Page 33 - GIADA SepOct2020

Car Dealership Test Drives
that the assignee stood in the dealership’s
shoes for all purposes, including being
liable for the dealership’s failure to give Go from First to Last
the buyer the title to the vehicle.
Demo drives once were an early part in
In light of its holdings, the appellate court
did not reach the assignee’s argument that the step-selling process. Not anymore.
it was exempt from liability under MMPA
Section 407.020.2. The assignee had By Steven Finlay, Senior Editor, WardsAuto
contended that, as a credit union subject
to chartering, licensing, or regulation The test drive once was an initial part of anchor position. That’s an important
by the director of the division of credit the conventional step-selling process at spot; in races, the anchor athlete usually
unions, it was exempt from MMPA car dealerships. is the fastest and most experienced.
liability resulting from the conduct of its
assignor. See Heinz v. Driven Auto Sales, Now, demo drives are among the final No matter at which part of the sales
LLC, 2020 Mo. App. LEXIS 782 (Mo. App. steps, says John Possumato, a 30-year process they occur, test drives have
June 16, 2020). veteran of the auto business. The switch- always been considered critical.
up largely came about because of digital
This Month’s CARLAWYER © retailing in the COVID-19 age. Online For dealers, the demo drive expedites
Compliance Tip car selling has been around in a limited selling. For customers, it’s a chance to
way for years but took off when the meet – and prospectively buy – a vehicle
Dealers should take careful note of pandemic took hold. of interest.
the Department of Justice item above.
Although the use by federal and state Modern consumers use the Internet to do “It has become the last piece of the
enforcement authorities of so-called much of the car deal. Then, as one of the puzzle,” Possumato says of the demo
“mystery shoppers” isn’t all that common, last parts of the so-called “contactless” drive. “It is the affirmation piece.”
the DOJ action is proof that it happens. sales process, many dealerships, on
Investigative reporters have also been request, will take test-drive vehicles Not everyone wants one. In a DME
known to employ this technique. The to customers’ homes rather than the Automotive survey of 2,000 consumers,
only way to avoid the risk of a mystery customers visiting the dealership for the 320 said they skipped the demo drive for
shopper’s “gotcha” is to assume that every try-out spin. whatever reason.
customer is a mystery shopper. Do all
your customer contact personnel know Accordingly, “the test drive has Although auto digital retailing
what they need to know about the laws become one of the last parts of the unwittingly gained traction when COVID
and regulations that apply to the sale, (car-buying) experience,” Possumato, hit (temporarily closing dealership
financing and leasing of vehicles to CEO of Driveitaway, a dealer-focused showrooms in many states), consumers
consumers? shared-mobility and subscription- seem to like the online approach to car-
services company, says at Informa Tech buying, Possumato says.
No? It might be time for a bit of schooling. n Automotive Group’s Summer Festival of
Automotive. (John Possumato, left) How has it affected the customer
Eric (ejohnson@hudco.com) is a Partner in experience? “Many people feel better
the law firm of Hudson Cook, LLP, Editor Possumato speaks of the traditional because the customer is more in control,”
in Chief of CounselorLibrary.com’s Spot dealership selling process that starts at Possumato says, adding, that “the market
Delivery®, a monthly legal newsletter for the store with a meet-and-greet, then is telling us these trends are happening.”
auto dealers and a contributing author to segues into an attempt to “land the
the F&I Legal Desk Book. Tom (thudson@ customer on a car.” That’s largely done He recalls early on talking to some dealers
hudco.com) is Of Counsel to the firm, has during the demo drive. who feared a big shift from in-person to
written several books and is a frequent online retailing would hurt profits.
writer for Spot Delivery®. He is the Senior Then come later steps in the process,
Editor of CARLAW® and Spot Delivery®. For including price negotiations, financing, “That’s not happening,” he says.
information, visit www.counselorlibrary. the presentation of F&I products and “Transactions happen online more
com. ©CounselorLibrary.com 2020, all assorted paperwork. quickly and with profit margins
rights reserved. Single publication rights only, sustained.” Whether some skeptics like
to the Association. HC/4847-4444-0519.1 The step-selling system hasn’t completely it or not, “online car buying is not going
reversed itself, but the test drive has away.” n
moved down to something of a relay

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