Liz called.
She was upset and had every right to be.
She wanted a 1994 Mercedes-Benz C280. Even had the money. But after making several calls she couldn’t find a dealer who had the car she wanted with the equipment she wanted and in the color she wanted-until the last dealer she called.
“Come on down,” the salesman chirped into the phone.
“So you have the car in stock?” Liz asked one last time.
“No, but we can have it for you in 48 hours,” the salesman said. “Since we sell so many Mercedes, we have access to any car we want at the distribution center in Franklin Park.”
So Liz bundled up and took the one-hour drive to the dealership. She signed the paperwork and handed over a $500 deposit and then drove home happy in the knowledge that when she returned 48 hours later she’d be the owner of a brand new Mercedes C280 sedan.
Then came the phone call from the dealership.
Seems another dealer sells just as many cars as this one and also has access to any car it wants at the distribution center in Franklin Park. So Liz can’t get her car in 48 hours. And oh, by the way, drive on back and give us another $500 if you expect to get a C280 at all, Liz was told.
So now Liz was out $500 and two hours’ drive time. Actually only the two hours drive time because if she is willing to wait the several days it takes for the dealership to write her a refund check for the $500 she left with them, she will get her money back.
“Have you ever heard of anyone treating a woman like this?” Liz asked.
“Yes,” we replied. “Men, too. You think the salesman cared if you were a woman or a man or a Lippizzaner? The only thing he cared about was your money, the five bills bearing Franklin’s picture that you gave him and the five additional photos of Franklin he wanted you to bring him back. Skulduggery has no sexual preferences.”
The scheme, we told Liz, is common and occurs just about any time there’s a hot-selling car in the market. It’s called the law of supply and demand. When supply is down and demand is up, some dealers start to show their fangs.
Dealers are allotted cars, usually on the basis of how many of the previous model they sold. If one dealer sold 100 Mercedes 190s (the car the C280 and its companion C220 replaced) a month and another sold 100 a year, the dealer who sold 100 a month would get more than the one who sold only 100 a year. It’s only fair.
Let’s say the dealer gets five C280s a month to sell-all the manufacturer can afford to give him to ensure that all dealers get at least a few, since there’s only going to be about 25,000 C220 and C280s to spread among the more than 300 Mercedes dealers nationwide this year.
If the dealer gets his five C280s and writes up 10 orders, that means customers 6 through 10 are going to have to wait until the second month to get their cars. If the dealer writes 10 more orders in the second month, the five people who didn’t get their cars last time will get them this time, but the 10 new customers will be pushed back into the third month. If the dealer writes 15 orders in the third month, five of the 10 people from the second month get their cars and the five who don’t, along with the 15 new buyers, are pushed back into the fourth month.
The problem only compounds itself.
The other problem is that when you order the car, some dealers will say, “Hey, no worry, you’ll have it in a couple of days to a couple of weeks.”
By saying you won’t have to wait when ordering through that dealership, even though people are having to wait at every other dealership around, the salesman gets you to place a deposit.
Placing the deposit serves two purposes: it stops you from shopping elsewhere for a better deal or taking delivery sooner, and it fattens the dealer’s bank account. Though interest rates are pitifully low, he’s earning a little money on all the deposits he has taken. And if he’s demanding $1,000 deposits, his savings account could be filled to the brim while you wait for your car. Better to earn 2 percent on $1,000 than to earn nothing.
When shopping for a high-demand/low-supply car, don’t be taken in by promises. Your first choice would be to take the vehicle off the floor. However, if it’s in real high demand, most dealers won’t part with that one because then they won’t have one to attract even more buyers.
Ask the dealer his allotment. He knows. Ask how many orders are ahead of you. He knows. Ask if you can slip him some money under the table to move up on the allotment list. If he agrees, run out the door as fast as you can because that means anyone else who offers him a bribe is going to move ahead of you.
If you do make a deposit and choose to wait, have written into the contract that the deposit is refundable in full after so many weeks if the dealer can’t provide the car. If you want to have some fun and see how serious your dealer is, make it fully refundable with interest. Hey, if the dealer is going to make interest off your money, why can’t you?
But the sermon is only half over.
We called the Franklin Park zone office to ask why Liz was treated so poorly. Officials there were quite familiar with Liz, who they said would never be mistaken for Mother Theresa. It was suggested we call the dealer.
Officials at the dealership also knew Liz, who, they said, probably would never win a Miss Congeniality contest.
Liz had indeed inquired as to the availability of a C280. She was told there was one just like she wanted at the Franklin Park distribution center, and if she put down a $500 deposit the dealership would attempt to get it within 48 hours.
Rather than take the one-hour ride that day, Liz waited two days, by which time another dealer had snarfed up the C280. Liz was not told she needed another $500 deposit but was told that the dealer would undertake a three-way swap with two other dealers to get her car.
After two days, Liz was called and told the swap had been made. The car she wanted was at the dealership. But there was one change. The car the dealer got in the swap had $1,500 more in options than the one she wanted, but the dealer still would sell her the car at the agreed-upon price. Liz said OK. Be right down.
Rather than drive right down, two days later she called and told the dealer to forget it, that she decided against the car and wanted her money back. The dealer mailed a check. Because dealerships are a close-knit group, it was learned that Liz was now negotiating with a dealer closer to her home.
What this lesson proves is that when people call to complain, they should explain the whole story and not leave out a few parts.
Since the discussion this morning is about the troubles associated with hard-to-get cars, this experience reminds us of one last lesson: When trying to obtain a hot seller-and the C280 is just that because it’s not only one of the best cars Mercedes has come up with in the last decade, it’s also one of the best cars on the market-don’t play the deposit game.
The game is played like this: You figure your chances of getting the car you want are better if you order from a lot of dealers rather than just one, so you visit as many as six different dealerships and place a deposit-usually a small amount, say $50-with each one.
When the first dealer calls to say your car has arrived, you then call the other dealers saying you have changed your mind and want your deposit back.
Sometimes the dealers return the money, sometimes they don’t. We wouldn’t. For no other reason, the salesman who spent time writing up the order deserves at least some money for his or her trouble because they might have lost a true sale while spending time with you.
That settled, let’s turn to something a bit more cheerful.
Marian called.
Her husband leased a new Cadillac Concours. Had it only 10 days before he had a heart attack. He won’t be able to drive again.
So Marian called the dealership and told them about her problem. She wanted out of the lease because her husband couldn’t drive. The dealer agreed to let her out of the lease-for a payment of $6,800 or $680 for every day hubby had the car before being stricken.
“The only way you could have gotten out of the lease without a penalty payment is if your husband had died,” the dealer said.
Marian was told she should be thankful the dealer was showing her compassion because, “Some dealers would have gone after the estate for their money even if your husband had died.”
In fact, to show just how nice a guy he was, the dealer, after getting his $6,800 check, told Marian she didn’t have to pay the next $761 monthly lease payment that was due.
So the dealer had a heart, after all.
Some stories do have a happy ending.
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Jim Mateja appears in Transportation on Sunday, Business on Monday, and Your Money on Friday.
