You`ve seen the ads, the ones that require you haul out the magnifying glass to read the fine print and the law review to interpret them.
”$1,500 UNDER dealer cost +”
Some might stop and ask, ”Why would a dealer spend money advertising cars at a loss?” But others are attracted to the lure of something for nothing, or at least something for $1,500 less than the guy who`s selling it supposedly paid for it.
When you find the explanation of the + it states: ”Plus options,” which means the dealer will get the $1,500 back, and then some, by the time he`s through.
What`s typically being advertised is the base price of the car minus all options. Try to find a base-price car. It`s easier to locate a unicorn.
”1991 Volvo 740 at $266 per month +”
Absolutely, except that once your eyes focus on the minuscule print it says: ”+ With 10 percent down and 48-month lease.”
Then there`s the ”Ultimate Luxury-$345 per month +”
To be sure, unless you track down the + and learn that those who will pay only $345 also must come up with ”10 percent down, plus tax, title, registration, documentation fees, extended warranty and options.”
By the time the fees plus the extended warranty and options are added you`ll need a second mortgage on the cottage to make the monthly payment on the car.
A real beauty is the: ”Brand new Toronado-$10,857 +”
But the + explains: ”Based on one-third down plus all applicable incentives.”
If + doesn`t land you in debtors court, there are always the old standbys to hook shoppers, such as ”Factory authorized discounts,” ”Factory authorized sale” or ”Liquidation sale.”
If a factory authorized a discount for one dealer, every other dealer selling that make would run-not walk-to his lawyer and file a price-fixing or restraint of trade suit. And the lawyers would win.
That`s also why the factory doesn`t authorize any sale. It wants its dealers to sell cars. After all, that`s why they`re in business. But the factory doesn`t tell one dealer it can sell cars at a discount this week, another dealer next. Again, that would be price-fixing and restraint of trade. Liquidation means to dispose of what you have because you`re going out of business. But some dealers use it to mean they want to dispose of existing inventory to make room for new inventory, which will have to be liquidated next year.
With the gimmicks in advertising, the consumer doesn`t really know what he or she is going to pay for a car until in the door. That`s when the surprises start.
A recent issue of the ”Headline Club News” noted that when shoppers were sent to Chicagoland dealerships to buy cars, the difference between the advertised price and what dealers demanded ranged from $657 to $3,326 more.
What`s intriguing is that there is a movement under way to clean up advertising so the price you see is the price you pay-or at least use as a starting point to negotiate downward, rather than have the salesman use it as a springboard upward.
The Illinois attorney general`s office came up with a proposed schedule of advertising guidelines a few years back. Now the Chicago Automobile Trade Association, which represents more than 700 area new car dealers, is leading a movement to shape those proposals into a workable set of guidelines.
The association is working with the Illinois New Car Dealers Association, which represents Downstate dealers, so any guidelines would be effective statewide.
”We recognize there`s a problem, and we`re committed to correcting it as an association,” said Jerry Cizek, executive vice president of the Chicago group. ”We don`t want a few dealers spoiling it for all the rest.”
”When a few dealers do wrong, they pull the other 700 members of our association down with them and we all get castigated,” adds Fred Tuch, a Buick dealer in Chicago and association president.
”Dealers are going to sell based on price, but what we want is that they present the price in a fair and accurate way so that the consumer knows what he or she is getting for the dollar,” Tuch said.
One reason the association is acting to clean up the ads is that most of the complaints about advertising come into its office not from consumers but from other dealers griping about what their fraternity members are doing.
”Dealers look for an edge over one another in order to make the sale,”
Tuch said. ”But when you come across an ad with a tiny asterisk that says the reason for that low price is that you must come up with $2,000 cash or trade first, well that kind of stuff has got to go.”
A set of guidelines would be only as effective as whatever enforcement is established.
”We don`t know what the penalties should be,” Cizek said. ”A fine? We don`t know. But without some type of enforcement, the guidelines won`t work. We`ll start with print advertising but would expect this to eventually affect the electronic media as well.”
Joe McMahon, director of governmental affairs for the Illinois New Car Dealers Association, said neither his nor Cizek`s group wants dealers to be judge and jury over their peers.
”We`d like the attorney general`s office to be the enforcer,” McMahon said. ”We don`t want this to become a dealer versus dealer thing. What we`d like to see is: `These are the guidelines; here`s a phone number to call if someone violates them; and these are the penalties when someone does violate them.` We`d like consistency in ads and consistency in enforcement.”
To come up with guidelines, the Chicago and Downstate dealers groups hope to set up a meeting with the Illinois attorney general and secretary of state`s offices. This being an election year, and with Democratic Atty. Gen. Neil Hartigan and Republican Secretary of State Jim Edgar running for governor, it is hoped that all sides will be concerned about reform, rather than who takes credit for the reform.
Notes
Isuzu enters the four-door utility vehicle fray with a new model called Rodeo, priced at $12,499 for the base two-wheel-drive S to $17,899 for the four-wheel-drive LS with automatic transmission. Also new from Isuzu is the Stylus four-door sedan, the replacement for the I-Mark, which in Chevrolet dress was called the Spectrum before it was replaced by the Storm. Stylus starts at $9,199 for the S sedan and $11,299 for the XS, which comes with 5-speed manual only. The Rodeo will be built at the joint venture Subaru-Isuzu plant in Lafayette, Ind.
Rodeo will be powered by a 2.6-liter, 4-cylinder that develops 120 horsepower at 5,000 r.p.m. or a 3.1-liter V-6 that develops 120 h.p. at 4,400 r.p.m. The 3.1 will be standard in all 4×4 models. Antilock brakes are standard.
Stylus will be powered by a 1.6-liter, 95-h.p., 4-cylinder teamed with 5- speed manual or 4-speed automatic.
Honda priced the Acura NSX sports car at $60,000 with 5-speed manual transmission, $64,000 with automatic. It went on sale last week.
Put lots of faith in the government`s crash test data? Don`t buy a car unless you check out the data that states whether or not a dummy suffers a
”fatal” head injury in the crash tests? A report from Ward`s Auto Dealer magazine raises doubt as to the reliability of such crash data. The trade publication says a Mercedes-Benz engineer claims some automakers deliberately fudge on the crash tests to make some cars appear safer than they are. How? By letting crash test contractors loosen lap belts secured to the dummy. This means that in a severe frontal impact the dummy submarines or slides under the belt rather than smacking into the windshield. If the dummy doesn`t hit the glass, it can`t suffer a fatal head injury, the primary statistic in the government crash tests. Reportedly the National Highway Traffic Safety Administration is looking into the charges.
Changes among Chicagoland car dealerships find Mathias Olds becoming Wallner Olds; Harborside Pontiac-Cadillac is Gary Lang Pontiac-Cadillac; Jack Brown Buick became Dave Miller Buick; Bill Salidas Jeep/Eagle became Premier Jeep/Eagle; Du Page Jeep/Eagle became Jeep/Eagle of Du Page; Anderson BMW added Volkswagen in Crystal Lake; Woodfield Lexus has opened; Arlington Lexus opened in Palatine; Lexus of Naperville has opened; and Zaragoza Olds has opened in Gary.
Chrysler will continue its program to provide up to $500 in incentives for handicapped people who purchase or install special adaptive equipment such as hand controls or wheelchair lifts in 1991 model Chrysler vehicles. For details, call 1-800-255-9877.
Volkswagen said it will offer a money-back guarantee to customers buying a new 1990 or 1991 Passat sedan or wagon starting Aug. 10. The program will provide for a full refund within 30 days or 3,000 miles of the purchase. Sales tax, title and license fees also will be refunded.
Ford offers a new 4.6-liter, 190-h.p. (210 with dual exhausts) V-8 in the Town Car for the 1991 model year. It replaces the 5-liter, 150-h.p., V-8 offered in the 1990 model year. No word on fuel-economy ratings.
In a strange move, GM did away with the office of vice president of public relations and moved public relations into the domain of a new communications and marketing staff.
Spotted on a recent trip through Wisconsin: A car phone-equipped Yugo.
Sales of Range Rover utility vehicles totaled 452 units in July, up from 356 a year earlier.
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Jim Mateja`s column appears Sunday and Monday.
