Driving a Hard Bargain

The Washington Post's Warren Brown has an intriguing history lesson on the customer-relations problems of the American car industry. Haggling was part of American automobile buying from the outset, but according to Brown, the high-pressure tactics of the modern American dealer originated in a single Memphis franchise after World War Two, when new vehicles were scarce and buyers could be browbean into signing a deal that assured fat commissions for salesmen and profit margins for their employers. It started with "unhorsing" (getting the keys of the prospect's own car), proceeded through "detention" (stalling, allegedly for trade-in value inspection), and if successful for the dealer, ended with "release" (a signed contract). This bit of improv had a long run. Even after postwar shortages disappeared, what was called the System or the Drill had spread to dealerships around the country. Customs often outlive the reasons for their birth. (West) German apartment leases long reflected housing shortages that followed the two world wars, resulting, for example, in the need to install and ultimately remove full kitchens including cabinets, which in turn inhibited moving, which in turn . . . .

There's another part of the story I hope Mr. Brown or another writer will tell. Consumers did not remain passive victims of tactics. Many of them relished the challenge of beating salesmen at their own game -- an ambition the dealers did not discourage. (Casinos are said to make much more money from unsuccessful card counters at blackjack tables than they lose to the rare proficient ones.) The fixed-price system of GM's Saturn division showed the possibility of an alternative dealer-customer relationship based on service rather than on price competition among its dealers, yet GM's corporate culture sabotaged the company's own innovations, unfortunately not for the last time.