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Survey: Consumer distrust of car dealerships not always based on experience

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Business Practices
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A recent survey found that American consumers’ distrust of car dealerships isn’t necessarily influenced by their own experiences. 

KPA, a compliance solutions company for dealerships, found only one-third of consumers experienced negative behavior, such as deceptive selling, hidden fees, or dishonest salespeople. Over three-quarters of consumers surveyed don’t trust the dealership to be honest about pricing. 

The survey questioned 2,098 adults over 18 from January 16-18. 

Respondents’ experience with dealerships included: 

    • Pressure to purchase “add-ons” — 34% 
    • Hidden fees discovered when signing paperwork after a price had been agreed on — 30% 
    • Feeling like the salesperson was trying to” trick” them into a deal — 28%
    • Leaving one dealership and going to another due to suspicion of dishonest pricing — 29%

Their perceptions of dealerships included: 

    • Concerns about hidden fees when buying/leasing a vehicle — 86%
    • Distrusting car dealerships to be honest about pricing — 76%
    • Lacking in price transparency — 84%

The results could be interpreted to say consumers’ overall trust in an industry can be altered by the actions of bad actors and even by a perceived lack of transparency, even if the bad actors or communication tactics don’t represent the entirety of the industry. 

During a January meeting, the Collision Industry Conference Industry Relations Committee discussed how improper repairs could impact consumers’ trust in the entire industry, from the repair shop to the vehicle brand. 

Liz Stein, OEC national account manager, said improper repairs create economic costs of wasted materials, resources, and labor generated. It also creates a financial burden on car owners, insurance companies, and the collision repair industry. 

“We have to build quality into the process so that we can get to a predictable outcome,” Stein said. 

Stein said a solution requires enhanced training standards, advanced diagnostics and repair tools, and adopting quality control measures in the repair industry. 

Shops can also help make consumers more comfortable by keeping them informed throughout the collision repair process. Society of Collision Repair Specialists’ videos, such as “Consumer Tip: Out-of-pocket expenses” is one way shops can do this.

KPA said their results follow the Federal Trade Commission (FTC)’s Combating Auto Retail Scams (CARS) Rule. The consumer protection rule makes it illegal for dealerships to misrepresent certain topics, such as price, financing, or add-ons. 

The rule requires dealerships to tell consumers the drive-off-the-lot price and total monthly payment throughout the transaction. It also requires dealers to receive informed consent before charging consumers as a means to eliminate surprise or hidden charges. 

KPA advises dealerships on how to comply with the new rule. This includes creating a dedicated compliance team; identifying goals and timelines for achieving compliance; reviewing programs, plans, and policies to identify gaps, and conducting training and certification on CARS compliance. 


Photo courtesy of Fahroni/iStock

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