Saturday, January 31, 2009

Bad Ad... The Fine Print... Getting It Off My Chest

As you've probably have figured out by now, I spend a lot of time prowling the internet looking at car sites. When I was looking for a new winter beater in 2008 one of my favorite sites was autotrader.com. The majority of the listings on AutoTrader are dealer listings, but they run the gamut from small "mom & pop" used car lots to huge multi-make mega-dealerships. From a $1000.00 Jeep to a $200,000.00 Alfa 8C, you can find pretty much anything on AutoTrader.com.

AutoTrader.com is a well laid out site. Intuitive to use, you can search the entire country for any and all cars available or you can narrow your search to one particular car, and sort that by year, color, price, options, location and more. It's not perfect, it's up to the seller to remove the listings and occasionally you'll call on a car that was sold 3 or 4 months prior, but all-in-all I think it's the best site on the internet for used cars.

I had to make a decision last week about my BMW. I've owned it for 12 years, it has 185,000 miles on it (145,000 of those were put on it by yours truly) and has been an unbelievably great car. BUT, it's now a 14 year old car and I'm wondering just how much life it has left in it. It's also absolutely the worst car I've ever driven in the snow, which is why I have a "winter beater".

Depending on who I talk to, I'm advised to keep it - the reasons usually being that 1) I like it, 2) it's paid for, 3) it's in remarkable shape for its age... Or sell it and buy a more modern "all weather car" - those reasons being 1) it's old, 2) I'm paying insurance and registration on 2 cars, 3) one car for all purposes is practical. (People who suggest that last reason don't know me well. Practicality never enters my mind when it comes to cars) Friends and family seem to be equally divided on this issue... Long time friends who remember me when I had 4 or 5 cars on the road at the same time, advise me to keep the BMW and the winter beater. ("What the hell, Dave, you only own 2 cars now") Newer acquaintances advise me to sell what I have now and buy one "all season" car ("My new AWD Audi has never gotten stuck in the snow and in the summer I can take an S-curve on a mountain road just as fast as you can in your BMW") Both have good points.

Ultimately, it's up to me to make the decision. That's not as easy to do as it was 12 years ago. You see, for the past 26 years I've made the bulk of my living by owning a record store. 12 years ago that was a great way to make a living. Today, not so much. (Although it's still fun, which is why I keep doing it) 12 years ago I saw the BMW on the lot of the place where I bought the 1993 Saab 9000 I was driving. I stopped in on a whim, drove the car, loved it and offered to buy it. I used my Saab as the down-payment and financed it through the same bank that financed the Saab. I didn't have a pay-stub or tax return on me (who carries those around?), but the bank, based on my payment record for the Saab, approved me without any of that stuff. I saw the BMW around 2PM and was driving it home by 4. It was that easy.

It's not that easy today. Banks look at owning a record store about the same way they look at being unemployed ("Sir, it says here you own a record store. Are you presently seeking meaningful employment?"). I've decided that if I am to get a new car I'm going to pay cash and skip the bank humiliation.

I'm digressing here, aren't I?

Anyway, for the past few weeks I've been perusing the cars listed on AutoTrader.com. For the most part I've been looking at Audis and BMWs, but one night I decided to broaden my horizons a bit and look at Saabs. I entered all my requirements and hit "search". 180+ cars showed up.

I had it sorted so the most expensive cars were at the top of the list. I start looking at each search result. It took some time. About 45 minutes later I'm near the bottom of the list and this car shows up:

NEW LISTING

2001 Saab 9-5 Wagon - $3,995

Mileage - 86,702


Map Pockets, Power Driver Seat, Radio, AM/FM Stereo with CD, Anti-Lock Brakes, Air Conditioning, Alloy Wheels,Front Bucket Seat(s), Dual Climate Zones, Cruise Control, Radial Tires, Clock, Trip Odometer,Tachometer, Interval Wipers, Rear Defroster, Carpeting, Vanity Mirror(s), Reclining Seat(s), Power Sunroof, Center Arm Rest, Inside Hood Release, Courtesy Lights, Rear Window Wiper, Map Light(s), Sunroof Cover, Child-Proof Locks, Keyless Entry, Leather Wrapped Steering Wheel, Floor Shift Console, Auto Day/Night Mirror, Fold Down Rear Seat(s), Traction Control, Dual Air Bags, Heated Seat(s),Leather Seats, Power Brakes, Power Door Locks, Power Mirrors, Power Passenger Seat, Power Windows, Power Steering,Telescoping Steering Wheel,Tilt Wheel

A 2001 Saab 9-5 Wagon with 86,702 miles on it for $3995.00?!!? Retail on this thing is around $7000.00. $3995.00 is just around the trade in value. This was a car I wanted to look at.

I looked at all the pictures online. I couldn't see any obvious damage. I ran the VIN through CarFax. It came up clean. The dealer is located in Manchester, NH, maybe a 90 minute or so drive from my house. I made plans to get up early the next day and take the drive to NH.

Then I spot the scam. Way down at the very bottom of the page, in small print, it says this:

Sales Tax, Title, License Fee, Registration Fee, Dealer Documentary Fee, Finance Charges, Emission Testing Fees and Compliance Fees, three thousand cash/trade are additional to the advertised price

"Three thousand cash/trade are additional to the advertised price"? WTF?

So the car is $6995.00. That's average retail. No big savings, nothing worth driving to New Hampshire for.

In the eyes of the law this may not be deceptive advertising (I don't know), but in my eyes it is. A friend said I should have known there was a catch when I saw the big 3995.00 at the top of the page and thought there was a great bargain here. I disagree. In 2009 car dealerships aren't doing much better than record stores. I thought maybe the dealer was, like so many record stores are doing these days, turning inventory into cash by offering it at cost or below cost.

What's the point of this kind of advertising? I called a woman I know who runs a used car lot (and DOESN'T do this type of advertising) and asked her. Simple, she said. The ad is designed to do exactly what it almost did to me... Get a person to immediately head over to the dealership for the "deal of a lifetime" on a Saab (or whatever). The dealership will let you crawl around the car, drive it and, most of all, fall in love with it. Then they'll drop the real price on you. You now love the car, but you only have $4000.00 to spend... NO PROBLEM, it just so happens the dealer will have "in-house financing". Give them your $4000.00 cash (which is probably close to the amount they paid for the car), sign some paperwork and you'll be driving the car home that day. Of course, the "in-house financing" rates are just slightly below the usury laws and your 2001 Saab will cost you $14,000.00 (or more) over the course of the loan, but you've got your new car. Best of all for the dealership, if you don't make your payments, they repo the car AND keep your $4000.00, plus whatever you've paid on the loan. It's a win-win for the dealership.

The bottom line is this is a bullshit way of doing business. It's probably legal, I later saw several other dealers doing the same, but it's sleazy. It is, in my eyes, deceptive.

I guess it's effective though. My friend says she knows plenty of dealerships that do this. They're all making money while the more honest ones are struggling.

Hmmmm... I could use some extra cash. Maybe this weekend I'll take out an ad the says in big letters "All CDs Just $2.99". I'll list a ton of CDs that usually sell for $14.98. Then, in tiny print at the bottom, I'll write "$12.99 cash is additional to advertised price". Do you think anyone will get mad? Do you think anyone will feel conned? I think they will. I bet they'd never shop at my store again. Just as I'll never buy a car from that dealer in New Hampshire or at any dealer who uses this type of bullshit advertising.

Phew. It feels good to get that off my chest. Thanks for listening (reading, really)

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