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How to strike a balance with vehicle disclosure that sells cars legally and makes customers happy
You do everything you can to keep your inventory moving— no car sits on your lot for more than 60 days, and you always have a steady stream of in-demand used vehicles coming in. You like to have a variety of vehicles for customers to choose from, at all different price points. Not everyone wants a brand new car, and you want to make sure that anyone who sets foot in your dealership will find what they need.
Whether you’re buying at auction or accepting a trade-in, you’re not always going to get cars, trucks, or SUVs that have had the easiest lives. You may find after buying a used car that it’s been in a couple of accidents, used to roam the city streets as a taxi cab, or served as a government vehicle. Though it might be a little harder to sell this car, disclosure about its past is non-negotiable. You must be honest with the consumer about what they may be getting into because it isn’t just the right thing to do—it’s the law.
Why you need to disclose everything
To begin with, you need to follow the Federal Trade Commission’s (FTC) Used Car Rule, which requires you to display a Buyers Guide in the window of every used car on your lot. The Buyers Guide is a type of vehicle disclosure that tells the customer if the car is being sold “as is” and if there are any applicable warranties.
However, in addition to the Used Car Rule, you must fully disclose a vehicle’s known history. You can’t play dumb and insist you had no idea about a vehicle’s past or potential defects.
“Vehicle history information is a material fact and, therefore, must be disclosed under state unfair and deceptive acts and practices laws,” said the National Association of Attorneys General. “There are a number of sources where dealers can find this information, including vehicle titles, state motor vehicle record databases, NMVTIS, private services such as CarFax and AutoCheck, auction announcements, and manufacturer records. The information is there and dealers have greater access to it than do consumers. Whatever information the dealer can reasonably obtain should be disclosed.”
Vehicle disclosure requirements can vary from state to state, but when in doubt, overshare. You may feel like it will hurt your chances of making a sale—and truly, it might—but would you rather lose the sale or get a lawsuit filed against your dealership? Then you won’t just have lost the sale—you’ll lose your job, too.
Help customers see the positive side of vehicle disclosure listings
Disclosing a vehicle’s checkered past doesn’t have to be a deal breaker. It’s completely possible to sell imperfect vehicles and have a customer be happy with their purchase. You just need to try to sell those cars to the right customers when they step on your lot. A less-than-perfect vehicle could be just the ticket for someone who has an extreme need for a car but doesn’t have a lot to spend. Or, for an individual that just wants something basic for the five-mile roundtrip drive to work every day. There are plenty of people who just don’t want all the bells and whistles.
If you have a customer who’s on the fence, there can be some positives to highlight to help them make a decision in your favor.
1. Former rental vehicles
It’s impossible to know how many different people have driven a rental vehicle, but in general, they can be an excellent purchase. When people drive rental cars, they’re often overly cautious because they’re not driving their own vehicle and don’t want to deal with the repercussions of any fender benders. Rental car companies also usually have strict maintenance policies and keep up with oil changes, tire rotations, and any repairs.
2. Former government vehicles
The government leases fleet vehicles for three to five years, and then the dealer sells them at auction. They’re usually pretty good quality, have been well-maintained by the government, and have only had one owner. How they were used, however, can vary significantly.
3. A Lemon Law “buyback”
The term “Lemon Law” is enough to strike fear in the heart of a worthy buyer, but don’t let them run away too quickly. Try to explain that it means the vehicle was reacquired by the vehicle manufacturer because of a specific warranty defect or defects. When the manufacturer gets the car back, they will usually try to address the problems and repair them—meaning the car should be safe to drive now.
You never want to tell prospective buyers anything that isn’t true, but you also don’t have to be entirely negative about vehicle disclosures. It’s a service to your customers to be transparent so you can frame it that way. Be honest about the vehicle’s shortcomings, but be sure to talk up any positive points as well—top auto salespeople are experts at turning lemons into lemonade especially when the price reflects it.