As you read this, I will be on my way to the Montreal Grand Prix, an event run by one of the greatest car salesmen of all time. I am referring, of course, to Bernie Ecclestone, Formula One boss, billionaire and deal-maker supreme.
Long before he became famous as the CEO of Formula One, Ecclestone was a car and motorcycle dealer back in England, where he was known for his Midas touch. He could walk into a dealership and instantly come up with a value for every vehicle on the lot, then talk the owner into a price that would guarantee a profit for Ecclestone (and some serious post-sale regret on the seller’s part.)
Like I said – one of the greatest car salesman of all time. Then there’s me – the worst horse-trader ever born. Unlike Bernie, I do not make money on cars. Looking back, I realize that my car dealing has been based on a deeply flawed principle: buy high, sell low.
It started with my first car, a Fiat 600 that I bought in Belgium back in the 1970s. I paid a few hundred dollars for it, and drove it for a couple of years. As I prepared to move back to Canada with my family, I realized that my beloved Fiat would have to go. I studied the car, and realized it was rife with problems – the sills were rusting, the electrical system had gone flakey, and the exhaust was tinged with ominous smoke that spoke of sloppy piston rings.
My little Fiat was like a terminally ill cancer patient. How could I ask anyone to pay for it? I took it to a scrap yard where I had purchased many of the parts that had kept it on the road. I asked the dealer what he’d give me for my sick little car. He told me I’d have to pay him to take the Fiat off my hands. After some haggling, he finally agreed to take it for free.
After reading two Ecclestone biographies (the second one was titled No Angel) I realized that Bernie would have done things differently. He would have billed the Fiat as a low-mileage car in great condition, displayed it to potential buyers in the evening to disguise the rust, rolled back the odometer (one of his favourite activities, according to biography #2) and turned a handsome profit.
Ecclestone has a major advantage over me when it comes to cars – he has no emotional attachment. Ecclestone treats all goods as depersonalized commodities, to be bought at the lowest possible price, and flipped for the highest figure that can be attained.
Unfortunately, my car deals are always freighted with emotion – usually guilt. Every time I sell a car, I worry that I’m charging too much for a car with faults that I know only too well. (Being a mechanic makes things worse – every squeak and grind plays on my nerves like the pulse of the murder victim in Edgar Allan Poe’s The Tell-Tale Heart.)
A couple of years ago, I sold our 1998 Honda Accord, a car that had served us long and well. It was almost completely rust-free, and it had never been in an accident. I looked at some online ads and saw cars like it listed for as much as $6,000. But our car needed a clutch, and the upholstery was pretty ratty after years of schlepping kids to hockey. How could I charge $6,000?
I decided to ask $4000, but my heart wasn’t in it. In the end I took $2,000, after pointing out to the seller that the brake master cylinder was weeping a little fluid, and that the water pump might be on its last legs. Like I said, I’m no Bernie Ecclestone.
My lousy salesmanship can be traced back to my dad, who believed in taking responsibility for just about everything. If my dad saw a piece of litter on the road, he picked it up. When we moved out of a house, he cleaned it perfectly, and touched up the paint for the next occupant. My dad taught me to pay more in taxes than I took out of the public system, so it wouldn’t collapse. And he taught me to care for cars so that they’d keep working – not just for myself, but for owners to come.
As I learned, few car sellers were like my dad. A friend of mine bought a used Pontiac, only to learn that the seller had masked a failing transmission by thickening the gear oil with sawdust. Another acquaintance fell through the floor of his used Volkswagen – the previous owner had covered the rusted-out belly pan with cardboard and strips of wood, then concealed it with carpeting and thick layers of undercoating.
My dad could never do that. He would have repaired the car properly before selling it, or scrapped it. And he cursed me with the same sense of business ethics. Which means that I lose money on every car. Bernie Ecclestone would dismiss me as a softie and an amateur.
I’ve always been amazed at people who can make money on cars. Reading Ecclestone’s history left me amazed at his uncanny ability to calculate the value of any vehicle, then come up with a price that would guarantee him a fat margin. He was also a master of sales psychology. When he went to a wholesale car auction that was packed with shark-like dealers, Ecclestone had a friend plant a rumour about himself – that he was a naive young man who had just inherited a fortune from his dead father, and that he would be “easy pickings.” Of course, Ecclestone was the day’s big winner.
His strategies could have been lifted straight from The Art of War (the classic tactical work by Chinese general Sun Tzu, who wrote that “all war is based on deception.”) In a slight variation, Ecclestone once explained his preferred car-trading technique: “I want to buy from someone who thinks he’s smart, and sell to someone who’s not that smart.”
That’s why Ecclestone’s one of the richest men in the world, and I’m not. On the upside, I’ve been married to the same woman for 28 years. Ecclestone’s divorce cost him more than $1-billion. Some deals are worth more than others. And there are things that have no price.
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