Articles published on my business blog

How not to sell a car

May 28, 2012

A few years ago I went shopping for a new car.

For several years I was a satisfied owner of a Eunos 30X coupe. It was probably the best engineered and built car I had ever owned, and I had had a few cars over many years. When the lease was coming to an end the finance company wrote to me to tell me that they had pre-approved a loan for a replacement car, and all I had to do was get a dealer to ring them for full approval of any replacement lease. I thought that it might be time to look for something else, and as my experience with the Eunos had been all good a Mazda was an obvious choice. As I wanted a small car with some room and features, the Mazda 3 range fitted the specifications, and as I wanted something with a bit of performance it was going to be an SP23.

I was coming home from a meeting one night and saw the exact car I wanted in the local Mazda dealer's yard. It was a yellow SP23 hatch. (I had always wanted a yellow car, and had considered having the Eunos repainted if I kept it beyond the end of the lease.) It was obviously a demonstrator as it was registered but in the new car part of the yard. Perfect! The next morning I checked Mazda's web site to confirm the price of the new car and I noted that a demonstrator sale was starting that day. More than perfect! I set off with confidence to buy my new car.

I had thought I was entering a car yard, but it soon became apparent that I had travelled down a rabbit hole into somewhere which could only be described as curiouser and curiouser.

Once I managed to attract the attention of a salesman, the conversation went like this:

PB: I would like to buy this car.

SP: That is a demonstrator. It is not for sale.

PB: But Mazda's web site says that there is a demonstrator runout starting today.

SP: The runout does not apply to the 3 models.

PB: So I would have to pay full price for it, even though it is a used car?

SP: That's right, but we can't sell it to you because it has only done 2,500Km and we can't sell them until they have done 4,000. (This was said without looking at the car's instruments.)

PB: I've bought demonstrators before and nobody ever seemed to have rules like that.

SP: If we sold it, we wouldn't have a demonstrator.

PB: (Thinks – what about that red registered SP23 demonstrator that another customer is looking at?)

PB: I am sure you could find a way to sell it to me.

SP: There is a three-month waiting list for the 3 series cars.

PB: I'm lucky then, because I want to buy this very car in front of us.

Then – the best comment by a salesman all day:

SP: Yellow ones are hard to get.

PB: I'm still in luck, because this one is yellow.

The salesman finally agreed to discuss selling me a car, so we went to his desk. He then told me that on-road costs would be in excess of $6,000. This was made up of $1,645 dealer charge, about $300 each for registration and compulsory third party insurance, about $1000 for stamp duty and an unexplained $2,750 which was either some very expensive mats, a gouge or an attempt to make me go away. When I objected, the salesman had a chat with his boss and they agreed to drop the on-road charges to only $4,000. Apparently this discount to only $750 more than the usual new-car price was because it was a demonstrator and therefore a used car.

To keep things going, I provisionally accepted that price. I was then told that I couldn't have this particular car but they had found another one in the same colour at another dealership. Unfortunately, as this would be a new car I would have to pay the full price, and, added misfortune, there was nobody at the other dealership who could deal with anyone wanting to buy a car until next week. It seemed that this other car was at the only car yard in Australia which doesn't work on weekends. Again, I provisionally agreed just to keep the process moving.

They then told me about the trade-in value of the Eunos. I had purchased this car from this dealership, and they now offered me a risible valuation which indicated that it had been losing value at an average rate of about 2% per month since I bought it. This told me that either I had been seriously overcharged when they sold it to me, or that Mazdas lose value faster than some cheaper cars (my previous car was a Hyundai (I had bought the demonstrator that I had the test drive in) and its loss in value was at nowhere near this rate) or they simply wanted me to go away and stop bothering them. I went away.

What amazed me throughout this whole experience was that the dealer seemed to have no intention of selling me a car of any kind. No attempt was made to offer me one of the other cars in the yard, or to suggest, for example, a Mazda 6 which could have been supplied at around the same price. They were prepared to waste two hours of my time for no reason other than perhaps giving the salesman some practice at talking to prospects. It must be good to have a business where you can turn away customers who have already made the decision to buy and have the money in their pockets.

About two hundred metres up the road there was another car dealer. In that yard was a used Lexus IS200 at a price comparable to the inflated price that I had first been quoted for the Mazda. It was a very nice car, and an extremely suitable replacement for my Eunos. It was yellow.