A process of education

Car buyers in Elko County often travel to Reno, Salt Lake City or Twin Falls, Idaho to make vehicle purchases with the notion that they'll save money by buying in a larger market.

But Elko car dealers say vehicles aren't cheaper just because a city is larger, and Elko auto dealers also offer just as many choices in popular models as their larger franchise brothers.

The educational effort is important to Elko County dealers as automotive sales in January fell 24 percent from year-earlier levels, according to the Nevada Department of Taxation. That translates into nearly $2 million in lost sales compared with January 2009.

Albert Urrizaga, sales manager at Dale White Motors, says educating customers is the best way to keep sales in Elko County. Oftentimes, Urrizaga says, dealerships in Idaho don't quote Nevada sales tax in their prices, which gives the appearance of lower cost and lower monthly payments.

"When you go out of state you don't have to pay sales tax, but when they go to get their vehicles registered they have to come up that sales tax," Urizzaga says.

And Elko consumers can actually save hundreds of dollars by buying in Elko due to its 6.85 percent sales tax rate compared to Washoe County's sales tax rate of 7.75 percent.

"They think the grass is always greener," Urrizaga says.

Oftentimes, he adds, popular truck models may appear cheaper because they don't include tow packages and other extras that are critical for most drivers in the Elko area.

"It is just a perception, and if you can educate the customers then they can understand that," Urizzaga says.

Jose Rodriguez, sales manager for Gallagher Ford Lincoln Mercury, says Elko County dealerships also must focus on customer retention because available buyers are so much fewer than in larger metropolitan areas.

"In our market, we depend on people coming back," Rodriguez says. "If we give them a fair shake the first time around, chances are they will be around for second one.

"We only have a limited amount of resources coming in, and we want those people to come back," he adds. "In a larger market, there are enough people going around that it doesn't matter if they come back or not, but for us it matters a lot and our customer retention is high."

Rodriguez says the low-pressured, easygoing sales approach employed by hometown dealers also helps keep customers in the area and even draws buyers from outside Elko County. Rodriguez and Urrizaga say they regularly sell vehicles to customers from Reno who appreciate the dealerships' straightforward approach to vehicle sales.

"We can compete with any of the bigger areas, and we have got a pretty good-sized customer base out of Reno," Rodriguez says. "I think that says something when we draw people from Reno. We have people coming from St. George, Utah as well."

One reason why Elko consumers may head to larger markets is because of a higher number of choices, but Dale White Motors stocks as many Toyota Tundra trucks as larger franchise dealers, Urizzaga says. The lot on Lamoille Highway doesn't carry as many passenger cars as big city dealers, but that's because those types of vehicles aren't widely purchased in Elko County.

"That is not our market," Urizzaga says. "It depends on the type of car. If you are talking about a Toyota Prius, we've got two. But if you go to San Diego, they've got 50.

"There might be better selection in some areas on certain items, but for vehicles that make up the majority of our market, we typically have a larger selection than a lot of larger dealers."

Urizzaga says sales volume in at Dale White Motors was down about 10 to 15 percent in 2009, but sales have steadily been rising throughout the early part of 2010. If sales figures hold out through the last three quarters of the year, Dale White Motors expects sales numbers to be similar to 2008, which was only slightly off from the dealership's record year in 2007.

Rodriguez says 2009 was down over 2008 in total volume, but the year still was profitable. For the first quarter of 2010 Gallagher Ford Lincoln Mercury is up 12 percent over the same period in 2009.

Passenger trucks remain the most popular vehicles sold in Elko County.

"Despite high prices for diesel and gas, people tend to need bigger vehicles around here," Rodriguez says. "They need big trucks to haul cattle and stuff like that."