Car Salesman Confidential: Lies and the People Who Tell Them

Tell me lies

Tell me sweet little lies

(Tell me lies, tell me, tell me lies)

–Fleetwood Mac, “Little Lies”

No car deal ever goes down without a few little lies being told.

And it’s not the car salesperson who does all the lying. Both sides lie—the salesperson and the customer. In this week’s blog, I’ll talk about some of the lies salespeople tell. In a future installment, I’ll talk about the lies customers commonly tell.

When I say lies, I don’t mean great big whoppers or statements that are totally false and misleading. I’m talking about the garden-variety type of lie, the kind people tell every day. You know, little white lies.

It would be impossible to catalog all the lies you might encounter in a car dealership, so I’ll just touch on a few basic types:

1. Lies Regarding Warranties. You might be told that the seven-year-old Altima with 112,000 miles on it comes with a full bumper-to-bumper warranty that even covers things such as parking lot dings. Nope, no such warranty. Or, you might be told that “Every car we sell comes with a Lifetime Guarantee!” It does, as long as you don’t skip a single oil change or miss a scheduled service and can prove it with paperwork.

2. Lies About Product. For some reason, salespeople love to make up stuff. Instead of taking the time to learn the actual features of a car, they just say something that sounds good, banking on the customer not to know any better. Like the salesman I overheard telling an older gentleman who wanted to replace his aging Prius with a newer hybrid (which we did not have in stock) that “all cars are basically hybrids these days.” Um, yeah right. Or the salesman who said that a Malibu the customer was looking at had a turbocharged V-6 that produced 350 horsepower when the car was actually a base model with a naturally aspirated 4 cylinder that produced only 170 hp. Stuff like that. And here’s the scary part: most salespeople say things like this so quickly and with such supreme confidence that most people believe them.

3. Guarantees or False Promises. I consider it dishonest to make a promise you have no intention of fulfilling. Like the guy I used to work with who routinely promised people a set of free floor mats (or a free fill-up, or window tint, or football tickets, or whatever) just to get them to buy. He never put anything on the “We Owe” and then pretended he didn’t know what they were talking about when the customers came back later to get their free stuff. The solution to this? Get all promises in writing.

4. Incorrect and Misleading Terminology. Like any good cult, the car business has its own specialized vocabulary, and car salespeople are almost as good as lawyers when it comes to manipulating the English language in order to purposely confuse and mislead people. For instance, someone I know is really good at selling people a “Residual Based Financing Option,” otherwise known to the rest of the world as a lease. God knows how many people have leased a car from this guy thinking they had bought it, only to discover three years later that the manufacturer wanted it back!

Terms such as rate and money factor are also frequently abused. Say a customer asks what his rate is during negotiations. Salespeople don’t like to answer that question for a number of reasons, but mainly because they want to make money by marking up the rate if at all possible. So instead of answering it directly, a salesperson might say “Your rate is determined by the lender, sir. Right now we’re just using a standard money factor to give us a good estimate.”

That last statement is a classic case of combining a half-truth with misdirection in a way that would make a magician proud. Yes, it’s true. The lender, not the dealership, determines the actual interest rate. But if the lender has already approved the loan, the salesperson usually knows what that rate is. He or she just doesn’t want to disclose it. The term money factor is misdirection because a money factor only pertains to leasing, not conventional financing. The salesperson is hoping the buyer won’t know what a money factor is and be thrown off by the terminology or will be too embarrassed to admit he or she doesn’t know and won’t ask any further questions. Usually, it works.

But most of the lies told in a dealership aren’t designed to hurt the customer. In most cases, they’re actually intended to help the customer obtain financing and buy a car—which, of course, also benefits the salesman and the dealership. “Half the deals we do wouldn’t get bought,” an F&I manager once said to me, “Unless I fudged the numbers.” And by that he meant making the customer’s income and employment history look stronger than it really is.

Here’s one old school trick that probably isn’t in use much anymore. Let’s say you have a customer named Jerry who has weak credit. He hasn’t been on the job for a long time, and his work history is spotty, so you know it’s going to be tough getting him approved because lenders like to see stability and no gaps in employment. So while Jerry fills out the credit app in your office, you tell him to put down that he’s been working for his current employer, Williams Lumber Company, for the past three years even though you both know he’s only been there three months. Then you open your drawer and pull out a cheap, prepaid track phone that you bought months ago for special customers like Jerry and tell him to write down the number of that phone as his employer’s telephone number. For the next few weeks you carry that phone around in your pocket, never using it. Finally, one day, it rings. It’s the lender, doing their follow-up, making sure everything Jerry wrote on his application checks out. You answer the phone like this: “Williams Lumber, how may I help you. Who? Oh, yeah, I know Jerry. Real good guy. He’s been working for me for about three years.”

And that, my friends, is how it’s done. You got Jerry into a new car, you earned a commission, and everybody’s happy. Except if you ever get caught, you might just go to jail.

In a few weeks I’ll be back to tell you about some of the little lies salesmen hear on a daily basis. I guarantee you your money back if you don’t enjoy it!

MORE CAR SALESMAN CONFIDENTIAL HERE:

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