The Trade-in - Why You Lose and How To Win

 

 

 

 

 

One aspect of an automobile purchase that is omnipresent the vast majority of the time is the "trade-in" vehicle. The problem is that with the illusive "trade-in allowance", you usually lose the battle, and here's why.

I have bought hundreds upon hundreds of automobiles and trucks from many different sources: auctions, private individuals, wholesale dealers, rental car companies, and through trade vehicles presented at time of purchase. Whereas, the typical American car consumer buys one new or pre-owned vehicle about once every 5-6 years.

I have alluded in the past to the fact that while some of you may be smooth operators and decent negotiators to include automobile purchases (as far as you know) believe me when I tell you that you are in no way, shape, form, or regard going to win the trade-in battle a very high percentage of the time. The reason is because you lack the experience, expertise, and tools with which to arm yourself in order to be effective against a seasoned dealer and buyer. Dealers are armed with integral tools, such as: auction software, wholesale buyers a phone call away, lists of customers looking for specific makes and models, appraisers who can spot prior damage and mechanical issues, Carfax reports, and the resources to negotiate with you. This list can be a definite advantage and intimidating.Like anything else, however, if you are armed with the "insider" information, you stand to make a much more fiscally responsible deal for yourself.

So, I am going to give you some tools and advice that is worth thousands of dollars just for taking the time to read this article!

Allow me to bullet point some very useful tools and fact for your war chest as it makes it much easier to digest:

1) Accept the premise that your trade is worth far more to you than a dealer. Most people have an emotional affinity for their trade vehicle, and that affection can cost you money! Cars and trucks are metal - nothing more - and they are a depreciating asset, which means that they are worth less money tomorrow than they are worth today. Dealers have a nearly endless supply of vehicles at their disposal, so you have to make yours stand out.

2) Trading a vehicle is a business transaction part and parcel separate to purchasing your new car or truck from a dealer. Treat it as such. Car deals become convoluted when you treat the sale of your vehicle as a one-in-the-same purchase of their vehicle, and that is when you begin to lose money.

You are selling your vehicle, and the dealer is the prospective purchaser. Handle this transaction first!

Believe me, the dealer will want to lump both transactions together in a nice little "convenient" package. The manager is going to make it "much easier" for you. Buyer beware! Two transactions and two separate agreements will ensure that you optimize your money.

3) Like any other "dealer", prepare for your vehicle sale in order to maximize your return. Vehicles do not sell for two reasons and two reasons only: price and reconditioning. In the case of selling your vehicle to a dealer, it is highly important to come in with a clean vehicle - not only a clean vehicle, but one that smells pleasant as well. Nothing will devalue a vehicle more than a bad smell. Furthermore, service records pertaining to your vehicle make you money, as do safe tires, operator's manual, an operational inflated spare tire, and a clean engine with clean oil and air filter. In other words, you have become the dealer here, and you are peddling your wares just as the car dealer. It is important to build value in your vehicle for its good merits. This maximizes your profit from your sale.

4) It is important to realize that the market dictates much about your trade-in vehicle. As a used vehicle buyer, I have always classified my inventory into discernable groups. In my case, I classified vehicles simply as A, B, C, and D units. These classifications are based upon a vehicle's retailability, propensity to age in inventory, and condition. As you can readily imagine, the A and B units are going to drive the highest purchase price and return by default.

Let me provide an example: let's say that one of your family members became elderly and had no use for their 2007 BMW 535 because their sight was not keen enough to drive anymore. They leave the car in the garage, it's a desirable color called Alpine White, all equipment works perfectly, all inspections have been performed, and it has incredibly low mileage right at 18,000 miles.

How would you classify this unit?

If you answered, "A", you would be correct! It is in pristine condition, even though it is almost nine model years old, the mileage is fantastic, and it has been garage-kept. Doesn't get much better than that!

For the dealer, he/she sees a unique, one-of-a-kind piece that will turn (sell) quickly and will not likely accrue any carrying fees of note, as well as being a vehicle that is very desirable to their client base. In fact, while the buyer is walking around your vehicle, it is very likely, if not probable, that all of the sales consultants are seething at the mouth and starting to call customers looking for just such a prized unit.

5) Reality check! Speaking of classifications, there are a lot of "C" vehicles on the road, and you may own one. Hey, that's ok! "C" cars are typically what all of the police departments, rental car companies, and transportation services utilize. That means you own a vehicle high on the dependability scale, but the downside is that the supply of these vehicles are through the roof. Thus, a clean "C" vehicle with average miles and no damage brings very average money.

In other words, you (as a consumer and seller) need to be realistic when it comes to your monetary expectations regarding the marketability of the car you are selling. This has everything to do with what will drive your "trade allowance", aside from all of the other aforementioned variables.

6) Try a private party sale first, folks!

If you are going to become "the dealer", even if just for a short time, doesn't it make sense to maximize your return and reduce your overall expenditure?

Autotrader is a wonderful source that will bring a serious buyer, and I recommend it strongly. Facebook and Craigslist are also viable tools. And don't forget a nice "For Sale" sign in a strategic and legal parking spot can bring a ton of activity. Another great option before you say 'oh, that's a pain', is to consider paying a competent friend or relative a selling fee to handle most of the transaction for you. It's worth the effort and eliminates the whole process of you trying to outwit a car dealer who has their sights set on getting your car for the least amount of money while selling their to you for the most amount of money.

7) Speaking of the third-party automotive sites, a little time spent in front of your computer can also translate into making additional hundreds and possibly thousands of dollars selling your vehicle.
Doing your due diligence of research is integral to a positive outcome in this whole process.

First, look for your make and year vehicle out there within a reasonable geographic area. Try using a 100-mile radius and look for the comparable model with comparable miles and equipment. It's kind of like shopping for real estate when you hear a home appraiser mention "comps". In our case, you are seeking out comps to justify what you will settle upon as far as price. You are looking to see what the market dictates on your unit.

Remember, price is a tricky thing.

Having that innate, emotional attachment to that vehicle can skew your pricing judgment. Buyers typically first react to price. Naturally, you know how well your car runs and how good it smells and its history, but buyers - even you - tend to look first at price. Use good judgment. If you find out that your car is a "C" car and there are three full pages of comps pretty much just like yours, you had better excite someone with a very competitive price to garner activity. If not, that car will continue to sit. No lookers, no drivers, no sale.

Conversely, if you legitimately have a one-of-a-kind piece and can justify the value, it is completely fair to ask for a premium price. Keep in mind, dealers are buying and selling the same way, but on a more industrial scale.

Also have a look at Kelley Blue Book for pricing guidelines as it can be of great help and it is an objective third-party source that people generally trust and respect. While not perfect, it can get you into the ballpark.

8) Whether you are selling your vehicle to a private party or to a bona fide car dealer, you or your representative needs to be prepared to present the vehicle to the buyer in an effective manner. This step is very important and can make a definitive difference in your financial return. In other words, you become a salesman.

Let me clue you in to the typical trade-in process: after having a look at the vehicle and maybe taking a drive, the salesperson enquires about "your trade". You advise him that you do have a trade and most salespeople then retort that they "will have their used car manager put a number on it" for you. This seems to be the typical and remedial course of action for most dealerships. It is ill-advised, nut normal.

I can tell you with a great deal of certainty that their "manager" does not want to talk to you or have you present when they appraise the car or truck. Too bad...

Here's how to take control of your destiny and how to proceed with some very simple but effective word tracks:

a) "Yes, I do have a vehicle that I am interested in selling to your dealership. The vehicle is a (year, make, and model) with xxxxx miles, and I have brought the VIN number for you."

At this point, you look like a well-informed consumer and appear armed to take control. If the sales consultant is seasoned, he/she will likely tell you how much they "like an educated customer". If they do, they are being passive-aggressive. They don't want an informed customer that is going to control the situation. They see their commission dwindling.

b) "May I speak wtth your used vehicle buyer to tell him about the vehicle I am selling?"

Now, you look like  a real pro because you have politely taken the subjective sales consultant out of the mix and have gone directly to the source with the money and authority to buy. Sales consultants have virtually no decision-making authority, whatsoever, in the car-selling process unless they are a top performer with some autonomy, and that is rare. At this juncture, you have definitely turned the tide in your direction as the sales manager and sales consultant know you intend to negotiate in an educated fashion.

c) "Hi Mr. Manager, I wanted to speak with you about the vehicle I am selling."

O.K., here is where it can get tricky.

You have done a great job surpassing the non-decision makers, but now you are in front of someone that truly does not want to talk with you.

In a perfect world (for the dealership) the used car manager wants the sales manager to toss him the keys to your vehicle so he can discreetly ask him "what vehicle you they trying to buy, how much does he want for the trade, do they owe anything on the vehicle, who's the salesman, and how does the wife look?" All of these variables are irrelevant. In fact, the less they know, the better. It will influence their decision and be detrimental to you.

Don't allow this to happen! You are now the salesman. Once you meet the appraiser, have a seat and tell him a bit about the vehicle. Mention the year, miles, service records, previous owner(s), dependability, upkeep, repairs, etc. Then, invite him/her to accompany you to the vehicle. When you arrive, walk around the vehicle and point out the pluses and obvious minuses. Being overtly honest tends to make most people feel obligated to fairness.

Next, invite him/her to drive the vehicle and volunteer the keys. If they invite you along, great. If not, allow them the space to evaluate and appraise the vehicle. This is fair. (As a side note, if you are attempting to sell the vehicle to a private party, always accompany them on a test drive. Letting a dealership manager drive is fine. They are insured.)

d) "So, how did you like the vehicle? Is it everything that I described? Do you have any further questions about it that I can answer?"

At this point, the used vehicle manager has already looked at his auction software, knows his inventory needs and wants, has possibly spoken to a vehicle wholesaler, and has run a Carfax to see a history. In other words, he has arrived at a figure that is referred to as ACV (Actual Cash Value), and he is trying to make a beeline back to not being bothered. However, on his way, he will stop by the sales manager's office and give him that ACV figure in order that he be prepared to work his/her car deal. Also be advised that as confident as your sales consultant may be about the great "allowance" they are giving you, an informed manager will not allow the salesperson to know the ACV. The manager's first goal is profit and subsequent goal of moving a unit.

An allowance and ACV are two entirely different measures. The allowance figure, especially when you convolute the two transactions, is the amount of money that the dealer is allowing for your vehicle and should be the trade figure recorded on your buyer's order or purchase agreement. In other words, the dealer may be allowing $15,000 for your trade, but the ACV is actually $12,000.

I know, I know! You are saying, "how can they do that?" We will address that later in another article, but just know that the number you seek is the ACV - how much they are paying for your vehicle in real dollars. Discounts, rebates, dealer cash, participation, trunk money, blah, blah are immaterial for our purposes right now.

9) I am not a fan of clichés, but this is absolutely true in the marketplace: a vehicle is only worth what someone is willing to pay. What you perceive to be the vehicle's worth is somewhat immaterial. Prices are subjective. While all sources say that your vehicle is worth $15,000, maybe you live in a depressed area and the demographic market will only bear $13,000 real money. Remember, there is no sale until you have cash in hand.

THIS is why it is so incredibly advantageous for an amateur car buyer (which you are) to separate their transactions as it were. In fact, were I you, I might suggest this approach when you decide on your next probable vehicle: give the dealership a call or introduce yourself to a personable sales consultant of your choice. Once you have a contact person, let them know that before you can proceed, you need to sell your existing vehicle.

In this process, do yourself a favor and do not volunteer any more information than possible. Knowledge is power, and when you give a slick salesperson information, they can readily use it in their favor. You are not sure of your payoff amount; you are not sure exactly which model you are considering. Your only goal is taking the first step in the process, and that is to get the best offer on your vehicle as possible, and the dealership is not the only shopper out there.

In conclusion, keep in mind that time is on your side. I have always told my customers that they will achieve the best deal possible if they are not in a hurry and certainly not unprepared. When time is short and you are desperate, your chances of a preferred outcome reduce exponentially.

Thus, make an appointment with a local dealer and do as I described. You should walk away with an offer on your existing vehicle that will likely be good for 30 days. If you have not already, take that opportunity to get the best offer possible from all your sources. It may literally pay you an extra $2000 to do so, and that is substantial considering the nominal fees required to advertise.

You don't have to be an expert to play in the dealer's sandbox, but being armed with the insider information certainly helps when put into practice.

Copyright 2015. All Rights Reserved.

What's Missing From Auto Dealer Websites?

 

 

 

Automotive dealer websites have become an integral part of dealership business. They are replete with everything from pictures and videos of inventory, links to Kelley Blue Book and other third-party auto information sites, hours of operation, available departments, service specials, and so on.

Let's be honest, some of the information is just fluff while certainly a portion of the information can actually be of use to consumers. Clearly, some dealer websites are more user-friendly, cleaner, impactful, and effective.

But, there seems to be one thing that is consistently missing from many dealership websites. In fact, it seems somewhat disturbing given how many websites I have visited preparing for this article.

So, what is missing you ask?

The most important part of the dealership!! THE STAFF...

I could go on and on about the why's and the how's and the maybe's, but there is no need to belabor a simple point with a lengthy dissertation. I believe one can speculate that dealers often times simply feel more comfortable not showing their staff members to the public. Not attractive? Someone might recognize an ex-con? There is so much turnover that the photog can't keep up? Who knows...

Nope folks, this is a short one. If a car dealer is not willing to market themselves by proudly displaying their staff, chances are very strong that they probably have plenty to hide. Slice it and dice it how you like, but buying a car and the whole car ownership experience is still very much a people-oriented enterprise. I am very troubled by any dealer who hides themselves or their staff from view. It wreaks of something sinister.

Copyright 2015. All Right Reserved.

Why You Can't Trust (Most) Car Dealers - And Why You Shouldn't

It's no Nancy Drew mystery that the majority of consumers neither trust car dealers or like them for that matter. But, is this sordid reputation well-deserved? The answer is: probably, yes.

There will be car dealers, managers, and general car-biz folk that say, 'why is this guy telling our secrets?' and 'isn't he on our side?' or 'he's selling us out!'  Sure, I have heard that before, and I am unaffected. I am unaffected simply because of the fact that I have proven many times that you can do business with integrity and still win. Actually, I am on the side of doing good business with integrity. And, yes, I am that car business anomaly that has stepped away from the profession for a moment and decided that I have had my good reputation (and sanity) compromised time and again because I answered to some of the most incompetent people in the businessworld with a title. The automobile business offers up compensation to performers in the business that they could never hope to make in any other field - and most will do anything necessary to grab every dime at their disposal.



It is crucial for me to start with some basic, fundamental premises, however:

1) The automobile business is a for-profit enterprise.
2) The vast majority of personnel are not well-educated.
3) Managerial oversight of integrity violations is most often lackluster.
4) Many dealers have poor employee satisfaction.
5) Dealer principals are often closed-minded to any change.
6) Dealers are far often more concerned with your perception rather than reality.
7) Training is often non-existent.
8) Many personnel are scam artists.
9) Many dealers do not believe they can get results while exercising high-integrity.
10) The automobile business is a for-profit enterprise. (I know... I said it twice)

In defense of the automobile business, it is important to note that dealers are in business to make money and to be profitable. Dealerships are a fairly high-risk enterprise that require millions of dollars in inventory, very expensive service tools, sizable staffs, costly insurance, payrolls, and infrastructure. Certainly, some dealerships are larger than others, and I have worked in small, medium, and large companies, but all require a budget that comes out of someone's pocket. And having worked in the business for some time, there can be a ridiculous prevailing attitude amongst customers that dealerships are somehow beholden to their every whim, responsible for everything that breaks, required to honor ludicrous purchase offers, etc. That is another article, though.

A dealership is a for-profit business and rightly so. But, there is a line not to be crossed for the sake of being 'profitable'. The problem is that too many dealers cannot establish their own boundaries with respect to what is acceptable (and legal) let alone ethical. And the truth is that most customers, while wanting to believe that they have expertise in dealing with car dealers, are far from effective in winning that battle. Why? Because, you are simply not armed with the insider information. I am.

From my observations in dealerships, I have seen forgery, bank fraud, identity fraud, straw purchases, conversion, and theft just to name a few legal incursions. And while these are clearly serious legal issues on both the state and federal levels, it is absolutely amazing how so many dealer principals either turn their head in denial, won't terminate the individual(s) involved, or more blatantly and seemingly more often hire someone with a reputation for perpetuating these types of illegal behavioral patterns. What's even better is seeing a dealer re-hire someone previously terminated for illegal or unethical behavior. I know! Really?

This transitions into our second issue of concern - the issue of educated personnel.

How much money can a car salesman make in a month for example? Newsflash: many make over $10,000 per month. Were you aware of that? Many don't, but many do. Is that wrong? No... All who work should make all they can make if that is what drives them. However, it is commonplace that the 'salesman' with whom you are dealing may or may not have finished high school, may have a criminal record, may engage in underhanded business tactics and practices, and is generally not a person of integrity. Moreover, it has often been the case that I and my associate managers didn't even want the person on-staff, but were forced to 'deal with it'.

Lest we forget managers! Wow... I have to say that my observations of managers in the car business has been anything but stellar. Uneducated, low-class, low moral fiber, criminal, substance abusers, ex-cons. Dealing with so many of these folks not only has frustrated me, but made me want to leave the business altogether. Oh, and before you take for granted that the guy with his name on the sign is any saint, think again. In all fairness, I have worked with a small handful of managers and subordinates in the business that were intelligent, driven, scrupulous, good people, but they are far and few between in my opinion.

It's worth mentioning one case as an example with respect to a dealer principal of note.

Most of you have probably heard his name. It is definitely out there and prevalent, and he is well-known. But he is just as guilty as the lowest form of car scum who was engaging in illegal activity and money laundering while using the cash to fund his auto empire only to have his right-hand man take the fall for him and do jail time. His right-hand man has been set for life ever since. And his auto empire continues to grow at an expansive rate to this day. And you keep funding his opulent lifestyle.

Which brings us to the lack of managerial oversight with regards to illicit behavior and unethical activity. I mean, how can one expect a criminal to teach anything but something criminal? Oh yes, the illustrious 'sales manager', the god-like 'used car manager', the benevolent 'general sales manager', blah, blah, blah. Oh how these guys love their titles. LOL. Yet, you would be hard-pressed to have one of them recite a 12-step sales process or give you a synopsis of a privacy act notice. Most of these guys were terribly ineffective sale professionals, but have somehow kissed enough asses to become 'managers'. It is incredible to watch. Trickle Up Stupidity.

Of course, from what I have witnessed, how in the world can a dealer purport to run such a great organization when nearly everyone within its ranks are bundles of drama and misery? I will refer you to my article, "The Car Business Merry-Go-Round" for a review of employee turnover in the industry. In short, many car dealerships are cesspools of bad language, bad attitudes, high drama, sexual harassment, violations of employment laws, overworking, underpaying, low rent, low budget living with a posturing happy face. If your employees aren't satisfied and happy, can you actually expect customer satisfaction?

The tragedy for me has always been that it does not have to be this way. Poor leadership...

Like anything else, issues ensue in business. Change is inevitable. Why, then, do car dealers refuse to change? This is one of the most frustrating aspects of my experience with car dealers. No matter how many times I have sat in front of a dealer principle or CEO and expounded upon the incessant need for them to change their methodologies, one thing has been constant: complete failure to follow sound advice. Probably because it wasn't their I suspect.

The car business and ego go hand in hand. If you think Donald Trump has an ego, try dealing with one of these local car gurus. It is laughable to say the least. You really cannot imagine the self-aggrandizing attitude that some of these people have in the business. Oh, and I get it. I'm an actor and a well-known musician as well as an auto expert, so I know plenty about egos. Maybe that is why I am so utterly amused by what I have seen in the car business.

In other words, after presenting well-thought, researched, statistically viable action-plans to dealers who requested my advice, I have most often received the unimaginable retort that they, all of a sudden, think they 'are doing pretty good' the way they do things. Ego...

What is most troubling for me and even more troubling for them is that I do not recall ever being wrong in exercising a prediction of failure for an automotive company. Yes, I have truthfully been right 100% of the time when I have predicted company failure. Ego...

Which leads us to the fact that if it weren't for an undue ego and posturing to give the perception of everything being perfect, dealers may not be so prone to all the negative connotations. No gourmet coffee, shoe shine stand, massage chair, or artisan pastry is going to save your company just because you are trying to optimize perception. For as many times as we hear that 'perception is reality', it is often the case that perception is not reality at all. As I raised the point in "The Car Business Merry-Go-Round", if your employees won't stay, then how can you expect observant customers to believe that you are stable? And that is only one perception issue.

Like anything else, if your people are not properly trained and astute at everything from general customer service principles to current legal issues affecting customer interactions, your propensity to fail rises. Yet, I can't stress enough how little this potential of failure seems to affect car dealers. It is a dangerous course to travel. It's almost as if many dealers simply blow a wish down into the rabbit hole and hope for immortality. It does not and never will work that way.

I have always been a big proponent of training. I hold (18) ASE Certifications through Ford Motor Company and Northwoods University besides my business university education. Most of that training was done of my own volition, while some was required. The point being that having that level of training for me has paid many dividends, both monetarily and personally. Customers like to deal with professionals. They feel a sense of comfort in knowing that they are being catered to by a professional and, frankly, are usually more willing to pay for it. However, whilst not trying to be negative, I have supervised many subordinate employees (not by my own choice) who could barely complete a credit application for a customer or complete coherent sentences. They haven't been properly trained, and failure to train is a management failure to say the least.

But is training going to help the inherent scam artist? What consumers overwhelmingly expressed to me for years is that they deplore fast-talking, shady salespeople. They hate it to the point that they don't want to get out of their car for fear of being attacked by the bespectacled flimflam artists wearing sunglasses on a string, the Cutter and Buck pullover, and khakis. It is one of their main fears in life. I don't blame them.

Acquiring employees is not at the top of the car dealer list these days. Hold on, I retract. Acquiring employees is very much at the top of the list, as you may not see anyone advertising for employees, but you always see an ad for a car dealership purporting the huge commissions to be made in just a short period of time. Acquiring someone other than a warm body is the issue.

Car dealers are always hiring, and they will pretty much hire anyone from what I have seen. This has caused the business many, many problems and has certainly affected me, personally. I have had scores of employees thrown in my lap - and I didn't want the majority of them. Not that I am unwilling to give someone a chance, but one does need to have a bit of talent in human resources to hire the right people. Dealers need people who have a good work ethic, a passable background, the tools to succeed, and a winning attitude. However, it is and has been so often the case that I have watched managers hire very undesirable candidates that compromised the overall perception of the dealership. Moreover, some of the most frustrating times in the business for me have been instances where I and my customers were simply within an earshot of a fellow employee who was not presentable in any way, shape, form, or regard. Sound judgmental? Probably, but better vetting of candidates makes sense.

Again, I have to mention Trickle Up Stupidity.

I have dealt with many general managers in my career. Honestly, most of them were failures - either personally, in the business, or many times in both. Hey, I am no saint, and I have had my fun, but how most of these guys got their jobs and made the kind of money I saw them make is unfathomable. Of course, I could point out all of their shortcomings, but the main thing is that I have always felt that to be in that particular position, you should really have worked in or have a very clear understanding of every department in the dealership to properly lead.

Naturally, unlike many managers in the business, I believe in surrounding myself with talented people and delegating responsibility as necessary and prudent while maintaining a strong self-accountability mechanism and providing strong support, motivation, and leadership. Whereas, the vast majority of GM's that I have encountered are isolationists; they are scared to death to lose their jobs and prepared to sacrifice all lambs to avoid it. This tends to be the starting point for the incessant turnover, constant instability, and unpredictable forecast results. But again, it does rest upon the judgment of the man or woman about that person deciding who will ultimately lead their team. Thus, Trickle Up Stupidity.

It may sound cliché, but leadership does start from the very top. Look at a guy like Richard Branson. He is very involved in his ventures, he sets high, but attainable standards, he loves creating excitement, not only for consumers, but for employees, and we wants to win rather than just coveting money. Has he failed? Of course! In the case of car dealerships, unfortunately, I will have to use an overused cliché because it is so applicable: those who continue to do the same things over and over expecting a different result do define insanity.

It is a true statement no matter how many times I hear it.

Copyright 2015. All Rights Reserved.

The Car Business Merry-Go-Round



Let's face it - car dealers don't have a very good reputation with consumers in today's business world. But, is their bad reputation warranted? The short answer in many cases is probably, yes.

Let's take a look at that premise from a different approach and not the typical 'they ripped me off' or 'they were shady' premise. In fact, let's go outside-the-box and look at it from an educated business standpoint.

When is the last time you visited your local dealer and saw the same set of faces that you saw three months before when you were in for your last vehicle service?

Probably a very rare occurrence. The reason being is simply because automobile dealerships have one of the worst employee turnover records in modern business. And, to top it off, turnover is very expensive in a dealership environment with respect to new hires, training, morale issues, and employee dissatisfaction. Worst of all, while you would think that a car dealer might have some simple grasp of what level of damage that employee turnover can cause, I have been amazed to see that there is seemingly a level of complete ignorance in this regard, and it seems to run rampant.

When a dealership decides to fill a position, it has two basic choices: either fill the position internally or hire from the outside. In either case, it would certainly be normal to have a learning curve for the individual hired into that position. This costs money. Other employees (by choice or not) typically participate in on-the-job training for the new-hire after the hiring manager has provided their 20-minute indoctrination and disappeared into the abyss of managing. Herein often lies the morale issue. Dealership employees are usually hell-bent on making money, not training new hires. The rub occurs, however, when the veteran (someone who has been there over 3 months. LOL) realizes that if they don't help get this 'green pea' up to speed, that their money will surely suffer, they will be forced to work longer hours, and that the supervisor will likely put all or part of the blame right in their lap. A Catch-22.

We also need to recognize another integral aspect of the turnover issue. For example, in my last dealership position, I was hired to work a five-day week beginning at 7:30 a.m. and finishing at 6:15 p.m. This schedule encompasses an almost eleven-hour day. In this case, I was working in fixed operations and assisting customers in servicing their vehicles. Thus, I was on my feet nearly the entire day, on a computer, in front of a technician, speaking with the dispatcher, selling the repairs, dealing with overly-demanding customers, scheduling appointments, delivering a completed vehicle, and acting as a cashier.... Shall I stop? Oh, not to mention that given the work load, I took lunch one or two days a week for an hour.

I am no stranger to long hours in the automobile business, however, I have had incessant disagreements and arguments with supervisors for years over their incompetence when it comes to employee workload.

It is a fact that an employee who has hit the 45 hour mark in their work week is spent for all intents and purposes. Their productivity reduces substantially, mistakes increase markedly, their attitude becomes increasingly negative, and every other negative cyclical events transpires as a result - injuries, health issues, poor CSI, decrease in work quality, workplace violence, insurance costs, etc. TURNOVER! What is disturbing is the fact that not once have a won that argument, even when holding my usual consensus amongst fellow subordinate employees.

Amazingly, dealer principals don't get it. The fact is that my dealer principle in this one isolated case was far too concerned with his tailor-made suits, hobnobbing at a local high-priced steakhouse, his limo driver, and all the other creature comforts he has obtained at the expense of bad practices. Oh, and by the way, I applaud financially successful dealers and businesspeople, in general. However, I don't applaud principals who lack common care and concern for employees like overloading on work hours. Oh yes, I forgot to mention that the five-day week I agreed to in my initial negotiation then quickly became a six-day work week and I was told that I needed to 'step up to the pump...' So, within a couple of weeks, notwithstanding my years of experience, extensive credentials, and the fact that I far outranked my supervisor in qualifications, I was exploited just like a newbie fresh off the street at the behest of an incompetent supervisor. And right on up the line.

So, the merry-go-round that is the car business starts and continues to spin in circles. In fact, the car business can be somewhat equated to being a stripper. Often times, it is recognized that once a female becomes a stripper, they have a difficult time leaving the profession. They become used to the money, maybe the drugs, maybe the work-at-night and sleep-all-day schedule, the inherent attention. Who knows... Automotive employees seem to suffer much the same dilemma. They, too, just can't seem to get off the pole as it were.

I have had it brought to my attention far too many times by consumers (let alone dealership employees) that people in the car business go from place to place to place in hopes of finding that one permanent position and right fit. Yet, with my years of experience in the business, those people are few and far between. And, if they are an employee of tenure, chances are likely that they are related to someone in upper management. LOL. You just don't see the same faces long in a dealership in most cases. And, if you are a dealer and you don't think your customers notice this instability, think again!

Cause: poor, ineffective management. Effect: poor reputation, appearance of instability, failure to capture profit, loss of customers and customer respect.

Perception....

Dealerships lose employees for many, many reasons. For whatever reason, automobile dealerships and the psychology that surrounds them lends itself to demonstrate that, as a business, they are too often filled with undue drama. There exists everything from rumor mongering, back-biting, position jockeying, reputation damaging, and on and on. Of course, most businesses have their share of drama per se, but I can tell you from experience that an automobile dealership can be a unique ball of psychosis worthy of observation and study.

In effect, personnel issues within the auto industry at the dealer level should be of great concern. Most likely, there are many dealer reading this who feel all-empowered as the all-knowing soothsayer of the car biz. Sure, I hear you; I know who you are. But, let me be that one individual and that minute minority who shall redeem you by giving you great advice.

Listen closely: You cannot fire your way to prosperity.

In 1999, accepted a position with a publicly-held automotive holding group called Sonic Automotive and chaired by NASCAR executive, Bruton Smith. During my tenure with the company - which was surprisingly long given the content of this article - I watched a general manager hire and fire his way through some sixty-three positions in a matter of about five years. There was always a sacrificial lamb. It was always someone else's fault. He has failed everywhere he has

Fast-forward fifteen years. My last supervisor has hired and fired his way through fifty-two employees in slightly over two years! Yes, two years. Disturbing? What is and may be most disturbing is that both of these guys had bosses. Can you see the trend?

Trickle-Up Stupidity.

In summation, TURNOVER effects everyone negatively, and I think we have provided ample reasoning to support that premise. All in all, the causal effect is bad management. Nothing more.

It's somewhat like the South Park episode where everyone in South Park, CO. decided it was necessary to live in denial rather than face reality. All town citizens were instructed to dig a hole in the sand, and the person to their left was to take the shovel and cover their neighbor's head and so on. For whatever reason, this seems to be the action taken by so many manager and dealers in the business. In short, it fails every time. Creative scheduling, realistic expectations, proper utilization of human resource, proper training initiatives, and care and concern for employees will reap benefits should you only dare to try.

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