If you don’t qualify for a friends-and-family deal or a supplier discount, don’t be discouraged.
Good deals on General Motors, Chrysler and Ford vehicles are within reach.
But you have to understand the lingo of fees, hidden incentives and company-only discounts.
And, as Haslett, Mich., resident Scott Watkins said, you have to follow his three words of advice: Research, research, research.
He should know.
As director of market and industry analysis for the Anderson Economic Group, he consults with auto dealers and is paid to understand the marketplace.
“It’s possible for the customer to go in and get a good deal if they know what the dealer is paying for the car, and if they know what dealers in that area have been selling the car for recently,” Watkins said.
That information was once cloaked by dealers. Now it’s easy to find at websites like Edmunds.com and TrueCar.com. Watkins said having that ammunition helps you get a salesman to “bypass some of the negotiating and hassle.”
“Good salesmen will see that you’ve already done your research,” he said, and if you’re serious about making a purchase, they’ll frequently head for their bottom-line offer.
Watkins bought a Ford Escape at less than the “friends and family” company discount, and thinks others can do the same.
Still, Watkins said doing your homework aside, some dealers can risk turning off customers if they’re not clear about the different discount plans they offer and who qualifies. That’s especially true for employee plans.
“You may have not read the fine print hidden down at the bottom,” he said. “When you come in with a number in mind, and realize it’s not for you, you’re going to feel like you didn’t get the deal you thought you would.”
With the nation’s highest concentration of people who work for the Detroit Three auto companies, Michigan’s Ford, Chrysler and General Motors dealers have long relied on those employees for a big share of their business.
But the alphabet soup of discount plans leaves some consumers without a connection to the car companies feeling left out.
Some dealers are responding to that angst — and say they must to keep business from heading to competitors like Toyota and Honda.
Carl Galeana, owner of the Galeana Automotive Group of Chrysler dealerships, said while he still advertises to employees and those connected to Chrysler, he’s started “weaning off of that” in recent years.
“This is still a company town, and for years, we were all getting that business,” he said. “But we’re changing how we do business. It’s just not the smartest thing anymore to target just employees for most of us. We have to work on the retail customers if we’re going to succeed.”
Galeana’s sales figures show a striking change in his business compared with a few years ago, before Chrysler’s bankruptcy.
Discounted sales to employees, suppliers and “friends and family” are about half of his monthly sales. It used to be almost twice that.
“We used to do 85 percent or 90 percent employee deals,” he said. “Not anymore.”
Galeana said it’s much easier to sell to employees who are “going to buy Chrysler product anyway.”
But there are fewer employees as the automakers have downsized their work forces, he acknowledged.
“I have to reach beyond that to the customers that will come to me because they want these cars,” he said.
Those changes could be vital to consumers not only looking for a good deal, but fair treatment — and some Detroit Three dealers who focus only on those connected to the company are driving buyers to imports.
Diane Morris, a Birmingham, Mich., doctor, was in the market for a new car a year ago and wanted to buy from among the brands of the Detroit Three.
First, she said, she tried a Chrysler dealer, then Ford. She later tried two more Chrysler dealers.
“They started going over some numbers with me and said, ’Well, if you’re on the A Plan ... ,’ and I said ’I’m not on the A Plan. But what can you do for me?’ “ Morris said. “I was like a deer in the headlights. They were like, ’Well, do you know anybody connected to the automakers?’ “
Morris bought a Hyundai Sonata.
Chris MacKenzie of Pontiac, Mich., already knew what it was like to get an insider deal — his grandfather worked for General Motors, and while he was alive, MacKenzie enjoyed the benefits of employee pricing.
But his grandfather died last year, and his next trip to the showroom was very different. Unable to get a deal at a price he found reasonable, he leased a Toyota RAV4.
Luke Sandoval, who lives in northern Macomb County, said he leased a Ford Escape in 2008 and loved it. So much so that he planned to lease another. But when Sandoval returned to the same dealer recently, hoping his loyalty might help him bargain a good price, he was disappointed.
The salesman kept “kept quoting me these employee prices, but I said ’Look, we don’t work for you guys,’ “ Sandoval said. “It was like he didn’t get it.”
Sandoval leased a Honda CR-V Special Edition instead.
Lars Perner, a professor at the University of Southern California’s Marshall School of Business, said study after study shows buyers are turned off if they don’t qualify for advertised prices.
“If you’re paying regular prices, you feel like you’re overpaying,” Perner said.
Tom Quinn of Berkley, Mich., who had been in the market for a new midsize Dodge or Ford, said he became so frustrated with getting a clear picture of what a new car would cost, he bought a used Mercury Milan from a private seller.
“I want to know what I can buy it for, not what everybody besides me can buy it for,” he said.
Some dealers, though, say employee-targeted marketing is the only way for them to stay in business.
Jim Seavitt, president of the Detroit Auto Dealers Association, is also owner of Village Ford in Dearborn, Mich., a few miles from Ford’s international headquarters. Seavitt said up to 95 percent of his sales are to an employee, retiree, supplier or a friends-and-family member.
“Everybody in Dearborn knows somebody,” he said.
Seavitt sells half as many cars and trucks as five years ago — but the percentage of those sales still tilts heavily to employees or other insiders.
When a non-connected customer wanders in, Seavitt said he tries to show how Ford’s friends-and-family discount is “pretty close to retail” already, which “usually makes them feel more welcome.”