This is part four of the car purchase posts. If you need to catch up, here is part 1, part 2, part 3, and a side trip about that day and the funniest part of the car purchase.
My parents and all of my siblings have bought cars from Saturn of Riverdale. I don't know how many cars we have bought but it's probably close to 10 by now and it will likely be more.
This is obviously good for the Saturn dealership. That's a bunch of cars that they don't have to advertise to sell. Saturn was our first stop when we went looking for a car.
There are a couple of ways to look at this from Saturn's viewpoint. They could quit trying because they have some fairly loyal customers. Maybe we'll all just keep on coming. Some companies take this route. They work hard to get customers, to gain trust and loyalty, and then they move on to the next customer. Loyal customers are expected to keep on returning based solely on the loyalty and the fact the business did a good job for a while.
To me, it seems like there would be more pressure on Saturn to make sure my family has a great experience.
They can expend a bunch of energy trying to create a new customer. Might happen, might not. If they will be attentive to our needs though (which takes less effort but does take some effort), they are very likely to make a sale.
More than that though. If they mess up with one person and treat any of the 5 families poorly, they could lose a lifetime of sales to 5 families (all of which have kids that will need cars someday). Poor customer service could be extremely costly to them.
Word of mouth is the best advertising because the advertiser is a trusted friend or relative. We are more likely to believe them, whether they are showering praise or ranting about the poor treatment. When you get such an obvious and open connection as a family buying cars, it definitely pays to take care of them.
You'll remember that after I looked at the Saturn, I went looking for a Prius. I found a used red one at the Toyota dealer. It didn't fit into my financial plan so I ended up passing on it.
I told the salesguy that I was going to pass because of the price. He told me that the payments were probably more affordable than I thought. We've covered that already. I talk price. Salespeople talk payments. They get away with it because so many customers are only concerned with monthly payments. If people didn't trade cars in every 3 to 5 years, you could charge them $50,000 for a Prius if you told them they only had to pay $100 a month.
The other thing that the salesguy kept reminding me about was the great gas mileage. You would save so much in gas that the extra money for the car was worth it. Let's look at this a minute. I told him that I wasn't going to spend more than $14,000 for a car. I did ask to look at the Prius but after I saw it, I told him I wasn't going to pay that much. He told me several times about the gas mileage.
You know me, I had to see in numbers what kind of deal it would be for me. Let's say that I bought a $14,000 car that got 30mpg and that gas for the next little while averaged at $3.50 a gallon. The $9,000 I would save (not including interest on those wonderful low, low monthly payments and more money on insurance for the newer more expensive car) would allow me to drive for over 77,000 miles. That's just to the break even point. That's where I would have spent as much money as the purchase of the car. During those same years, I would still have to gas up the Prius so it's very likely that I would trade the car in before I actually hit a true break even point.
Now consider that I spent $18,000 less than the Prius. That means that I could drive this car for 154,000 miles before spending the same amount of money as the Prius. Add the cost of gas that you would put into the Prius for the same number of years and it's obvious that I will never get to the break even point.
Add to that the fact that I'm going to be paying very little interest and in 6 weeks, I drop the insurance on the car to minimum and save money that way. There are tax breaks for buying a hybrid but either he didn't know that or just didn't feel like mentioning. Even with the tax breaks, I won't spend anywhere near the amount of money that it would take to buy and maintain a Prius.
In a way, it's too bad because I really was looking at buying one but it's just not worth it. That's going to be the downfall of hybrids for a while. Charging more for a car to save money on gas means that in many cases, you might as well get what you want because it's sixes. Gas prices will have to go up much higher before it really begins to matter.