information asymmetry @ the car dealership

used car dealers and dealers repair shops probably do not rank on the top of your ‘trusted vendors’ list but today i had an experience that radically redefined my views on how even this category of service providers can win, retain and build trust with their customer base.  a case of classical asymmetric information creates an agency problem where the interests of the firm and its customers are totally misaligned …

earlier today my 7 year old German car went into the repair shop for the nth time in the last 12 months and this time i had a low 4-figure bill.  just as i reconciled myself post the 7-stages of repair-grief, a trusted consultant at the dealership walked up, said hello, took a quick look at the bill and shook his head.  a few minutes later, without a word said he returned with a new bill for a low 3-figure sum – a whopping 30% taken off the bill.  a quick word of sincere apology and he walked me to my car … wow.  the interesting part is that i could never had figured out the extra $$$ given the multi-page bom and invoice that only another auto technician could decipher let alone read.

if only all car dealers and auto repair shops all resolved the agency problem in this way, firms can only gain from greater trust built with their clients.  thank you mr. d for setting a new definition for car-dealer service, you deserve a shout out.