Ethical Concerns for Used Car Dealers

There’s no doubt about it: the used-car salesmen of the world have developed a pretty bad reputation.  They might be even lower on the totem pole than lawyers (who are at least getting paid to protect you, even if they charge an arm and a leg for it).  But the stereotype of disreputable conduct and hucksterism that has become associated with those who peddle used automobiles didn’t come from nowhere; otherwise there wouldn’t be lemon laws in countries across the globe.  However, this doesn’t mean that every used-car dealership should suffer from this stigma.  If you happen to run such a business and you want to separate yourself from the pack, there are a few ethical concerns that you may need to address to your customers in order to prove that you’re strictly on the up-and-up.  Here are just a few things to consider when it comes to making your customers feel comfortable and keeping them satisfied.

1.  Mileage.  It is illegal to change the mileage on a car (roll back the odometer), and yet, this is what concerns most buyers when they approach a used-car dealership.  It doesn’t happen often, but it does happen.  You can easily put your customers at ease by providing governmental records to show that the mileage of the vehicle is accurate, and thus waylay this common consumer fear.

2.  Accidents/damage.  Have you heard of Carfax?  You don’t have to be a dealer these days to uncover a vehicle’s history.  All you need is a VIN and 35 bucks.  This means that everyone has access to information concerning prior accidents or other damage to a vehicle.  Remember that most countries have federal lemon laws, and states or territories may get even stricter with their regulations concerning used cars.  So don’t bother trying to cover up a car’s history as a way to sell it.  You’ll only be hurting yourself and your business in the long run.

3.  Warranty.  Although most used cars do not come with any type of warranty (unless they are certified pre-owned vehicles purchased from a dealership), you should be aware, as a used-car retailer, that most countries have laws in place to protect those who buy used vehicles.  Lemon laws have a statute of limitations that virtually acts as a warranty for used cars.  You may want to take this into consideration before letting a car with known conditions drive off your lot.  In most cases, the consumer will be entitled to money back for certain malfunctions, especially those that could be considered life-threatening, or time that the car is out of commission.  So it behooves you to inspect cars fully and disclose any pertinent information on the subject before sale (for your own protection and that of your customers).

4.  Misleading information.  Do used-car salesmen lie?  Some of them probably do.  What about exaggeration?  This is much more common.  But if you want to run a reputable shop, you should advise the sales staff in your employ to be as honest as possible.  This will not only protect you from lawsuits, it will also raise your reputation within the community and probably keep you off the most-wanted list at the Better Business Bureau, the Offices of Trading Standards, or whatever consumer-protection organization operates in your country.

5.  Mark-up.  As a business dealing in used goods, you are generally within your rights to set prices as you see fit.  However, keep in mind that consumers are not stupid, at least not twice.  So while you might reel in a few naïfs initially, overpricing will likely put you out of business before too long.

Shirley Simpson writes for Kanetix, where you can shop around for insurance quotes and find a great deal.