Dealers adding document fees will pay in the end

According to one source, the concept of being "penny wise but pound foolish" dates back 400 years to a guy who scrimped on food for his horses and later regretted it when they no longer could do the same work.

Here's a more contemporary scenario: A dealership, feeling a profit squeeze in tough times, packs every deal with hundreds of dollars in document fees and other hidden charges.

How shortsighted.

Consumers aren't stupid. Once the dirty, little secret of doc fees is widely known, customers will realize your dealership is engaged in the unethical redistribution of wealth.

And you didn't even give them a chance to negotiate. It's shameful and un-American.

Remember: Stealing a loaf of bread to feed your family is still stealing.

And don't forget that times are tough for consumers, too. When times get better, they will remember how they were treated at your dealership. And they'll tell their friends, who'll tell their friends, and so on and so onů

Dealer Earl Stewart in Florida has figured it out: Doc fees are a rip-off. Stewart has gone so far as to advocate a law that would outlaw document fees as a deceptive practice.

Smart, ethical dealers will find a way to help their customers, not look for ways to take advantage of them.

You can talk about customer relationship management until you're foaming at the mouth, but at the end of the deal either you're honest or you're dishonest.

Either you treat your customers with respect or you disrespect them.

But it's not only dealers who are being penny wise and pound foolish when it comes to their customers.

Here's another bonehead scam, this one pulled by some finance companies: Baking a vehicle disposition fee into the lease agreement. And it doesn't matter if it was disclosed in the lease contract the customer signed two or three years ago. It still feels as if you're taking a chunk out the customer's hide when he grounds the vehicle.

What do you think the odds are that customer will ever set foot in that dealership or deal with that finance company again?

And, trust me, he will tell his friends.

25

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters