A recent post on Facebook by a friend of mine got me thinking about another possible long-term effect of the COVID-19 confinement. In her post, she illustrates her frustration with a new car salesman.
In a nutshell, having come to the point when all that was left was to sign on the dotted line, the salesman seems to have imploded. She made an appointment to meet and finalize the deal. When she arrived, on time, the salesman was tending to other customers.
After waiting for over twenty minutes, the salesman said to her, “well, you would not expect to be seen at your real appointment time if you were at the Doctor’s office. I’m like a doctor, you see, and I’m very busy so you can’t expect me to see you at the time you were scheduled for. Do you want the car?”
Needless to say, she bought the car at another dealership.
For most people, after a house, a car is the biggest purchase we make. I once worked for an advertising agency that had a local car dealership as a client. The owner would often mention that the company, in this case, Ford Canada, would love to do away with new car dealerships entirely.
If you were interested in a Ford product, once you did your research, you would build your car online, including financing, then go pick up your purchase. If you wanted to take a specific model for a drive, you could make an appointment to do so. If you liked the car after driving it, the showroom would have several computers available for you to make your purchase.
Certainly, this does not apply to used cars. Previously owned cars are no longer identical. Wear and tear would and does have an effect on the worth of the vehicle. But new cars have no wear and tear.
As Carvana has shown, there is no real need for new car salespeople. In theory, all new cars, comprised of exactly the same features, should cost precisely the same. There should not be any haggling; when you haggle with a new car salesperson all you’re doing is trying to reduce his or her commission. A commission for a ‘service’ that is unnecessary.
Will automobile manufacturers continue to soak new car customers by allowing salespeople to pad the price? Or will they take advantage of the COVID-19 confinement to overhaul the system?