Dealership Trust Survey Results

The results of a new dealership trust survey provide some interesting insight into how consumers feel about the car buying or leasing process versus their actual experience.

Dealership Trust Survey

The KPA Dealership Trust Survey was conducted by the dealership safety and compliance firm with the help of The Harris Poll. Its goal was to to understand consumers’ opinions about the trustworthiness of car dealers and their feelings about the whole process of buying or leasing a vehicle. The survey involved asking 2,000 people about their opinions and car buying experiences.

Overall, the study found a big discrepancy between perception and reality. The study found that 76% of Americans don't trust dealerships to be honest about pricing. At the same time however only about one-third of Americans reported experiencing dishonest practices like deceptive selling, hidden fees, or dishonest salespeople.

What Study Respondent Said…

Here are some of the comments made:  

1: About their experience with dealerships…

• 34% have felt pressured to purchase 'add-ons.’
• 30% agreed on the price and when they went to sign the paperwork found there were hidden fees.
• 28% felt like the salesperson was trying to ''trick'' them into a deal.
• 29% left one dealership and went to another because they didn't think they were being honest in their pricing.

2: About their perceptions of dealerships…

• 86% are concerned about hidden fees when buying/leasing a vehicle.
• 76% don't trust car dealerships to be honest about pricing.
• 84% say price transparency is lacking at most car dealerships.

New Regulations Driving Change to Dealer Practices

KPA says the survey results come on the heels of the announcement of the Federal Trade Commission’s (FTC) Combating Auto Retail Scams (CARS) Rule, which would protect consumers from deceptive selling or leasing practices. The CARS rule was supposed to go into effect this summer, but as we reported earlier this year, the Federal Trade Commission issued an order postponing  its effective date due to a pending legal challenge.

KPA also says that over the past year, the FTC enacted additional rules for dealerships around pricing transparency, financing, unnecessary add-ons, and keeping customer information secure. Dealerships that don’t follow these laws and regulations can face heavy fines from the FTC at over $50,000 per violation, which is roughly equal to the cost of an average car ($48,000) on the sales lot. Beyond fines, violations can also make dealers appear less trustworthy to potential customers.

What Dealerships Should Do

“Buying or leasing a vehicle is a major financial decision for many Americans,” said Chris Fanning, CEO of KPA. “KPA partners with dealerships to help them operate in compliance with current regulations while also building trust with their customers and earning their dollars.”

To work towards compliance and build trust, Fanning recommends car dealerships focus on the following four practices…

• Create a dedicated compliance team: It should include key department stakeholders including marketing, sales, accounting, and finance.
• Establish Key Performance Indicators (KPIs): Identify goals and timelines for achieving compliance and track progress along the way.
• Review “Three Ps”: Programs, plans, and policies should be reviewed to identify gaps. Develop new ones that include CARS compliance.
• Conduct training and certification: Employees should be trained on CARS compliance when they are hired and throughout the year.

Photo Credit: wavebreakmedia/Shutterstock.com.