I THINK EVERYONE HAS THOUGHT TO HIMSELF (or herself), "If I were king (or queen) . . ." something that annoys them would be changed.
Here are some of the things that would change in the minutes following my coronation:
First, police would clear all the roads between myself and my destination every time I start the royal vehicle. Of course, I'd keep my 1990 Oldsmobile 88. I wouldn't want to be an ostentatious sovereign.
Second, I'd make tipping illegal. It's not that I'd want to hurt the earnings of the kingdom's service workers. I'd encourage business owners to raise prices on food, haircuts, valet parking and whatever so that they could pay their employees proper wages without requiring customers to contribute.
Third, I'd eliminate coupons and rebates on all products. Why make a customer spend 33 cents on a stamp to mail in a coupon to get $1 back after buying a small appliance? Why make grocery shoppers cut coupons and carry them around in those cute little wallets? Just lower the prices on the products. It's so much easier on the customer. And isn't that what it's all about?
Most important to readers of this magazine, I'd eliminate rebates on motor vehicles. Instead of offering $1,000, $2,000 or whatever cash-back, prices would just be that much lower from the start.
That's what rebates and other customer incentives do anyway. They lower the price of a car to one that is more competitive.
"When a dealer needs a program to sell a vehicle, that means the price of the car was too high anyway," says one dealer.
Besides, what does a dealer say to a customer who bought or leased a car before the program went into effect?
"That's why Saturn doesn't use rebates," the dealer says. "They don't want anyone to get screwed."
In addition, if rebates were eliminated it would be so much easier to do business. There would be no dealer credits to keep track of and fewer forms to fill out throughout the retail process.
The downside to this royal decree is that salespeople would have less ammo for closing a deal.
Instead, they'd rely on the value of the vehicle. Salespeople would be forced to sell the safety, convenience and performance features of their products.
They'd have to enlighten the customer to why the brand and nameplates in their showrooms are more valuable than those of the guys across the street.
Instead of focusing on price or payment, salespeople would have to explain why buying or leasing a vehicle at their dealerships would give them a better overall ownership experience than that at other outlets.
Hey, wait! Isn't that what the industry is leaning toward, anyway?
While I'm at it King Timothy would eliminate leasing, too.
Now, before you try to overtake the throne, I would tell my subjects that I understand that leasing moves iron. The king also would realize that leasing gives customers an opportunity to drive a vehicle they wouldn't otherwise be able to afford. Therefore, some advisors in my court would argue that leasing should stay.
But sometimes a king has to do what's best for his people. And despite its advantages to industry, this king thinks leasing has more disadvantages than advantages for customers.
I've heard more horror stories about customer-dealer-manufacturer disputes concerning wear and tear, over mileage, out-of-warranty repairs, residual values, early termination and the like than I ever care to hear.
This king would believe that leasing gives customers all the hassle of actual vehicle ownership with none of the benefits. Think about it. If you rent a residence, you only need to buy insurance for the personal property inside. A lease customer has to insure someone else's property.
Lease customers have to pay for oil changes, tires and other routine maintenance in addition to monthly payments and have nothing to show for it at the end of the term. Not only that, many customers have to make a down payment and end up paying even more when they turn in the vehicle. At least if you own a vehicle when you're done paying for it, a customer can drive for a while without making payments and actually get a little something for it as a trade-in.
Many people in this country are in a hell of a financial mess from credit card debts. The same American desire for material goods while paying monthly minimums leads to the popularity of leasing. And the result is the same.
The king would proclaim that the country's new philosophy would be based on the principles of KISS - "Keep It Simple, Stupid."
Vehicle pricing would be honest and value-based from the start and people only would be able to buy vehicles they could actually afford.
I'll bet you're glad America is a democracy and that the only thing regal about me is that I'm a royal pain.
Tim Keenan is senior editor of Ward's Dealer Business. He can be reached at [email protected]
