Buying A Car From A Different Point of View - Insight Vol. 35

BY ERIK ACOSTA

Buying a car should be an exciting experience—flipping through listings, test-driving vehicles, and finally driving off the lot in something that feels like the perfect fit. But for someone who audits dealerships for a living, the process is a little different. It’s hard to turn off the part of my brain that constantly analyzes deals, processes, and whether everything was done “correctly.”

Over the past year and a half, I have purchased seven cars. Yes, seven. Each time I walked in knowing exactly what to look for—not just as a buyer, but as someone who knows how dealerships operate from the inside out. That knowledge has both aided in my experience and made it ever so slightly more difficult. As you read on, I will share some insight on what I have observed completing internal audits and potential recommendations for your team – all in the spirit of becoming a better dealership that gains the competitive advantage.

Where Trust and Profit Intersect

Most customers will focus on the car itself – the color, features, and maybe how they feel driving it on the road. However, as an auditor, I focus on the structure of the deal, the compliance portion, and how well the dealership’s controls are working and being abided. Below are three topics I have observed and see as beneficial sharing with you:

1 Pricing Transparency is Key

One of the first things I look for is whether advertised prices match the numbers presented to me in person. If I were to note a discrepancy, it immediately raises my internal red flag. Are there hidden fees being added that were not initially presented? For example, market adjustments that are not disclosed as an addendum on the window sticker. The point is that transparency in all regards is important – dealerships that fail in this area can potentially risk losing credibility and long-term customers.

2 F&I Practices Should Be Ethical and Profitable

The way dealerships present financing can make or break a sale. Unfortunately, I have seen F&I teams push higher interest rates or unnecessary add-ons in the hope that the customer does not know better. The result of such unfair practices? Two results, either the sale is lost or because of the unethical practices they create a dissatisfied customer and potentially not gain a sale from them again. It is key to train your F&I team to present options transparently and ethically. Compliance and customer trust tend to go hand in hand and as important as CSI scores are, this should be prioritized for happy customers that will repeat business with your dealership.

3 Operational Efficiency Is a Heavy Hitter

One of the biggest weaknesses I see in dealerships is a lack of standardized processes. From trade-in appraisals to rebate applications, inconsistent practices will cost you money. During our internal audits, we see where finance teams have miscalculated deal terms like pay off or tax amounts, managers that were not aware of operational risks when dealing with certain clients and potential export risks, and policies like bird dog referral amounts or terms were applied inconsistently. A suggestion? Conduct internal audits that can identify where the risks, inefficiencies, and errors stem from and make corrections based off findings. A well run store ensures every deal is completed transparently, ethically, and efficiently to reduce financial discrepancies, increase customer satisfaction, and minimize grievances.

The Takeaway for Dealership Owners

Having purchased seven cars in the last 18 months, while also helping my family and friends navigate their purchases, I have seen first hand what differentiates a good dealership from a great one. If you want your dealership to be superior in a highly competitive market, below are some key takeaways:

1. Ensure pricing transparency – Customers will notice discrepancies, whether now or down the road. Customer trust is difficult to regain once it has been lost.

2. Train your F&I team to sell ethically, while remaining profitable – Sell within the guidelines of what is considered ethical and profitable. A one-time high profit deal to make a certain bonus may not be worth a lifetime customer lost or the potential for chargebacks.

3. Standard Operating Procedures – Ensure there are clear procedures written and shared with your team as mistakes and inefficiencies add up and can cost both profitability and reputation.

   
   

As we all know, customers are now more informed than ever, with the wealth of information at their fingertips - whether it be via a YouTube video or a few Google searches. If they sense that there is something incorrect or appears to be off, they will walk away and meet with the neighboring dealer and try again. The dealerships that focus on long-term trust and operational excellence will be best positioned to come out ahead. Be the dealership that cares best for both its customers and its business. Take a step back and evaluate your operations. Keep in mind that small adjustments go much further than you realize and can drive higher customer satisfaction, profitability, and long-term success. As a customer, I ensure all dealerships I purchase vehicles from maintain these core values.