A code to sell by
You’re probably confident that your dealership interacts ethically with the customers that come its way. Moral standards begin with the “tone at the top,” and you lead your employees down an ethical road.
But should you count on that alone? A formal code of ethics that encompasses industry standards can help you communicate — and emphasize — your values. Also, related policies and procedures provide employees clear-cut directions.
Where can you find a model?
If you’re a member of NADA, you’re likely familiar with its code of ethics. The association requires its members to fully comply with all federal, state and local laws governing their businesses and to pledge to:
- Operate the dealership in accordance with the highest standards of ethical conduct,
- Treat each customer in a fair, open and honest manner and fully comply with all laws that prohibit discrimination, and
- Represent products clearly and factually, stand fully behind warranties, direct and implied, and in all other ways justify the customer’s respect and confidence.
Other parts of the code set ideals for advertising, repair work and written service estimates, resolving customer concerns, and other matters.
What about state codes?
As with NADA’s code of ethics, state codes are typically broad and all-encompassing. For instance, the Georgia Independent Automobile Dealers Association states that members won’t “perform any act which could bring disrepute to the independent automobile industry.”
So, you may ask, how exactly do these ethical ideals translate to dealer interactions with the single woman who wants to buy a reliable used car for $5,000, the father of a large family who wants to finance his new SUV for five years, or the grandmother who wants to get rid of that “clanging noise” she hears under her sedan’s hood?
Additional guiding principles
Fortunately, there is more detailed advice. In addition to its code of ethics, NADA publishes an “Ethics Guide,” which covers four areas of a dealership’s operation: advertising, financial services, sales and service.
First, the guidelines stress that dealers should abide by local, state and federal laws relating to auto dealerships, including the Truth in Lending Act. And there are specific guidelines for ethical behavior in various operational areas. For example:
Financial. Sales personnel should “provide each customer with a thorough and clear explanation of the steps involved in the purchase or lease of a vehicle and follow those steps diligently.”
Financial services guidelines dictate that employees fully disclose to customers “the costs, terms and contractual obligation of credit and lease transactions,” and that documents be written in “a simple, plain and unambiguous manner.”
Service. These guidelines require that dealerships, when appropriate, recommend corrective and maintenance services, “explaining to the customer which of these are required to correct existing problems and which are for preventive maintenance.”
As you review the day-to-day activities of your employees under an ethics microscope, you’ll likely see areas where procedures should be put in place to support guidelines such as the ones described above. State and federal laws will prompt some of the procedures. But you may find a need to set additional rules.
What if, for example, you have concerns about how service personnel describe repair estimates to customers? You could establish a procedure whereby customers sign a store copy of their repair estimate.
A living document
To help ensure that your code of ethics remains effective, you need to keep an eye on it. Review and revise the code once a year. At the same time, evaluate how your related policies and procedures are working.