Could you sell cars ethically? Not unless your customers let you!
I had a dream last night that I went to work for the local Japanese car dealer as a car salesman. I was going to sell cars ethically, I thought, and not corral people into shitty deals - paying too much for the car and too much for financing. Or so I thought.
A young couple came in to look for a new car. He was a blue collar worker and she worked part-time at WalMart and was a homemaker. They had just moved to a new double-wide outside of town. They had an old clapped-out sedan, and wanted something new. She had her eye on a new midsized SUV, he wanted a monster 4x4 truck. And we had those, all shiny and new lined up out front. But out back, we had an acre of sedans, all marked-down and on sale, with generous factory rebates. No one wants sedans today, but SUVs and trucks sell themselves.
I showed them a fully loaded midsized sedan with all the bells and whistles. And they could have it for about $25,000 with the rebates and whatnot. They liked it, but were not too excited. When I showed the wife one of the midsized SUVs out front, her eyes lit up. "All the other Moms in the trailer park have SUVs! I want one too!" The husband wasn't too sure. "That's a fine car for her, but I would not be caught dead in it - it's a ladies' car!" he said. It wasn't a bad car, but it was only mildly optioned and cost about $35,000 with no rebates. It it only got mediocre gas mileage.
The husband went nuts when I showed him one of our monster 4x4 pickups out front. "Wait until the guys at work see this!" he crowed. It was pretty stripped and started at $45,000 - again, no rebates. They decided they had to have this monster truck. I pointed out that it got less than half the gas mileage of the sedan, and the monthly payments would be twice as much. But they would hear none of it. It was new truck, or walk.
So I ran their credit - it was a shambles. In addition to a lot of late payments, they had two accounts sent to collection. One was for a utility bill, and the other for a cable TV bill. "Oh, that's when we moved," the husband said, "I forgot to call and cancel the service, and those dicks at the cable company just wouldn't let it go!"
I gave them the bad news. With their credit rating in the low 600's, we could only offer them "subprime" rates, which would be rather steep - on the order of 15% or more. The pickup truck would cost about $1000 a month in payments for at least six years. I mentioned that if they could call the cable company and the utility company and pay off those bills (which were rather trivial) and ask them to remove the negative data from their credit report, I could get them a much better rate - saving at least $100 a month in interest, maybe more. It would take a month or two to get the bad data off their report, however.
But they ignored this suggestion. They wanted that truck tonight, or they were going across the street to the other Japanese car dealer. So I put together the deal and presented it to my manager. We couldn't give them but $500 in trade for their clapped-out junker, and that was being generous (we padded the purchase price by $500 to cover the fact it would be sent to auction and yield little, if anything). My boss had seen this sort of deal many times before. And he was able to get the loan approved, thanks to all the subprime lenders out there competing for this business these days - forgetting all about the massive defaults in subprime mortgage lending of just a decade ago.
So I gave them the "good" news - they were approved for the loan. I filled out the paperwork and took them to the "closing" room. Our closer is pretty good. Or bad, depending on your point of view. He sold them an extended warranty, undercoating, paint protector, and even the floor mats that already came with the truck. When he got done, he had added nearly $8000 to the purchase price. They signed anyway. Heck, it was only a hundred or so more a month, right?
We put temp tags on the truck and pushed their junker into the back lot. They drove off into the night, happy as clams, not having had to make any sort of payment - yet - on the vehicle. But I knew how it would play out. They would not be able to make the massive payments on this rig - much less the insurance payments. And in a few months, the repo man would come take it away, and their credit rating would really be ruined now. They likely would end up in bankruptcy court. They would be forced to fish even further down the food chain for their next car - and be forced to do so for many years to come.
I tried to warn them. I tried to steer them to the path of the straight and narrow - to buy something they could afford, at a decent price, with decent financing terms, that got decent mileage. But like lemmings, they ran right off the cliff, because they wanted - nay, felt they deserved - what everyone else had, a monster gas-guzzler status symbol that cost nearly as much as their home, perhaps more.
I woke up from this dream and realized that you could be the most ethical businessperson these days, and it wouldn't really make a difference. We all like to rag on the car dealer, the mattress store, the sleazy personal injury lawyer, or the rip-off cable company. But the reality is, these folks merely cater to our whims, and often our whims are the lowest common denominator. Since enough people seek out and accept shitty deals, these sellers need not offer better ones. And even if you offered better deals, many people would simply refuse to take them. And history - particularly recent history - illustrates this.
We do have choices in life, and often what we blame on other people is really the result of our own poor choices. Poor in every sense of the word - bad choices that affect our finances in a negative way, made by people who don't have two nickels to rub together. Blaming the car salesman for putting you in a bad car deal (or worse yet, a lease) is just externalizing. They offered you a deal you accepted. You could have left your pen at home. And the same is true for Cable TV - you could just decide, as many are now doing, to just not have it. We have been cable-free for more than a decade now, and let me tell you, it is not only tolerable, but better than having cable. Odd, but not consuming is oftentimes better than consuming.
I am not sure what the point of this was, but it was a weird dream, and I think I learned something from it. The next time I see a car salesman, maybe I will take a little more pity on him.