Many people either can't or won't figure out a car deal, no matter how straightforward the math and despite the many resources and pieces of legislation that assist them.
It is true that even after decades of consumer protectionism, counting down a deal for one's self is still often defeated by clever marketing and the slight of hand of an aggressive sales person.
But what is curious is that the laziness and lack of education of our consuming public does not mitigate one bit the complete responsibility that everyone places on the dealer.
From political leaders to auto makers, everyone believes that when it comes to the public, a fair deal is transparent. Period. But nowhere are dealers given an inch for the fact that we, ourselves, often can't know our true costs.
Customers may know everything about the deal, including our invoices. Even the size of type on pages we show them is governed.
Such transparency is not so with manufacturer-to-dealer communication, where the murkiness of secret warranties, un-priced spec allocations and incentives based on shadowy calculations are more the rule.
Knowing where you stand as a dealer is not just a matter of math, education and diligence. Often, facts are hidden at the time of decision.
That a bad deal forced on a franchised dealer ultimately creates disappointment at the consumer level is lost on today's leaders. Why condone self serving by manufacturers?
Why is it so satisfying to believe that dealers are gifted and crafty and that everything evil that befalls them is either their fault or well deserved?
Examples include bankers who want the dealer to be the guarantor of the truthfulness of a borrower, the FBI who wants the dealer to know the source of customer funds, and manufacturers who hold dealers responsible for the customer's ultimate use and domicile of a vehicle.
Everyone is content that the dealer should be responsible so that everyone else needn't be. All of this is in addition to our customers' expectation that the dealer is responsible for the quality of their vehicle. (Just listen to a dealer explain to a customer of a proven lemon that the manufacturer, not he, is answerable.)
If it weren't for our dealer egos, we'd admit our weakness and demand better treatment. Bullying a weaker player is exactly what's happening. Why else would we so consistently over order? Why would we allow our manufacturers to heap cost after cost on our shoulders while ever narrowing the margin on those products?
But it is not just sympathy for downtrodden dealers that I am trumpeting. There are issues of public concern that come into play when retailers are pushed around. When a retailer is compromised, so too are all those who would depend on him.
A crippled dealer deprives customers, creditors and franchisors of their rightful bargain. Those who would grab more than a fair share of the dealer's opportunity with full knowledge of the dealer's responsibilities are robbing everyone else in the line of the deal.
Suggesting that manufacturers who under-compensate dealers have committed a victimless crime is like saying that insurance companies who abuse doctors don't punish patients. Ripping off dealers is tearing apart consumer confidence and is the biggest single reason why certain products have fallen from grace.
To understand the governing dynamics, one has only to study the pricing and policies of a few of the newest products from Ford, Chrysler and GM. Most of them are well designed and a pleasure to drive. They have great handling, great styling and a great price, except for one thing. The price doesn't pencil.
Many vehicles that sport a catchy MSRP under $20,000 have a margin of less than $1,000. If a salesperson were to sell 12 of these in a month he or she would be above average, but struggle to make a living. Same with the dealer.
Luck, whim and competition all defy adequate measure. But the one thing that a seasoned businessperson can count on is that gross profit has to cover reasonable costs and returns, or someone is going to come up short.
Peter Brandow is a New Jersey and Pennsylvania dealer.
