The dealership group, owned by brothers Fred and Rhett Ricart, typically gets new-vehicle exchanges once or twice a month and used-vehicle exchanges around six times per month. Reasons vary widely. For instance, some people buy a car for a spouse only to find out the recipient doesn't like the color. Others discover the vehicle doesn't fit in their garage.
"Or they say, 'I can't quite explain why, but I just don't like the car,'?" Rick Ricart said. "All of these examples are real scenarios."
Management had considered giving consumers more than 72 hours to exchange vehicles.
"But we found that to do a true exchange, it's much easier and more cost-beneficial if we haven't" received funds from the lender yet, Ricart said. "The truth is that cash flow is a high priority."
And the vast majority of customers don't need even 72 hours to figure out they don't like a vehicle.
One downside to the policy: If a new-vehicle purchase is funded quickly with the title already issued when the exchange occurs, the vehicle being exchanged technically is considered to be used and is subject to minor depreciation. But Ricart said he considers that to be a cost of doing business, as with marketing expenditures.
"It's the price you pay for offering customers that peace of mind and confidence," he said.
Sometimes customers seek an exchange because they aren't familiar with its technology and, as such, are convinced something isn't working properly. So it gives employees the opportunity to go over the features of the car again and perhaps save a deal.
Ricart said it's difficult to track exactly how much the exchange policy affects car sales for the group, which sells Ford, Genesis, Hyundai, Kia, Mazda, Mitsubishi and Nissan vehicles at the 67-acre auto mall. The stores collectively sell an average of about 500 new and 800 used vehicles per month.
But he pointed out that used-car sales rose dramatically in 2013, when Ricart Automotive made a concerted effort to market its three primary customer benefits: the ex- change policy, a comprehensive repair-warranty program and a best-value guarantee. (Customers who buy a car and then find a lower advertised price within five days for the exact same vehicle they purchased receive the difference in cash.)