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Article on car sales misleading, wrong

<p>Sandy Liguori responds to a newspaper article that he says was misleading.</p>
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I’d like to address a recent article in the Toronto Star called Confessions of a Car Salesman (Business, Aug. 18).

A former car salesman, who worked for three months at a new car dealership six years ago, made several statements about our industry that are misleading.

During the author’s 90-day employment, he wrote that “the stress of working 12-hour days” got to him and so he left the business.

I’m the President of the Toronto Automobile Dealers Association (TADA) and I’ve worked in this industry for 30 years. Although there may be exceptions, the vast majority of salespeople don’t work 12-hour days.

The writer claims to have made excessive commissions by selling customers options they didn’t need. This type of selling is highly unethical and it undermines the fair business practices that our industry strives so hard to uphold.

For this man to have made $17,000 in three months (as he claims), he would have had to sell an average of 19 cars a month. This strains credibility, particularly since most experienced salespeople average about 10 cars per month.

The author also provided tips for new car shoppers (in bold). My observations on his comments follow.

1. Do your homework. Absolutely. Salespeople prefer to deal with educated and well-informed customers. It makes their jobs easier and provides for a more efficient sales process.

2. Find the biggest dealership. Larger volume dealerships don’t offer better deals; all dealers pay the same price for new vehicles from the manufacturers. My advice would be to do business with a dealer closest to your home or work, so that you can develop a relationship with the staff.

3. When to buy. The author claims that “the last day of the month, a few hours before closing, is the best time to buy (because insurance for each vehicle is due the first day of the month).” And that “the longer a car sits, the less profit they make.”

This is completely false. I’m not aware of any dealer who pays insurance on monthly inventory levels. He may be confusing insurance with bank wholesale interest on dealership inventory financing, which further illustrates his ignorance of the operation of a new car dealership.

4. Be patient. The author suggests that prolonging the sales process will result in a better deal. Any experienced salesperson would refute this claim. A sale is made when two parties agree on a price, not on a deadline.

5. Don’t hand over your licence. There is a suggestion that negotiating is a shady practice. For the record, one-price selling has been tried in Ontario many times and it hasn’t worked. For many customers — especially those from diverse cultural backgrounds — negotiating on the purchase of a new or used car is expected. Market competitive pressures in our industry dictate this traditional practice.

Regular readers of this column know that our industry is the most heavily regulated in Canada. The TADA fought to have the Motor Vehicle Dealers Act rewritten so that dealer business activities are more accountable and transparent.

The vast majority of automotive salespeople and dealers in Ontario operate with integrity and principles. They are in the business of providing value to their customers, not taking advantage of them.

In my opinion — shared by dozens of dealer principals and colleagues who have contacted me to register their objections to the article in question — the picture that this writer paints of the retail auto industry is inaccurate. How working at a dealership for 90 days qualifies him as an expert is anybody’s guess.

All new car dealers take pride in the products and services they sell. To suggest that we routinely overwork our staff and gouge our customers at every turn is insulting.

Our industry is not above fielding criticism when it’s deserved, but we refuse to be silent when false accusations are made against us.

This column represents the view of TADA. Email president@tada.ca or visit tada.ca

Sandy Liguori, president of the Toronto Automobile Dealers Association, is a new car dealer in the GTA.