"Dateline NBC" on Dec. 5 aired a one-hour special investigative report on car dealerships. "The report focused on a number of dealerships, and as we expected, was highly negative," said the American International Automobile Dealers Association (AIADA) in a prepared statement.

AIADA on Dec. 6 distributed general talking points and specific responses to charges made in the report. Additionally, the dealer organization assembled a list of recommendations designed to help reduce any potential negative fallout from the report.

"While we recognize that many of the incidents documented in the report occurred at a limited number of dealerships, it is important to realize that the consumer public is unlikely to distinguish the behavior of a handful of individuals from the general practices of the industry at large," the AIADA said.

"Most dealers are ethical and honest," the AIADA response said. "The vast majority of auto dealers in this country are reputable. Most have longstanding ties to their communities. They are not so much in the business of selling cars, as they are in the business of building lasting relationships with customers, neighbors and other members of the community. It was irresponsible for Dateline to repeatedly state dealers were orchestrating a 'well-organized nationwide scheme' to cheat customers.

"Dealers are committed to improving the customer experience," the AIADA response continued. "Dealers continually seek new ways to improve the sales experience. In fact, dealership and sales performance is continuously measured through intensive customer service surveys. These surveys invite customer feedback and gauge satisfaction in virtually every aspect of the sales experience."

According to the AIADA, most dealers welcome the findings of the report. "Dateline's investigation exposed a handful of unscrupulous dealership employees," the AIADA said. "To the extent that this occurred, the industry as a whole gains. The average dealership benefits when a handful of salesmen with bad business practices are exposed."

According to the AIADA, dealers frequently offer lower-than-average rates and terms on loans. In the Dateline report, consumer advocate Remar Sutton was asked about lowest-possible loans offered by car dealerships. He responded to reporter Lea Thompson by saying, "that never happens."

"Sutton is either incredibly misinformed, or else he was deliberately misleading viewers," the AIADA responded. "In fact, dealers very often offer rates to consumers that, even 10 years ago, were unheard of. And these ultra-low interest loans are generally made available by manufacturer-owned lending institutions."

According to the AIADA, "No one deserves more credit for the wide array of finance options available to consumers on new cars than auto dealers." As AIADA board member Jack Fitzgerald pointed out, "When I began as a Ford salesman in the 50's, I recall there was much less competition among car loan providers, although there were more than twice as many new car dealers than today."

Fitzgerald credited manufacturer-owned lending institutions for forcing banks to drop the average rate of car loans from about 10 percent for customers with good credit, to the low rates widely available today.

"Dealers offer consumers a valuable service because they borrow money at a wholesale rate - a rate that is typically not available to the average consumer," the AIADA said. "And these low rates are often passed on to consumers. Dealers do earn a commission, or a mark-up, on the loans they process, but they deserve this commission because of the overhead costs associated with serving as a loan clearinghouse. Today's car dealers provide all the car loan functions needed to complete a loan transaction that local banks do.

"Every story has two sides," the AIADA said. "In today's age of media balance and fairness, it is important to note that Dateline apparently made no attempt to document a positive buying experience. Dateline spent the better part of a year producing the report, so it is difficult to understand why they did not seek more factual information. One major omission Dateline producers made in the report was that they failed to mention four independent, credible surveys - Gallup, Wirthlin Worldwide, Ernst & Young and Consumer Reports - measuring customer satisfaction levels. Each report independently confirmed that consumers expressed between a 90 percent to 95 percent satisfaction rating when purchasing a new car."

According to the AIADA, "While the Dateline report narrowly focused on customer experiences at a limited number of dealerships, it is important to realize that customers coming into your dealership may display new levels of uneasiness or mistrust as a result of the report. Customers may reflect or mention the Dateline piece for weeks or months to come. As such, it is important to use this as an opportunity to provide your employees with additional training and/or to self-audit your operations."

Among suggestions that AIADA has compiled from dealer and industry experts are the following:

• Display company policies prominently. Ensure that all your employees are familiar with your company policies especially where they interact with customer service. Where appropriate, post your company policy/policies where customers can easily reference them.

  
  

  
  

• Assist your customers by educating them. Many customers don't know the difference between such items as MSRP, Factory Invoice or Kelly Blue Book values. Encourage your employees to respond to such inquiries openly and honestly. For example, most customers don't realize that the Factory Invoice is the amount listed on the actual invoice sent from the factory to the dealer and may not represent the final costs to the dealer. Your ability to educate today's customer will result in the establishment of long-term relationships with them..

  
  

  
  

• Use the Dateline experience to differentiate your dealership from others. Dealers are creating new customer service programs everyday. Highlight the buyer protection program, share your pricing philosophy and other programs that you have implemented to improve the customer experience..

  
  

  
  

• Review your F&I operations. Ensure that customers are treated respectfully and in a manner that respects their privacy. As it relates to financing, advise the customer that your dealership offers a range of competitive financing options. Help them to understand that interest rates are largely determined by income, credit history, and myriad other factors..

  
  

  
  

• Educate your customers. The Dateline program implied that consumers are unaware of packages (protection, warranties and otherwise) they may purchase or are included on the invoice. Encourage your employees to review each item included in the purchase price or that may be listed on a supplemental sticker. Have employees review and explain the purpose of each document that the purchasing customer will sign throughout the buying process..

  
  

  
  

• Review the training and certification of each F&I employee. Each month, AIADA's affinity partner, CNA National, offers a state-of-the-art-training program for F&I. For more information on the program, contact Matt Curran, (800) 345-0191, ext. 739. In addition, the Association of Finance and Insurance Professionals (AFIP) offers the only F&I certification program recognized industry wide. For more information on AFIP visit www.afip.com, or contact Dave Robertson, (817) 428-0788. Finally, manufacturers also offer F&I training. For information on programs that are available to you, contact your regional representative.

  
  

  
  

  AIADA’s response to the Dateline report is now available online at www.aiada.org/publications/articles/120803.cfm.

  
  

  For more information, contact Marianne McInerney or Ed Patru at AIADA, (703) 519-7800.