Ed,
Great question. After talking with hundreds of dealers this year alone I saw firsthand many dealers who were in fact spending too much.
Many were ruining their organic results with too much branded spend, while others were left with batch & blast plain-vanilla ads inside unorganized campaigns with no attention given to negative keywords.
The end result, insanely high CPCs and unfortunately low conversions. And I mean true conversions with regards to measurable actions such as lead form submissions or phones calls - not a page destination.
The game has changed, yet dealers are left with using outdated methods which prevent them from providing highly relevant, contextual campaigns.
Dealers need to get back to following the DISC rule - does it sell cars? Many just don't know the answer to that question.