer, but expecting your local dealer to provide service when needed is a big mistake. In the business some call this local shop a "foster home", yet virtually every expert recommends the deal fishing shopping method.

Service departments tend to offer preferential treatment to owners who bought from the dealership. This is one purpose of the tags, decals, and license plate frames which id where the car was sold.

Dealership personnel will get to know you and your car, which will help you develop a long term relationship with the dealership.

A convenient location can save time and money, especially if extensive service becomes necessary. I suggest choosing a dealership that will be convenient to return to for service in the course of your daily work.

Evaluate Dealer Staff

Investigation of the people you might be working with requires skills many people find difficult. Most of the time we ignore everybody we don't have a direct business or personal relationship with.

Sales staff turnover at slow selling brands is almost always high. A lack of mature sales personnel is easy to see once you start looking. An exception is Toyota, where they are growing fast enough to have a rookie workforce.

At the best dealerships employee tenure is measured in years, even decades, not months as is common in automobile retailing.

At the better dealerships, the salespeople wait inside until a customer arrives and has a moment to browse the inventory. Then, the salesperson slowly approaches and politely offers to help. Experienced salesfolks can qualify a customer just by seeing them drive up and walk inside.

On this visit, we are evaluating them with the same kind of eye, looking for rudeness or poor product knowledge as they serve others.

Go in the Service Entrance First

Walk right in it's around in back...

As a trucker, motorist, and commercial vehicle owner I have experienced every extreme of nasty dealer service. Unreasonable delays, warranty denials, exorbitant rates and discrimination by account size are the norm. Every dealership has its preferred customers.

After years of driving for small independent trucking firms, I went back to driving for a large company which is a very big client for semi-tractor builder Kenworth.

With a big grin, I took a brand-new T600 off the yard and headed east with the hammer down. But I didn't get far before a suspension air-bag blew out. Expletive string deleted, I went to a dealership expecting to loose a couple days pay. Nothing rankles a road-rat driver more than sitting still.

The service desk guy perked right up when I said my company name. As expected, he didn't have the part in stock.

He said: "I'm afraid its gonna be a couple on the part."

Trying to be assertive without being annoying, I said: "What, maybe Thursday?"

"Naw, not days, a couple hours, we got a new T6 on the yard, the guys are pulling your airbag off it now."

What? They dismantled a new rig using extra labor to avoid inconvenience to a big client. Where had I been living?

The point is: expect very divergent levels of dealer service based on who you are, what car you buy, and the dealer's situation. Great dealers can do this nearly transparently, without rankling anyone's feelings.

The shop is a stress point for many franchisees, especially those dealerships that have traditionally relied on warranty work as the main cash cow.

Service revenue generated by franchised auto dealers fell by almost $5 billion in 2006. Much of the decline is due to warranty work, quickly disappearing as manufacturers race to improve quality.

Car sales drive service sales. For franchises not selling cars, service revenue will begin to shrink.

When a customer walks in to the showroom, they are immediately sized up as a potential buyer today, shepherded from that initial contact on. But by posing as a maintenance customer, you can wander freely into the showroom and gather information.

"Just waitin' on my car in the shop."

How many customers are there? Salespeople loitering?

Some Toyota dealerships have so many customers waiting on paperwork there is nowhere to sit. A Pontiac-Buick-GMC outlet might have 10 shirts wandering the parking lot, waiting their turn for a scarce customer.

How many service bays? Is the flow of vehicles orderly or are cars awaiting service haphazardly staged?

Face Off

"So you never turned around to see the frowns
on the jugglers and the clowns
when they all came down and did tricks for you"

Look carefully at the service writers.

A good trick is to approach the service counter and ask for a quote on an automatic transmission flush and fluid change. Better still if you have a car (borrowed is better than stolen) that needs some minor service, a chronic check engine light is especially good.

These are the people you'll deal with for years after the salesman's smile is history.

Are service advisers too busy, answering the phone or other multitasking, to delve deeply into the car's symptoms?

Most dealerships are upselling additional repairs, often unrelated to the initial service request. My first-and-last VW dealership fixed the same non-problem three consecutive times while my first-and-last Volkswagen was in for something else. The only way to investigate this practice proactively is to ask other customers discreetly.

There is a serious shortage of certified automotive technicians: does the dealer's shop have enough top guys with critical diagnostic skills? With the geometric increase in automotive electronics, the tech's job is getting harder almost as fast as the engineer's.

I read soooo many forum posts by unhappy new car owners!
"Repeat visits to shop but still not fixed."
"Brand new car in dealer's shop more than I drive it."

These lemon cars were probably both evaluated and worked on by underqualified techs.

A lot can be learned by looking directly at people who would be otherwise ignored. Facial expressions and body language are a picture that beats 1,000 words.

I took my 1978 Dodge van to a shop for an in-frame overhaul once. In a van this is an ugly, awkward, uncomfortable job that no mechanic wants. A long block replacement was only a couple hundred bucks more, but I was young, broke, and had a lot to learn about the car business.

The rebuild, promised in two days, ran on for five. The mechanic, a redfaced heavyset man in his early forties, frowned and grimaced all the time. He was obviously unhappy. I brought the job to him because it hurt me so much to work in that confined engine bay.

My rebuild was guaranteed 90 days. I took it from Texas to Wisconsin for the summer.

It's still there. At 105 days and 2,000 miles, the rebuilt engine blew a crankseal, ruining the main bearings. Busy hands ain't always happy hands.

A few minutes leaning on the parts department counter can be very revealing. How do they react to owners who want to repair their own car?

Slip away, roll on without them knowing you could have been sold.

Who said buying a car wasn't fun?

Houston, Texas, July 2007