Removing the emotional element of buying a car is a touchy subject with auto dealers, and understandably so. After all, emotion plays a crucial role in new- and used-car sales, and dealers are in business to sell cars.
Something triggers the impulse to shop, and that’s fine in the experienced consumer who’s been through the car-buying wars.
But what about the first-time buyer?
Erwin Weil, owner of Weil Cadillac-Hummer in Libertyville, has sold cars in the Chicago area for 45 years and doesn’t see many first-timers at his upscale agency. But there was a time when he owned a used-car operation on Western Avenue near Lane Technical High School in Chicago and dealt with young folks all agog about buying first cars.
“Would I try to talk a young woman out of a certain car if she had her heart set on it?” asked Weil. “No. She’d buy the same car somewhere down the street, and I’d lose a sale and nothing would be solved.
“You need to be careful, because cars are an extension of our personalities. You can’t step on somebody’s dream. When I had the Western Avenue lot, I would talk with younger buyers to learn exactly what they needed. But I wouldn’t tell a kid not to buy a specific car. I might make an attempt to taper or shape a sale if I felt he was unsure of his budget or whatever. I’d show options and ask, `Would this one work for you just as well?'”
Sometimes he had help. Weil remembered one teenage boy coming in with his parents, determined to buy a muscle car, “and acting really out of line, I thought. I sat there and listened, and it was obvious his parents didn’t want him to have the car. He was quite upset. He said, `If you don’t let me have this car, I’m gonna go buy a motorcycle and kill myself!’ It was childish, where his head was at. But what could I do? I sat there and let his parents handle the situation, and he didn’t buy the car.”
Wijdan Zapata, a Chicago medical secretary, said she could have used an Erwin Weil 15 years ago when, at 22, she went shopping for her first dream car–a 16-valve 1988 Volkswagen Jetta GLI.
Zapata initially checked out one dealership. At the last minute, though, something told her to take along her two older brothers for moral support.
“Oh, the salesman was obnoxious.” she recalled. “He saw me coming. He could read it in my eyes. It was all over my face. I wanted that Jetta–right then. I didn’t care how much I had to spend. I just wanted the car.
“My brother Sam kept pushing me away, toward the door, saying, `Come on, let’s look at other places. I’ll bet we find the same car for a better price.’ Sam was right. The next night we walked into [another dealership], and the exact same Jetta was there for $1,500 less than the first dealer. The same car with the same options. I still remember what I paid. It was $15,000, and it was a stretch for my budget. But I had my freedom and a very fast, very sharp car with a stick shift. I really wanted the stick!”
There was a time when the neighborhood banker might have had advice for rookie shoppers such as Zapata, but those days are mostly gone, according to Don Fisher, president of the Community Bank of Glen Ellyn/Wheaton.
Fisher, who has been writing loans for 40-plus years, has seen a fundamental change in the way most people finance automobiles, with banks involved in fewer of the transactions.
Zero-percent financing packages offered by manufacturers and home-equity lines of credit have taken the place of the savings-and-loan car note.
“I see parents using home-equity lines,” Fisher said of financing for first-time buyers. “That’s happened over the last five or six years. It’s very common. They’ll put the son or daughter’s car on the home-equity line and deduct the interest, and the kids make payments to them. The exception is when parents want to help a son or daughter establish credit and they’ll co-sign on an automobile loan.
“Cars are such an emotional choice,” Fisher said. “A young person comes in with his heart set on a Camaro; he doesn’t want to hear me say he should buy a Neon instead.
“My first question is always, `Did you already sign a contract?’ If the answer’s yes, it was a good deal. Every deal that’s been finalized is a good deal. We find a way to work with it.”
Credit considerations
But if the buyer hasn’t made a commitment in writing, Fisher will often suggest completing a credit score.
The buyer considers income and liabilities, then figures the amount of available credit. “A credit score gives a better idea of how much you can realistically afford,” he said.
Fisher said his bank typically works with Equifax and Trans Union to obtain credit scores.
Data are submitted and your credit score reflects an analysis of anything in your background that might indicate risk. How much credit you already have, your bill payment history, length of time on job, length of time at your residence, how much you owe, your net worth, income and monthly expenses.
A buyer is given points in each of these areas, and others.
There is an industry scoring formula.
A credit score of 800+ is sterling. Average folk come down in the 700s.
Younger buyers who haven’t had credit established for a lengthy period and who haven’t been in the work force for more than a couple of years have lower credit scores. In marginal cases a lender might ask to see another year’s tax return or evidence that you’re not carrying huge balances on all of your credit cards before writing a loan.
“But again, cars are an emotional purchase and that doesn’t only apply to young people,” Fisher said. “A few years ago I bought a [Chevrolet] Corvette. I traded in my motorcycle. I’d always wanted a Corvette. I owned my Corvette for two years and drove it maybe 2,100 miles, and got it out of my system. Now I have a Ford F-150 Lightning I drive in warm weather. Same emotions.”
“Everyone’s excited about buying a car,” said Dan Johnston, Central Region vice president for CarMax. “I don’t care if it’s a minivan or a Corvette. We don’t try to minimize excitement. You should be excited, but not anxious, and price is a big part of the anxiety for many first-time buyers.
“What we’re finding is that most have pre-shopped online and already have a good idea of what they’re looking for when they arrive,” Johnston said. “They’ve seen our posted prices. They understand our policy. There is no negotiating. And we don’t have a finance guy. Our financing is a la carte. We have several banks we work with, and it’s a matter of the sales consultant putting in the numbers and then waiting for their responses. Buyers seem more comfortable working with the same person all the way through.
“We try to help the first-time buyer target the right vehicle. Why this particular car? What features do you need? Have you considered similar models?”
Trading in a dream
CarMax-type options and Internet shopping weren’t available in January 1983, when Lynn Janulis, a patent agent with a Chicago law firm, fell for a low-mileage 1979 Triumph TR7 on a used-car lot.
“Oh, it was totally emotional–not sensible at all,” she said. “I loved the style and the whole British thing. Plus it was unique and cool, and it was blue. I took my friend Barb with me to test drive the Triumph, because I didn’t even know how to drive a stick. I bought it and she drove it home and taught me that night how to drive it.”
Two years later, after three snapped accelerator cables, a blown head gasket and multiple skirmishes with “a horrible electrical system and [retractable] headlights that stuck all the time,” Janulis traded in her TR7 for a new Volkswagen GTI she’d drive 200,000 miles in 15 years.
The GTI was sensible, dependable. But not the same emotional investment as the TR7.
“I’d buy the Triumph again,” she said. “It was a blast. I always talk fondly about the TR7. A great little car despite all my problems. The insurance was too costly. Everything about it was too costly–but it was so cool, fun and different.”
And too emotional?
“Oh yeah, totally emotional. And utterly irrational.”
Tips for the first-time buyers
David Cole is president of the Center for Automotive Research in Ann Arbor, Mich., and a veteran observer of industry trends. While acknowledging the emotional element in buying a car, he was quick to emphasize differences in the market from a generation ago.
“In the 1950s and ’60s, Americans had 100 cars to choose from,” Cole explained, “whereas now it’s closer to 1,400.
“In terms of affordability, the real price of cars has fallen as wages have expanded. Ten years ago, we said it took 30 weeks of wages to buy the typical new car. Now we’re down to 20 weeks. That increased affordability means buyers stretch to buy more car–because they can, and cars are indeed an emotional purchase,” Cole said.
As for young people and first cars, Cole noted three points:
– Younger buyers are more independent in 2003 and have higher expectations. When swarmed and pressured by pushy sales associates, they’re apt to turn around and leave. “They know they can walk–and they do,” Cole said.
– Younger buyers often make use of the Internet. “They’re cruising the world of autos–price shopping, looking at accessories. They know exactly what they want and what they’ll pay for a package.”
– There are two types of buyers: Those who view a car as an appliance and those who see it as a fashion statement. “You don’t drive a car–you wear it!” laughed Cole. “The young person who views a car as a style statement–he’s the preferred customer. But even with the appliance buyer there’s an emotional element. You’re writing a big check. This is a long-term obligation for most people.”
— Jim Mueller
