Welcome back to “Ask Car Buying!” Where you send us your questions on how to navigate this tricky market and we do our best to help. This week we are discussing why dealers are putting ads on the airways for cars they can’t sell you,
“ Curious to get your take on this. I have been seeing and hearing a lot of commercials on TV and radio for summer sales, financing deals, etc. For example, Toyota is running ads for financing deals on new rav4 hybrids, just come on down!
I am in the market for a car and I know for a fact that there are no available Rav4 hybrids on dealer lots anywhere in my area, and no incoming inventory that has not already been sold.
Why even bother running the ads?
If you have people knocking down your door to get cars, why bother doing any of this?
I’ve been puzzled by this one a lot especially as many of the dealers in my area have a handful of cars on their lot. Yet, I still hear their ads on the radio. It seems like a waste of money from a business perspective to keep paying for these slots. However, there are a few explanations for this.
The first of which has to do with how local businesses secure and pay for advertising. There are typically a few media companies in an area that control the advertising on various radio and television stations, so if you want to get the word out about your company you have to use one of these agencies. Often these agencies will sell ad-bundles of various time slots on a time-period basis which could be several months or up to several years. If a company locks into an ad campaign for several years, they get better rates for their ad slots. Since car dealers are a staple of local advertising they will usually enter into these long-term deals at better rates, furthermore, if they were to dial back their ads in times like this they may risk other businesses taking their slots. So in some respects, while the dealers don’t really need to run ads now they are playing the long game for when the market shifts, and their air time will be more critical.
Of course, that doesn’t really explain why a dealer would advertise a finance offer for a car they don’t have, but dealers have agreements with the automakers to mention those “specials” in their local ads. So if Toyota is running a national campaign for low APR financing for RAV4s, the local store is going to work that into their commercial, regardless of whether they have a RAV4 to sell you.
The final reason is that the dealers want to sell you something even if it’s not what you want. They know that the RAV4 is the most requested car so by focusing the ad on that model they are more likely to get buyers in the door. Remember, a lot of car buyers aren’t as internet savvy as the readers on this site and may not double-check the inventory online. Some folks are still buying cars the “old school” way and go to the showroom because they heard about some sale on the radio or TV. Of course when these folks show up only to find no RAV4s available the salesperson will do their best to convince the customer to buy what is actually available.
Tom McParland is a contributing writer for Jalopnik and runs AutomatchConsulting.com. He takes the hassle out of buying or leasing a car. Got a car buying question? Send it to Tom@AutomatchConsulting.com