Unit 02: Preconceived Notions of Car Dealers

The car sales industry has a major issue with customer trust. The stigma of a car salesman and dealership treating customers unethically is still a very real issue. Consumers believe that when they walk into the dealership they will be treated poorly and lied to about the vehicles they are interested in purchasing, so the dealer can sell a car. The auditing firm, Total Dealer Compliance (TDC), gave a survey in July 2016 to more than 200 consumers and reported that 65% of consumers believe that the business practices of U.S. based car dealerships are not ethical (Bond, 2016). So the questions being posited are how can dealerships quash this stigma and should they all follow a code of ethics?

The survey conducted by TDC in July only confirms the negative impression that the general population has about car dealerships, especially used ones. After so many years of unregulated business practices, it is understandable that this is the reaction that people have. To try and regulate this notion and prevent customers from believing that they are being taken advantage of, it would be smart for car dealerships and owners of these businesses create a code of ethics similar to that of the American Psychological Association (APA), the National Association of Social Workers (NASW), or the Canadian Psychological Association (CPA). If car dealers were to create higher standards of operation and treatment of customers and post these standards and codes it may help assuage the fears of consumers. Max Zanan, president of the TDC, believes that posting a code of ethics in the showroom that is visible to customers will help counter the negative preconceived notion (Bond, 2016). He also believes that people would be more inclined to shop where a code of ethics was displayed (Bond, 2016).

By following the example that the APA has provided along with their code of ethics and practicing standards, dealers would have an excellent start to creating their own code. Following the general principles of Beneficence and Nonmaleficence, Fidelity and Responsibility, Integrity, Justice, and Respect for People’s Rights and Dignity (APA, 2010) would be an excellent backbone for a car dealer’s code of ethics. Zanan also suggests in his interview to “advertise in an ethical and nondeceptive manner” and that vehicle “walk-arounds” be done honestly and not mislead customers about the capabilities and extras the car may or may not have (Bond, 2016). The next important step to take is making sure that all employees of the car dealership are educated and understand the code of ethics being enforced, this will not only comfort the customers, but the employees as well because then they know how they are expected to behave.

It is a never-ending battle for car dealers to overcome the stigma of being unethical and not treating buyers properly. To overcome this preconceived notion brought on by corrupt occurrences in the past, car dealers should incorporate some form of code of ethics; whether it be there own or modeled after another set of standards such as the APA’s, post it in the showroom or sales office for customers to see, and then educate their employees on the code and standards so they understand how to treat consumers. By doing these steps and acting on these standards it is sure to help eliminate the negative impression of car dealers and help people feel more comfortable purchasing a new vehicle.

 

References

American Psychological Association. (2010, June 1). Ethical principles of psychologists and code of conduct: Including 2010 amendments. Retrieved from http://www.apa.org/ethics/code/

Bond, V., Jr. (2016, August 28). Could dealers benefit from an ethics code? Retrieved October 05, 2016, from http://www.autonews.com/article/20160828/RETAIL/160829907/could-dealers-benefit-from-an-ethics-code?

4 Comments

  1. Kimberly Carney October 9, 2016 at 8:56 PM #

    Erika
    This is a very good example of an ethical issue and a good topic to bring up. I appreciate that you bring this up, especially when reading that you work at your family’s car dearlership. People generally have this notion of car salesman and dealerships treat them unethically. A few years ago, I was in the market for a new car. I dreaded the idea of going into a dealership to begin the process. I started out my doing research on the internet and then I went into the dealership. I understand how people do have that mindset because in many cases they do get treated poorly.
    I can definitely see the negative impression of used car dealerships. It makes sense that the unregulated business practices play a role in the fact that many people have this negative mindset. Principle C of the APA Code, Integrity, would apply to this study that you mention. If car dealers demonstrated integrity, then more people would be trustworthy of them. I agree that car dealers need to post the standards and codes and it may be helpful in gaining the trust of the customers and eliminate their fears.
    I think that if car dealers would follow the principles of the APA code, there would be less deception. However, I think that this has gone on for such a long time that it will take some time for customers to be trustworthy of the car dealers. I also think that there will still be some that don’t follow the principles and this just sets a bad example for the good car dealers.

    References:
    American Psychological Association. (2010, June 1). Ethical principles of psychologists and code of conduct: Including 2010 amendments. Retrieved from http://www.apa.org/ethics/code/

  2. William Arnold October 9, 2016 at 5:13 PM #

    I forgot to include the citation for the reference in this post. Here it is:

    Reference:

    Clear, J. (2016, October 7). How to spot a common mental error that leads to misguided thinking. The Mission. Retrieved from https://medium.com/the-mission/how-to-spot-a-common-mental-error-that-leads-to-misguided-thinking-dc26648761e3#.fmbicwd18

  3. Courtney Alyce Clark October 9, 2016 at 3:15 PM #

    Erika –

    I think you bring up an all-too-real scenario for most of us. Buying a car is a mentally- and emotionally-draining process and we rely a great deal on the integrity and trustworthiness of our salesperson. If they act unethically, we could well be stuck with the short end of the stick.

    One aspect that you call to attention about the salespeople being comforted by clear expectations being set through an adoption of an ethical code is one I’d like to explore further. I think this calls into question a clear level of basic competence needed to be in the business of dealing cars. You bring up walk-arounds and advertisements and conversations about a car’s capabilities, but I cannot help to wonder how salespeople without a great deal of knowledge about the specific cars on the lot would navigate that situation. I don’t believe that people wake up in the morning with the intent to deceive customers, but through ignorance of their inventory in terms of history and specifications of the vehicle, they may end up doing just that. In this respect, I’d adamantly advocate for the adoption of a similar clause to the APA (2010) regarding the Boundaries of Competence. In this sense, car salespeople would be responsible for their own knowledge of the dealership’s inventory and would only provide services to customers within the boundaries of that knowledge. The dealerships themselves also have an ethical responsibility in this facet to provide training for their salespeople regarding the unique specifications of each model on the lot.

    I really appreciate you bringing up this issue for discussion. I agree and would feel personally comforted if I knew the standards to which my car dealers were held on an ethical level. It would surely provide some basic trust from me as a buyer.

    References:
    American Psychological Association. (2010, June 1). Ethical principles of psychologists and code of conduct: Including 2010 amendments. Retrieved from http://www.apa.org/ethics/code/

  4. William Arnold October 9, 2016 at 3:08 PM #

    Erika,

    Thank you for this post. I think it is brave to address the issue head on. The negative associations can be so strong. I was reading a post recently in which the author, James Clear (2016), how we can make mental errors and believe in certain associations that simply do not exists. So, when we go to a car dealership and have a great experience and drive away with just the car we wanted, we do not necessarily associate that experience with the dealer, because it is what we expected in the first place–it is almost a non-event. However, when we have a bad experience, it sticks in our mind and we associate that with all car dealers.

    There is a lot to overcome with this since in our culture if someone were to say, “he’s such a used car dealer,” none of us would think it meant “he’s an outstanding member of the community and devoted husband and father.”

    I tend to think that a standardized ethics code across the industry would be beneficial as you indicate. Do you think each dealership could make a dent by starting with their own, posted codes?

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