Friday, February 8, 2008

*Price shown includes $3,000 not shown - Whaaat?

Many auto retailers are employing a disclaimer that says:

"Price shown includes $3,000 cash down or trade equity".
These amounts vary, but $3,000 is a popular tuck. It's enough of a buried factor to distort the numbers and make them appear attractive - especially when compared to ads that don't employ the approach. It's also assumed to be within a range where it might be something that can be overcome at the dealership. Yes indeed, the $9,999 price is actually $12,999. The price shown (large print - wow!) is what is left after you pay $3,000 in cash or trade.

...and once you discover this information, will you think:

a.) Oh... okay, since I don't have $3,000 I'll pay another $100/mo instead and still buy a car.

b.) Oh... not okay. This is a troubling revelation. I've been deceived. Not good - not good at all. I'll go somewhere else.

Apparently, an awful lot of you go with "a.)" Because this technique / tactic / strategy is gaining popularity. It generates traffic (showroom visitors) and dealers have to compete hard just for a chance to see you. They're willing to take the risk that you'll be pissed about the deception. They get a chance to tell a story in person - maybe apologize, or blame "other management". One factor that keeps this method in play is that the "perception" of lower prices is assumed to drive much of the traffic. Customers don't necessarily come in looking for the transaction spelled out in the ad. They come with the assumption that this dealer has a wide variety of choices and the prices are low - and no, they didn't even bother to read the disclaimer.

The trend toward deception rises as the market conditions get tougher. Once it gains a foothold, dealers feel like they have to "go there" just to compete. Plenty would prefer not to stoop to these levels. In private, they admit to feeling some guilt, and they criticize the "big guys" for whoring up the business.

Maybe it's just me, but I'm almost certain that at some point - not sure how soon - most people will reject the retailer who "goes there". The approach that welcomes this trend and develops it will find success. Yup - this will happen.

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