Have I mentioned lately that I used to work for BMW, Infiniti, and Ford? No? Well, that's because I never did. Instead, I worked for BMW, Ford, and Infiniti dealerships. (And in the case of BMW and Ford, I've also worked for their captive finance companies.)
Here in the United States, a BMW dealership is no closer to being an actual part of BMW AG, or even BMW North America, than your local McDonald's. That's not just true for BMW; it's true for every automaker with a serious presence in this country. The dealers are entirely independent operations whose interactions with the automakers are largely governed by a patchwork of laws that vary widely from state to state, and, for reasons it doesn't bear discussing here, almost universally favor the dealers' interest over that of the manufacturers.
You would be amazed by the things the automakers cannot stop the dealers from doing. I'm not talking just minor stuff, like pinstriping cars and gold-plating the logos and . Nearly 30 years ago, a Ford dealer ordered a whole bunch of Escort sedans, took the Escort badges off 'em, and put "Taurus II" stickers in their place. Then he advertised the "Taurus II" for $9,999 or something like that. Do you think Ford liked that? But in the end it was the Ohio Attorney General who stopped the practice by sending a fairly intimidating letter.
You see, many of the dealers in this country got their franchises back when it was done on little more than a handshake. A lot of VW stores, for example, were just local mechanics' garages that accepted a few Beetles from Max Hoffman after World War II. There are Ford dealers out there that sold Model Ts. While the modern franchise agreements for new brands like Lexus have language to cover everything from interior decoration to whether or not you can put used cars up front where the drive-by customers can see them, there is pretty much no way to impose serious restrictions on dealers "grandfathered" in by ancient contracts. The most the manufacturers can do is withhold bonus money and certain incentives from dealers who fail to uphold modern standards of customer satisfaction.
The problem there, as any student of economics can tell you, is that the juice has to be worth the squeeze. If I run a dealership that stands to lose $1500 per car in customer-satisfaction incentives, I can freely ignore those incentives as long as I can make more money per sale doing whatever the heck I want.
Which leads me to a conversation I just had with an R&T reader about his purchase of a new Mazda MX-5 RF. He's thrilled with the car, even if our own Travis Okulski doesn't like it as much as the soft-top version. This reader doesn't worry about what Travis thinks. But he does worry about how the actions of his dealership affected him and other potential customers for Mazda's transcendental little sports car. I'll let him take it from here:
A few weeks ago, I bought a spanking-new, Ceramic Metallic Mazda MX-5 RF Grand Touring. Like virtually every other car-buying experience in my life, there were moments when I contemplated running screaming from the dealership.
In our exchange of emails leading up to preparing the car for me, the salesperson asked if I wanted something called Armor All SmartShield for $797, which he described as an extra clear coat to provide additional protection as well as something on the interior to prevent stains. Before I said no, I looked into it as much as was reasonable but what I found wasn’t promising (to be fair, I’m sure whatever would be applied would be a coating, and it would probably be clear, but that doesn’t make it a clear coat; the distinction is more than semantic). It turns out Armor All doesn’t even make it, they merely license their brand. I said no thanks.
At the visit to the dealership to finish the paper work, hand over the bank check and pick up the car, the salesman asked one more time if I wanted the SmartShield, and again I told him no thank you. The final piece of paper for me to sign was some form that stated that I would fork over the remaining balance after my deposit—I was now truly committed. And then, after my commitment to purchase the car was thoroughly and legally declared, was I introduced to a second salesmen who was there to "finish the process." He asked me to follow him into another office, and once inside, he closed the door.
The first thing he said to me was, "the state of XXXX requires the dealership to disclose what I’m about to discuss with you." First he told me, "I don’t know if you’re aware of this, but your new car has 160 computers in it" (??) and suggested than if any of them failed, the performance of the car would at the very least be compromised. Then he told me that Mazda recently switched to a water-based paint and no one knows how well it will hold up over time. He went on to explain that Edmunds estimates that in the first five-year period the new car will be out of warranty, the costs of incidental damages will be approximately $6000—all from things like door dings, nicks, and other damages. The dealership’s "solution" was to sell me a policy for $1500 that would address all of this, but I had to make the decision right now—this was my only opportunity.
I thought I’d heard enough. He was trying to get me to volunteer to pay more for the car so I would have some form of policy that would cover my all-but-inevitable expensive future problems once my car was out of warranty. When I told him, flatly, I wasn’t interested, he then told me about how the wheels have thinner and thinner spokes now that the rims are larger in diameter and sometimes they just crack, and a new wheel for my MX-5 was $800. And if I lost a key? That was also $800. When I firmly said no to everything, he said, "so your plan is to self-insure?"
The sheer number of huge lies he told me was shocking, and I wanted to get up and leave, but then I remembered I signed that final piece of paper in the other room. I imagine most people would respond the same way I did, but at some point, I have to wonder... I have been through rough sales before but this was the absolute worst. It left a very bitter taste in my mouth about returning to that dealer for anything again, except I’m now convinced it’s an industry-wide practice, at least in the US.
The good news is that not every dealer operates that way. I know plenty of people who have outstanding dealership experiences buying a new MX-5. My brother bought a CX-7 and an RX-8 from the same dealer in Lexington, Kentucky and he will sing that dealer's praises to anybody who will listen. There really are good dealers out there.
The problem is that even a good dealer can serve up a bad experience. So it helps to know your rights before you walk into the showroom to close your deal. (You know better than to buy a car on your first visit to a dealer, right? Of course you do.) Pretty much every state has a specific department of the Attorney General's office to deal with car dealers, because problems with dealers make up a major part of their case load. You can always call and ask for a brief primer on your rights, which they will be very happy to provide.
Most states, however, enforce the same group of basic rights for their citizens, and the most important one is this: You're not sold until you roll. Until the moment that you drive off the dealership property in your new car, you can change your mind and walk away. There's almost no such thing as a non-refundable deposit, particularly if you aren't ordering a car from the factory. If you don't like what happens in the F&I office after you sign the sales order, you should get up and walk away.
There are exceptions to the above, which is why it pays to call your state AG. But it is very rare for a dealership to successfully enforce anything before you leave the lot. So don't feel trapped and don't fall for the hard sell.
There's an unfortunate corollary to the above: In most states, once you drive off the lot you are fully committed to the purchase. Don't believe any salesman who tells you that you have "three days to see if you like it." That's the oldest lie in the books and in most states, if this is even a law on the books, it only applies to solicitations at your home. If you can get a dealer to bring the car to your house and have you sign papers there, you might get 72 hours of buyer's remorse time. But if you bought the car at the dealer and drove it away, you are "sold and rolled."
Believe me, the manufacturers don't like the games the dealers play any more than you do. But once you're on the dealer's lot, the rules of engagement are defined by the laws of your state, not by what the automaker would like to see happen. It's a shame, but that's the way it is. So the next time you buy a car, know your rights ahead of time and be prepared to walk away. Someday, it might be legal to buy a car directly from the manufacturer, but in the meantime, we all have to deal with the dealers.
Born in Brooklyn but banished to Ohio, Jack Baruth has won races on four different kinds of bicycles and in seven different kinds of cars. Everything he writes should probably come with a trigger warning. His column, Avoidable Contact, runs twice a week.