A MotorTrend.com reader who goes by the name "leadpig" recently raised an interesting question in the comments section of my blog:
"I appreciate your continuing to write things from the sales point of view, Mark. As a non-salesman, the thing about the pressure that bothers me a bit is when do you decide to not pursue it because it's clear the buyer really shouldn't? Or do you ever make that call? In the scenario you describe, the couple wants 350/month payments . . . Then, however, you figure out they don't have $500 for the down payment. Surely the logical conclusion is that these folks probably have their financial equation way wrong in the first place. Why are they shopping for a car at all if they can't even muster $500? I realize that's not entirely the salesman's problem, in that you've been paid by the time they default, but still . . . do you ever make judgement calls like that . . . ?"
I think the question leadpig is really asking is . . . do salesmen have a conscience?
The short answer is . . . no. I'm paid to sell cars. Period. I am not paid to question a buyer's motives or determine whether or not they should buy, or can afford to buy, a vehicle. That's their job. As a salesperson, I have to make the assumption that everyone I deal with is a responsible adult. If there's a responsible adult sitting in front of me, negotiating the price of a new vehicle, I have to believe they know what they're doing -- and have already thought through their decision carefully before coming to see me. Of course, every salesperson knows that's not always the case. But as an employee of my dealership that's what I'm expected to do -- sell cars, not talk people out of buying. However, there are times when your conscience must come into play. Let me give you two examples.
A dealership I once worked for took a car in on trade that turned out to have a bad engine. I can't remember what the problem was now, but it wasn't something obvious. The car looked okay and drove fine. However, our technicians found an internal issue and told the Used Car Manager that if certain parts weren't replaced, the engine would most likely fail within a few thousand miles. Hearing this, the Used Car Manager faced a tough decision. When he looked at the cost of repairing the engine -- thousands of dollars -- he realized he would never be able to sell the vehicle and make a profit. The alternative would be to sell it to a wholesaler and take an even bigger loss. So the manager made the decision to put the car on the lot and sell it-- without disclosing the problem with the engine. I can only presume that he rationalized his decision by telling himself "Hey, it ain't broke yet."
Every salesman on the lot knew about this car. But no one questioned the morality of trying to sell a car that would soon need a new engine. A few weeks later, I upped a young woman looking for a used car, and the minute she saw this particular car she fell in love with it. We went on a test drive, and of course it drove great. But the whole time we were driving I was wondering how I was going to handle this situation when we got back to the dealership.
When we returned from the test drive the young woman said she wanted me to work up a price for her. I stopped her right there and said "You don't want this car." She looked at me kind of funny. "What do you mean?" Without elaborating, I said: "Trust me. Let's find you something else."
Fortunately, I was able to sell her a different car. A short time later the car with the bad engine was sold by another salesperson. And a few months after that it was back on our lot -- in the Service Department, getting a new engine. So we made money on the sale of the car, and we made money repairing it. A real Win-Win for everyone, eh? For us, yes, but certainly not for the customer.
A few years later, a young man came in who was about 21 years old. I'll call him James. He was driving a piece of junk and wearing ratty clothes. James said he wanted to look at a new Camaro. I'm thinking "He has no credit and I'm probably wasting my time." But it was a slow day and I wasn't doing anything, so I thought "What the heck? I'll show him a car." While we were looking I kept trying to steer James to a used car, or a base model, thinking of his budget, but he insisted on looking at the top of the line Camaro, an SS with a V8 engine. "I've wanted one of these my whole life," he said, landing himself on the most expensive car we had, something like $40,000. Before we went any further I told him it would be a good idea if he filled out a credit application, and he agreed. A few minutes later he turned out to be exactly what I thought: a "ghost" -- a person without any established credit. And even though James had a good job and money down, there was no way we could get him financed on such an expensive car without a co-signer. So I shook his hand and sent James on his way. Oh well, I thought. At least I didn't waste too much time.
Two days later, guess who shows up? Yep, James -- with his elderly grandparents in tow. He had talked his grandfather into co-signing for him. We took a credit app from the grandfather, and he was "bullets"-- meaning excellent credit. With James's money down and the grandfather, we were able to get a lender to finance the Camaro. But the payment was what is sometimes called a real "choker"-- over $730 a month-- even at 72 months.
As I walked back to my office to present these numbers to James and his grandparents I was literally sick to my stomach. I wanted to sell a car, but I couldn't imagine saddling anyone with a $730 a month car note, much less a 21 year old. What would happen if he lost his job? He wouldn't be able to make the payments, the car would be repossessed, and James's credit would be ruined -- as well as his grandfather's. However, I told myself it wasn't my job to worry about that. Just "Do the Deal," Mark.
After I presented numbers James asked his grandparents what they thought. I could see they loved him and wanted him to be happy. "Well, if you really want the car, go ahead," his grandfather said. James reached for the pen. At that point I did something a little crazy. I reached across the table and took the pen from his hand. And then I told him:
"Okay, let's stop and think about this for a minute."
They all looked at me as if I had just fallen out the back door of a flying saucer in nothing but my underpants. And then I gave James a little speech that sort of went like this:
"Before you sign this I want you to think about what you're doing and realize this car isn't going to be in just your name. It's going to be in your grandfather's name as well. If you don't make the payments on time, you're not just hurting yourself and your own credit, you're going to destroy your grandfather's credit, too. Do you understand that?"
James said he understood.
"Okay," I said. "Seven hundred and thirty four dollars a month is pretty steep. Are you sure you can handle that?"
"All right, then." I handed him the pen and let him sign.
That was about five years ago. As far as I know James never missed a payment. I'm quite convinced that if anyone heard my little speech that day I would have been fired. But the bottom line is, I can live with myself. Maybe that's why I'm not making $200,000 a year in car sales. But I've never once regretted the way I do my job.More Car Salesman Confidential here:What You Need To Bring7-Tips For The First-Time BuyerHow To Use Carfax Part 2How To Use Carfax Part 1