AS-IS Isn't

[Gerry Laughlin]

We have decided to start doing a bit more on the low end of the spectrum as far as used vehicles go. For those that have been down this road we could use a bit of advice. Are you doing a safety inspection on your used AS-IS vehicles? If not, how are you protecting yourself? It almost seems as though the minute we do an inspection we are opening ourselves up to further liability. Does anybody have a sheet or procedure that actually gets the point accross as to AS-IS being as is?
Thanks,
Gerry

[This message has been edited by Gerry Laughlin (edited 03-17-2008).]

[btk]

If you are going into this and it is new to the store, you should look at the whole picture. From the service point of view , we still do an inspection and sales will decline anything that is needed.Customer then has a problem a week after purchase and shows up at your service drive at 700am and lights up your service advisor as he trys to explain that the car is AS-IS. Then your good paying service customers get to wait and listen to this customer yell about the dealership and maybe question his decision to do business with your dealership. Even when you pack these cars on the front end it still many times doesnt cover cost to repair. I find that on the back end of the business, it is a no win situation, you will not retain a customer and any money invested toward goodwill will be a waste in the long run.

I would say that since you will do it anyway, make sure someone drives these cars for quite a few miles before the safety inspection. It seems like these cars go out for 100 miles or so and then the warning lights start turning on.

We also have a good process that customers sign on delivery stating AS-IS.

[Gerry Laughlin]

BTK,
I have had this exact talk with my boss, about how invariably it is someone that has bought 5 new cars from us that chooses the worst $2995 car for his daughter in college then complains when it really is AS-IS.
Gerry

[texaslp]

You could spell out "As-Is" with a sky writing plane and some people still won't understand.

I kind of agree that once you do an inspection you're opening up liability depending on the issue. Perhaps not legal liability, but certainly customer dissatisfaction. If it's a safety concern like brakes or something-legal liability big time.

Might be better to NOT inspect and have a document the customer signs that acknowledges, this vehicle has not been inspected, and offers them the right to have their mechanic inspect it or waive that right.

btk-why are these customers yelling in the service drive? They should be sitting in the uc mgr's office.

[btk]

They are yelling in the service drive because it is 700am and the used car manager is still sleeping dreaming about that 5000 gross he made on the spi fi customer who bought a 2001 tahoe with 200,000 miles on it.

My 2 cents would say you must inspect them, at least to verify no frame damage, I would see more liability if no inspection was done.

[gmcgrew]

If you inspect the car I believe safety issues need to be repaired or disclosed at time of delivery. One way is to inspect the car and give the customer the inspection sheet with the noted issues found at the time of the inspection. Have the customer sign the inspection sheet and retain it in the file and give them a copy. The real problem is going to be the customer that purchases the vehicle planning on having you repair any issues that come up no matter what they pay for the car. I also believe an inspection for safety must be done to prevent liablity.

[texaslp]

Might be a good idea to check with your attorney or your states dealer association about legal liability issues.

btk-how about "Mr. Jones, once my mechanic looks at your vehicle, I'll have mr used car mgr call you and go over the details of your warranty coverage?"

[btk]

We actually do advise the customer that we will contact him once sales arrives- I was just adding drama to a bad situation

[Old Irish]

We usually keep a few $2995 as-is specials in inventory. They are NOT total clunkers, though. You (um....your sales department) has to be a little selective here.

We've been down the path of selling junk....not good for your reputation, especially in a small town. Even then we made sure they had decent brakes, the ball joints were good, wipers and exterior lights worked....but not much more than that. Many came back to haunt us. Some of the situations got a little ugly.

People have a different expectation when buying from a big franchised dealer as opposed to Joe's Used Cars down by the waterfront.

Be careful !

Cheers
DD

[occupant]

I can see where low end cars could fit into the picture, it opens up all sorts of marketing opportunities (slasher events, $5/$50/$500 cars, etc), but the liabilites scare me. They would be cash only, you won't want to (and with most lenders wouldn't be able to) finance them, warranties are out of the question, and the people buying them are likely to think, big dealer, cheap car, lawsuit if it isn't perfect in every way. If your mechanics and inspectors are bored enough to give a $2000 car a full checkup and not kill your profits in recon costs, go for it. There are millions of good cars out there that are only worth a few hundred to a few thousand bucks, but they likely aren't the ones being traded in to your store on their last legs. Should you want to buy cheap cars seperately and resell them on your lot, buying from private owners and other dealers, you might have a better chance of getting good eggs.