Your Customer’s Perception Is Reality

I get it. It’s tough out there. Customer access to information on the internet continues to squeeze margins. Dealerships are just trying to make a buck in a fiercely competitive marketplace. You have to do whatever it takes to stay ahead of the competition.

I also get that some may view compliance as unnecessary, overrated, annoying, a waste of time and money, and downright harmful to profitability. These are perceptions and as they say, perception is reality.

Some employees may be tempted to step over the line ethically when trying to make a deal. After all, the chances of getting caught are pretty slim, right? That’s one way of looking at it. Another way is to ask yourself what’s really more important in the long run - flying under the radar or satisfying your customers? In my view, when it comes to compliance and ethical behavior, the true payoff is customer satisfaction and retention. It really comes down to one simple premise - your customer’s perception is the only reality that should matter.

“We have to advertise aggressively and do whatever it takes to drive traffic to the dealership.”
Customer Perception – “I hate the way you advertise. Why is it that the deal is never what it seems? Like when you advertise a car for $7,000 and when I get there I find out that the $7,000 is only the up-front payment for a pre-paid lease and the residual is $11,000. Why can’t you just advertise the real price with no tricks?”

“Customers make ridiculously low offers. If we don’t pack the payments they won’t feel like they got a deal. It’s all part of the game.”
Customer Perception – I hate that damned “four-square” thing you do! It really tempts me to do something uncivilized with your green sharpie. I didn’t come here for a shell game – I came here to give you the opportunity to give me real numbers and perhaps sell me a car. If I didn’t like your car, I wouldn’t be here - why do feel it is necessary to play games with me?”

“If a customer is willing to pay more than the ad price, I’m not going to talk him out of it."
Customer Perception – “It’s ridiculous that you have multiple prices. Why is it that you advertise one price on the internet and a different price on the lot? Why must I have to try to negotiate down to the price that you have already advertised? I’m not Inspector Closeau – I just want a fair deal and don’t want to be treated like an idiot because I failed to turn over every rock to find your “best” price.”

“Whatever you do, don’t sell the ad car, it’s a big loser. Get the customer down here and switch them to something we can make money on.”
Customer Perception – “I saw an advertisement for a great price so I called you and asked if the car was still available. You told me ‘Yes, c’mon down’. When I got there a short time later, I was told ‘the car was sold last night but don’t worry, we’ll give you a great deal on something else’. Why did you lie to me?”

“The only reason we advertise those loss leaders is to get people on the lot. No way am I going to sell a car and lose money.”
Customer Perception – “I tried to buy a car at the price you advertised in the paper and you told me that the ad was a mistake and the real price is higher. I don’t believe that for a second.”

“We need to close the customer at the highest payment possible so we can make some money."Customer Perception – “You told me that the service contract and other accessories were included, but when I read my contract I see that you charged me thousands more.”

“This customer is credit-challenged, she’s lucky to get approved at all.”
Customer Perception – “You told me that the bank won’t finance me unless I pay a higher price for the car and I buy a service contract to “protect the loan”. I’m willing to pay a higher interest rate, but I don’t think it’s fair that I have to pay more for the car too.”

“Your customer’s debt-to-income ratio sucks. We need to give him a raise and hope the bank doesn’t stip for income.”
Customer Perception – “You lied about my income on the credit application and told me not to worry because the bank won’t ask for proof. What else are you lying about? And what happens if the bank calls me, do you expect me to lie to them too? It doesn’t seem like the right thing to do.”

“That’s the perfect car for your customer. Do whatever it takes to send her home in it.”
Customer Perception – “You told me that the car I bought is a ‘one-owner creampuff’, then I find out that the ‘one owner’ was Hertz Rent-a Car! Why did you lie to me? I still might have bought another car from you if you had told me the truth.”

“I’ll over-allow on the trade to make them happy, just close them at this payment.”
Customer Perception – “You told me you would pay off my trade then I found out you added thousands to the price of the car I bought. I would have sold the car myself if I knew you were going to charge me more.”

“We need get rid of those grounded demos.”
Customer Perception – “I was told that the car I bought was new and had a full factory warranty. When I asked why it had 7,000 miles on it, I was told that the manager drove it back and forth to work. Then I found out that a good portion of the warranty was used up.”

“If a customer asks about that painted fender, just say it was key-scratched and repaired.”
Customer Perception – “When I asked you if the car have ever been in an accident, you said it hadn’t. Then my neighbor, who runs a body shop, checked out the car and told me tells me that it’s been wrecked.”

“Let’s just roll the deal. Once they fall in love with the car and show it to all of their friends, they’ll re-write at a higher payment.”
Customer Perception – “You told me my loan was approved, and then you called me back and told me that I need to put more money down and agree to a higher payment or you’ll take the car back. I never would have taken the car home if I knew this was going to happen.”


This article is intended as food for thought. You may agree or disagree. One final thought though - a consumer law firm or attorney general’s perception of the above scenarios probably wouldn’t be pretty.

Getting Customers on the Lot Without Crossing the Line

Many complaints and legal actions against auto dealers are the result of the way vehicles are advertised. According to a joint survey by the Consumer Federation of America (CFA), National Association of Consumer Agency Administrators (NACAA), and North American Consumer Protection Investigators (NACPI), the number one consumer complaint has been misrepresentations in advertising or sales of new and used cars.


Advertising violations are also a ripe target for regulators and consumer attorneys. To give you an idea of how dealer advertising is on the radar, consider the opinion published by the New York State Attorney General’s office: “This office's review of current car ads has revealed a widespread pattern of deception and the use of materially false or misleading representations by some dealers. Rather than truthfully informing consumers, all too many ads appear designed primarily to confuse and mislead them. Such unscrupulous dealer ads are costly traps for unwary car buyers and are unfair to those dealers who compete on the basis of forthright and truthful advertising”. You may also recall that in 2007, Bill Heard Chevrolet was faced with a $50 million deceptive advertising lawsuit by the Georgia Governor's Office of Consumer Affairs.

Many dealers run into trouble with their advertising when staff members or outside vendors are not aware of the countless federal and state laws that regulate advertising. Here are some practical tips on how to avoid advertising violations:

• Never assume that advertising agencies or representatives know all the laws and regulations governing advertising compliance. This is particularly true of companies based in other states, such as internet and direct mail providers. State advertising laws vary and the responsibility for compliance lies with the dealership, not the advertising agency.

• Be aware of all advertising that your staff participates in. If your internet manager is advertising online (including social media!) or your used car manager is placing Auto Trader ads, it is important that they are properly trained and that all advertising is inspected before it is run.

• All advertising, whether printed, broadcast, internet or otherwise, should be in plain language, clear and conspicuous and non-deceptive. Deception can result from direct statements in the advertisement or from reasonable inferences that may be drawn from an ad, or from disclaimers that contradict, confuse, unreasonably limit or materially modify a principle message of the advertisement. Deception may also result from the failure to clearly and conspicuously disclose any material facts, including limitations, disclaimers, qualifications, conditions, exclusions or restrictions. Advertising is considered deceptive if “members of the public are likely to be deceived” or the advertisement has a “tendency or capacity to mislead the public”.

• Be sure that everyone understands that Bait & Switch is a commonly-cited advertising offense and must be avoided. The FTC defines Bait & Switch advertising as “an alluring but insincere effort to sell a product or service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser.”

• If you are not sure about an advertisement, you should have it reviewed by a qualified professional – it may end up costing quite a bit less than a legal action.

• Be conservative in your advertising and understand that your intent is not relevant as far as the law is concerned. If an ad is deemed deceptive, an advertiser has liability regardless of whether there was an intent to deceive. A dealer has the duty to investigate the accuracy of any statements made in advertising.