Most new car buyers flip-flop after visiting a dealer

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

When it comes to retail horror stories, no sales or service experience is more notorious than that of the car dealer. Today, there’s a study out that aims to put a number on just how bad it is. According to J.D. Power and Associates, 80% of new car buyers don’t buy the top car on their list because of a negative dealership experience.

Let’s paint this scenario from a different industry’s perspective. Say you were a Sony executive and found out that many customers wanted to buy your TVs, Blu-Ray players and products, but that 4 out of 5 of them changed their mind and bought something else after visiting your store. You would not be happy.

The J.D. Power research, called the 2008 Escaped Shopper Study, cites “lack of professionalism” among auto dealers’ sales staff as the major factor. Among the other top reasons cited for abandoning a purchase: dissatisfaction with dealers’ service facilities and an inability to find the exact model in the dealer’s inventory. The inventory issue represented only 14% of the total retail gripes.

Automakers spend a great deal of time, money and expertise attempting to correct both dealership behavior and consumer perception, but the negative image of car dealers is so entrenched that a turnaround seems somewhat doubtful.

Research analysts say poor retailing practices are to blame. “Given today’s challenging automotive market, both sales and service experiences at the dealership are particularly critical in the decision-making process of shoppers,” said Tom Gauer, senior director of automotive retail research at J.D. Power.

Though the study also reflects a growing consumer trend toward buying smaller, more fuel-efficient cars, the second most-significant factor beyond dealership experience was price. Forty percent of the people who cited price issues as the reason they didn’t buy a car said that, although they could easily afford the car they were shopping for, they did not feel the general price of the car was a good enough value.

Jack Nerad, executive editorial director and executive market analyst for Kelley Blue Book and kbb.com, mentioned that this consumer trend was last seen during the 1970s: consumers looking for basic, small cars. “Many people right now are looking for basic transportation with simple, non-complicated content. If you visit a dealership these days, you won’t see a large supply of base models with manual windows and simple-to-use functions.”

So, which companies are the least unpleasant at the retail level? (Drum roll, please)… No. 1: Honda. No. 2: Acura.

Coincidentally or not, Honda’s local advertising campaign seeks to emphasizes that its dealers aren’t the smarmy guys that folks normally think of as selling cars. The ‘Helpful’ campaign, commissioned by SoCal Honda Dealers, depicts Honda salespeople apologizing to consumers for the past sins of the retail car industry. In a sympathetic response to the endless complaints, the Honda salesperson says: ‘I wouldn’t do that. I sell Hondas. It’s my job to be helpful.’

-- Joni Gray

Photos: Car sales guy provided by bonkedproducer via Flickr; Honda ‘Helpful’ photograph by Secret Weapon advertising agency.