Post by Adam Turteltaub
The lease on my car was set to expire at the start of September, and I looked at the various options for replacing it. Like so many others, I found that that supply chain woes meant that any car I wanted was not available. And, for the record, I wasn’t looking for an exotic Ferrari. I just wanted a plug-in hybrid or electric car that could fit all six feet, five inches of me and wouldn’t break the bank.
With all good options for a new car eliminated, I decided to buy the hybrid car I was currently leasing. I called the manufacturer’s finance arm, and they directed me to the dealer as an option for doing the deal.
It seemed the easiest way to go. So, I set up an appointment, and in I went.
Big mistake.
When the salesperson showed me the detailed expenses with the sales tax and California registration fees there was also a $995 fee for processing the transaction. I asked him if this was required by the terms of the lease. He answered that, no, this was what the dealership charged to process the sale.
Not surprisingly, I told him no thanks, I’ll just send a check to the finance company and deal with the minor paperwork myself at the local branch of the Auto Club. He told me to hold on a second, and, after about five minutes, returned to say the fee had been magically waved.
So, basically, it was a “If you’re stupid enough to pay it, or really lazy then we’ll gladly take your money” fee. Being neither stupid nor lazy, I saved $995 and am now the proud owner of a car I have already been driving for three years, which, by the way, is a very strange feeling. My old car is now also my new car. It’s sort of a Schrodinger’s car.
Was what they tried to do legal? Probably. Was it ethical? Probably not. Was it smart from a business perspective? Definitely not. I’m not just a periodic buyer/leaser of cars. I use their service department, which makes me a customer who would likely never trust them when I do decide to replace my car.
More importantly, in this day and age of online reviews, it’s more than a little stupid to try and hit a customer up for a bogus fee. There are plenty of places for people to warn others of such questionable methods.
The dealership vividly proved that what’s ethical is better business. From the short-term perspective, getting $995 from a customer may be a good decision. Looking to the long term, it was a horribly bad choice.
It was also a good reminder that our work in compliance and ethics is very good for the long-term success of the business. And, maybe, the next time someone in your organization wants to do something similarly ethically deficient, ask them if that includes the dealer prep fees.