Sales Promotion Scams

This article is about the different "sales scams" that are done at car dealerships everyday.

There are many different kinds of "sales" auto dealers perform. A few of the different types are: the Super Sale, $29 Acquisition Sale, Pull & Drag Sale, the Pre-Approved Sale, recent Bankruptcy Sale, Give Away a Gift Sale, and the list could go on and on.

As sales go, you would think if you went to one, you would be saving money; nothing could be further from the truth. Here is a brief description of how some of these sales work and you will see why you won’t be saving any money at them.

The Super Sale: This kind of sale started several years ago. Usually what happens is an auto dealer will hire an outside group sales team to come to the dealership and conduct the entire sale. The company hired to perform and conduct the Super Sale will come to the dealership with extra sales people, a finance manager, two or three closers, and a desk manager. The sales plan will include the dealership spending about $10,000 in advertising, which mostly consists of a flyer that will be inserted in all the surrounding local newspapers as well as radio ads and an editorial looking newspaper ad in the paper.

The outside company will typically add $5,000 to the cost of each vehicle and then figure payments based on the longest term possible and only $29 down payment. They will then put the payments in each vehicle on the lot hanging from the mirror on a hang tag advertising "pick a payment, pick a vehicle."

As you can see there is no discount. In reality the customers think if they can afford the payment, they must be able to afford the car. Unfortunately, they will end up paying way too much for the vehicle. The real price of the vehicle is never displayed at these kinds of sales, only the payment.

These are the kind of customers car dealers love. People who focus on payment only, and don’t pay attention to how much they really paid for the car, make commissioned sales people a lot of money.

The Push, Pull & Drag sale is when the dealership sends out flyers in newspapers or direct mail and advertises that they will give a minimum of $1,500 trade in value on any car, whether it runs or not. So, if you drag or tow your clunker car to the dealership, they will give you a minimum of $1,500 dollars off of the price of their vehicle, even if your trade in car is only worth ten dollars. Basically, if they have a $4,000-$6,000 dollar markup on their car, you’re only getting $1,500 off of asking price. The customer is once again paying too much for the car.

The Pre-Approval sale is geared towards people with poor credit. The dealership hires an outside marketing company that will send thousands of letters out to people according to their FICO credit score. If a person’s FICO score is be between 500 and 600 they will receive a letter and a check attached to it saying the customer is pre-approved for a loan amount of $19,995 for example, and they need to call ABC Motors immediately to lock in their loan approval. Sometimes there will be a hook involved in the letter such as a free gift for coming into the dealership.

These sales are also very profitable because the dealership personnel will totally control the customer and basically tell them what kind of car they can buy. They will stuff the customer in whatever car provides the dealer with the most profit as well as con the customer into thinking they have to buy the back end products like an extended service contract.

This sale works the same for fresh bankruptcy customers. Bankruptcy is a matter of public record and dealerships love to target fresh bankruptcy customers. There are many companies who specialize in bankruptcy lists and sell them to the dealerships. These people just went through a bankruptcy and are most likely embarrassed, depressed, feeling completely inadequate and are desperate to start over and re-establish their credit. Car dealers love to take advantage of fresh bankruptcy customers.

The Website $1,000 Free Gift Certificate Scam is one of the newest ones out there. You won’t even find these sales descriptions on any of the popular car sites because they don’t know about them. This one is where you will receive a post card or letter from the local car dealership that basically invites you to the dealership to look at their cars and just for coming in they will give you a gift certificate worth one thousand dollars in free merchandise.

You simply go to the website that is on the certificate they give you and you can choose from many different types of merchandise such as electronics, camping equipment, kitchen appliances, sporting goods, etc. The scam is that the equipment is free but the shipping charges are outlandish. Often the shipping charges cost more than the product on the shelf in a store. If you picked out one thousand dollars worth of products from the website it would cost you about three hundred dollars in shipping for the products that are really worth about $150-$200.

Getting customers into the auto dealerships has become an art form in trickery, deceit and the latest techniques in psychological button pushing. Auto dealers use televisions, bicycles, sporting goods, gift certificates, and anything else they think will get you into their showroom floor. Whatever they are giving away for free you are ultimately paying for in the car deal.

The bottom line is you don’t need to go to a special sale in order to get a good deal. Car sales are designed to rip you off, not give you a great deal. You need to trust the dealer, and be armed with enough research, to be sure that you aren’t taken by an unscrupulous dealer.

 

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