By on October 4, 2013

"tesla

One week after we mused that electric carmaker Tesla would never be able to defeat current state laws prohibiting factory direct automobile sales and thus must join the franchised dealer model, the company proved us wrong thanks to the Commonwealth of Virginia.


According to Automotive News, the Virginia Department of Motor Vehicles and, amazingly, the Virginia Automobile Dealer Association have come to an agreement to allow Tesla to open one dealership in the state. Tesla currently operates a order-taking outlet in a mall in Tysons Corner, a suburb of Washington, D.C., while their nearest service center is in Rockville, Maryland. Although details of the agreement are sealed, it is likely that Tesla will be allowed to build a full service store in the Tysons Corner area.

Tesla has been wrangling with the state for some time. Their request to open a dealership had previously been denied by the state’s DMV and the company was appealing the ruling in a county court. The next step is for the Virginia Motor Dealer Vehicle board to grant Tesla a business license.

Tesla had previously won approval to sell its vehicles in the state of New Hampshire but having a point near the nation’s capital is huge for the company’s exposure. Besides having near-perfect client demographics for the product, it affords CEO Elon Musk the opportunity to showcase his dealership to members of Congress, whom he is considering lobbying to pass a federal law allowing factory direct car sales to customers.

As this agreement has been in the works for some time, we cannot say if our editorial had any influence on the Virginia entities, but we cannot help but wonder if TTAC commenter and dealer apologist Ruggles, who posted a remarkable one hundred and seventy-four comments on our story last week, might have been in Richmond this week, wearing the lawmakers down until they caved.

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310 Comments on “Virginia Allows Tesla To Establish Traditional Dealership...”


  • avatar
    DC Bruce

    Well, we should give “Ruggles” props for candor. At one point he admitted the bald truth: it’s all about reducing competition. Maybe that piece got to Richmond.

    • 0 avatar
      imag

      It’s true. Car dealer competition is silly – and it doesn’t help the customer. The vehicle manufacturers are already competing against each other.

      • 0 avatar
        Pch101

        “Car dealer competition is silly – and it doesn’t help the customer”

        It does help the customer who knows how to haggle.

        The dealers compete against each other. If you have the choice of buying a ____ (insert car brand here) from several different stores, rather than just one, then you can play them off against each other. A smart shopper knows this and acts accordingly.

        A retail monopoly has the effect of raising prices, since the individual brand stores don’t need to compete against each other. They do need to compete against other brands, but they avoid price wars within the brand.

        The customer who doesn’t know how to haggle fares poorly with the current system. The answer to this is to show people how to negotiate and to provide better, simpler disclosures to consumers, not to have company-owned stores that have no incentive to haggle.

        • 0 avatar
          mcs

          >> A retail monopoly has the effect of raising prices.

          Not necessarily. If there was a retail monopoly, the other brands would keep the prices in check and there wouldn’t be the extra expense of supporting a middleman. We have at least one dealer in the Boston area that is a billionaire, so there is a lot of money getting siphoned off.

          • 0 avatar
            Pch101

            The linkage between vertical integration and higher prices is well established in economic theory. It’s also established in the courts — the 1948 US Supreme Court case of US v. Paramount Pictures forced film production companies to divest themselves of movie theaters, as they were stiffling competition and increasing prices.

            With company-owned stores, you have only form of competition, namely at the brand level. With independent retailers, there are two levels of competition — the brand and the retailers are both competing against each other.

            One reason that Tesla wants company owned stores is to prevent price competition between franchises, because it is illegal for the producer to dictate retail prices. (There are some workarounds to this restriction, but they are incomplete.) As Tesla is guaranteeing residuals, it is particularly motivated to maintain price points that are as high as possible.

          • 0 avatar
            Vulpine

            @PCH101: While your example may be valid, the argument comes in when you compare Tesla to these other brands at the moment. You claim that Tesla is “particularly motivated to maintain price points that are as high as possible,” yet you ignore the rule of Supply and Demand, where currently supply is relatively low and demand is relatively high. In other words, he is priced at what the market will bear. If he were considered over-priced by the buyers, he simply wouldn’t be selling any of them, would he?

            On the other hand, when you consider the safety of the Tesla; a 5-star rating from the NHTSA and the point for all the hot fire that Model S in Oregon had and yet the interior was untouched by that fire, the price of the car may well represent the real quality of the car when compared to all others. Maybe, just maybe, he is not selling that car at “price points that are as high as possible”. Hmmm?

          • 0 avatar
            Pch101

            Company-owned stores eliminate one level of price competition.

            In effect, they serve to restrict supply. The lack of retail options creates supply constraints that serve to increase prices. I didn’t ignore supply and demand, I used it to support my point.

        • 0 avatar
          Les

          All I can say is.. [EXPLETIVE DELETE] The dealerships.

          Events which I will not get into showed that my current car wasn’t meeting my needs, so I went shopping.

          I found a car with a set of features I liked and went out into the wide world, the the absolute top I had in mind I could comfortably pay was $5000 plus trade-in.

          First dealer, for the car I wanted with the features I wanted they’d let me have it for $7500. I told them my top dollar was $5000 and they said they couldn’t go a dollar below $6000.

          I left, grumbled, soul-searched, ran the numbers in my finances, tightened belts, and came back and said I could go $6000. They then told me that due to depreciation on my trade their new offer was going to be $8500 and they were going to have to stand firm on it this time.. but Good News, my trade-in was worth as much right this second as it would ever be.. i.e. if I left them hanging no they’d just ramp-the price up Again… it had depreciated for a WEEK!

          Second Dealership, small-town affair.. Really wasn’t made at all comfortable by the guy who talked to me, not that he was creepy or anything just.. he didn’t seem to know anything at all what he was doing. I was nervous as hell having been burned so badly last time, but instead of putting me at ease and try to coax me into a sale I had to do the coaxing with Him to get him to even talk terms. At one point I mentioned the differences in the engines.. the two-point-four liter for example. He corrected my and assured me this model had no two-point-four liter engine, it had a Four-Cylinder engine.

          Got to talking with the manager, He seemed to know what he was talking about and hadn’t been hired because he was once a quarterback for the dealership owner’s old high-school team, got me squared away and we came to somewhat agreeable terms. I told him no way no how could I go over $6000, he agreed and said they could order me a car for that price. Woo-hoo. Was all set, then while he was configuring things I had a brainwave.. oh, did he remember to include this one feature I told the other guy who spent half the dealership process texting his girlfriend that it was a feature I Needs Must Have? Oh, no he didn’t.. but that’s no problem, it’ll just cost $1500 more, that’s not an issue is it?

          Third Dealership! After conversing online with someone I felt to be reasonably knowledgeable I was assured they could get me the car I wanted for $7000, after I told them this was unacceptable they assured me that was the ‘sight-unseen’ price and if I would please bring my trade in for them to look at it they might be able to do me a much better deal.

          I got up and hustled on down, the nice lad I’d been sharing e-mails with was conveniently out-of-town and the people there laid it out that under no uncertain terms they absolutely could no go south of $7400.. and they never so much as bothered with glancing at my trade which was parked right out in front of the building.

          Finally, despondent, I turned to Autotrader.com to wistfully peruse what might have been but obviously never would be.. and I stumbled across the car of my dreams, and at just the right price.

          It was a break-neck negotiation, they were under the gun to meet a quota, and under advice from a friend I lied up and down that I couldn’t even consider more than $4000… Finally I got my new car at $5000, which was what I was hoping to pay in the first place.. and after visiting a dealership over 200 Miles Away!

          [EXPLETIVE DELETE] The Dealerships!

          [EXPLETIVE DELETE] Haggling!

          Bring on the Online Store!

          • 0 avatar

            So what’s your beef? It sounds like you got what you want? Seems you started out thinking it was a dealers responsibility to fit the vehicle YOU wanted into YOUR budget.

            So you used the Internet and got your deal. If business deals stress you out I suggest you stay an employee and avoid the world of entrepreneurs.

          • 0 avatar
            Pch101

            “So what’s your beef?”

            You’ve been on the other side so long that you don’t know what it’s like to be in the other guy’s shoes.

            It’s difficult to negotiate a car deal without feeling as if the dealer isn’t trying to screw you. The command-and-control tactics are effective for closing deals, but they tend to leave a bad taste in peoples’ mouths. The buyers may do the deal, but it makes them feel dirty.

            Personally, I look it as a game and enjoy it. I’ve negotiated larger deals professionally, so in my view, a car purchase is a cakewalk. I’m also willing to recognize car sales as a win-lose type of transaction, so I play dirty and turn the gamesmanship to my advantage.

            But that isn’t everyone’s cup of tea. You may find my comments (aside from this one) more agreeable than those of other posters here, but I’m also the guy who the sales manager wants to strangle by the time that the paperwork is signed.

            As a buyer, understanding your business comes with a willingness to use passive-aggressive tactics to beat you guys at your game. If more people figured that out, then you’d have to change your approach, but you benefit from the lack of knowledge and unwillingness to use the appropriate tactics.

          • 0 avatar
            Les

            What’s my beef?

            What’s my BEEF??

            Oh, wait.. this is my fault isn’t it Ruggles?

            Yes, it’s my fault for not mentioning that the last desperate traul through Autotrader was FAR from my first use of the internet.

            My fault for not mentioning that the internet was THE FIRST PLACE I went finding pricing information for the car I wanted.

            My fault for not mentioning how much I flogged the build-and-price tools at Car-and-Driver, Edmunds.com, Cars.com and Truecar to come up with $5000 as a reasonable top-end price.. only for the dealers to go..

            “Oh, you can only go as high as $5000? Well we can only come down to $6000.. Oh, you found $6000? Well now our base price is $8500.. you can shake out that much of course, right? Right? We don’t give a crap how much this hurts your savings, we just consider all your bank account are belong to us and if you’d just sign it all over we’d much appreciate it.”

            [EXPLETIVE DELETE] YOU AND THE HORSE YOU RODE IN ON!!

          • 0 avatar
            Les

            Pch101

            You say ‘passive-aggressive’, I say Sleazy.

            I felt Sleazy lying to that nice lady about what my ‘top dollar’ would’ve been, and the entire process felt sleazy to me when I explained what my true ‘top dollar’ was and wasn’t met with..

            “Oh, well I’m afraid we can’t close a deal with you on those terms.”

            But instead was offered prices and a good cajoling to c’mooooon and meet them.. and when I did, the price JUMPED to another tier and C’mooooon, won’t I just jump up-up like a doggy looking for treats and meet them some more? They won’t up the price Again this time, Promise!

            This on my first-tier selection… when I had ample nicely suitable second-tier selections (which I found on the internet) which passed through my fingers while I was being strung-along by these tactics the Dealerships were putting me through.

          • 0 avatar
            Pch101

            “But instead was offered prices and a good cajoling to c’mooooon and meet them.. and when I did, the price JUMPED to another tier and C’mooooon, won’t I just jump up-up like a doggy looking for treats and meet them some more? They won’t up the price Again this time, Promise!”

            The system is what it is.

            You can either try to fight it and become frustrated, try to change it and fail, or else accept it for what it is and play to win. (Remember the Serenity Prayer, as it applies here.)

            The great thing about dealers is that they’re very predictable. You can use that predictability to your advantage, instead of wasting so much time and energy getting upset about it.

          • 0 avatar
            ajla

            @Les:

            If you have time: private party buying and selling. I can not recommend it enough. Even with the handful of no shows, it’s way better than the dealership experience IMO.

            If you are lucky enough to live near a CarMax or one price dealer that can be a big help too.

            Heck, maybe try to buy from CarMax or at a one price place (they aren’t perfect though). The small price premium might be worth the lack of hassle.

        • 0 avatar
          imag

          PCH – unfortunately I missed the debate. You may be long gone now, but on the off chance you are checking the thread, I have to say this:

          I sold cars. We *loved* people who came in and said they bargained for a living. Nine times out of ten, they would end up haggling over $50, while we would have a bunch of money reserved on the deal. They would leave convinced they had put the screws to us – when I still had a nice commission coming. Sometimes I wanted to ask them why, if they were regularly negotiating multi-billion dollar deals (as they often claimed), they would spend four hours chasing a couple hundred dollars.

          I am not saying you are in that category; you are informed enough about cars to know the prices that dealers pay. But I have always found that the simplest way to negotiate a car deal is this:

          Use the phone. A dealer has no leverage on the phone and you essentially become a fleet sale. It is very simple and very fast. If you don’t like the deal, you just hang up.

          But the point of my original post is that most people shouldn’t have to jump through all these hoops. We no longer live in a bargaining culture for most items, and so it is really just an exercise in bravado for people like you. And yeah, sales guys I worked with would try to bargain on anything, and it would take 10 minutes to get through a drive-through. But it is silly, and customers are tired of it.

          The essence of a dealership experience is that the customer should be pushed to their absolute limit – and that a dumb way to sell a product. Good manufacturers are encouraged to make the whole experience easy and pleasant.

          As far as pricing competition, we simply disagree. There is so much vehicular choice out there that manufacturers are competing against each other. While a good negotiator (or someone smart enough to pick up the phone) may get a better deal under the current system, the average selling price unlikely to go up under an outlet model. After all, the vast majority of the price that dealers pay is set by manufacturers to move cars. Those numbers will continue to be driven by sales and competition, and those are the numbers that really matter.

  • avatar
    Felix Hoenikker

    I wonder what kind of pictures Mr Musk had that convinced the Virginia lawmakers to be so accomodating?

    • 0 avatar

      Had NOTHING to do with VA lawmakers. It had to do with the VA DMV.

      • 0 avatar
        suspension guy

        You have shown good reasoning and excellent understanding of the subject. I read most of your posts here, but may have missed something. Can you explain why dealers are better for the consumer than buying direct?

        My experience is that I have been able to get great deals from dealers. What has baffled me is how they manage to waste so much of my time and eventually have me pissed off – after the deal is done (I always pay full price at closing)-lol!

        Thanks, John

  • avatar
    morbo

    As a New Jersey native used to public corruption that has lived in the Confederacy for a couple years now, and witnessing the pay to play jackholes running Virginia nowadays, I fear to know what price was actually paid. Someone somewhere made off good.

    But I do hope Tesla succeeds. The closer we get to ordering Fords and Hondas from the Amazon.com, the better.

  • avatar
    imag

    I wish all the other car companies would take this opportunity to jump on the bandwagon.

    Car sales and service would be much improved by factory outlets. Elon is right: the days of the wheeling, dealing car lot should be over.

    • 0 avatar
      Richard Chen

      Other carmakers have previously tried manufacturer owned stores on a small scale stateside, but not been successful. Despite all the dislike directed against them, auto dealers do have their own skin in the game and operational flexibility.

      Tesla doesn’t have much capacity at the moment (~20k cars/yr), so their current setup should work just fine for the near future. There isn’t much current demand for cheaper electric cars, perhaps Musk will have some scalability issues when the Model E (or whatever their half-price car) will cost.

      • 0 avatar

        Good input Richard. Build to order works well UNTIL the moment when supply exceeds demand. The diehards in this group think the great Elon will ever encounter that situation as he is much too smart for that. But that’s when the world will discover if he will discount to move the iron, something currently below him, or keep building and let inventory build. OR maybe he just shuts down the plant for a while. All automakers look like geniuses when they can’t keep up with demand.

        If news of a fire caused by running over scrap metal in the road causes a substantial dip in Tesla stock price, imagine what news of Teslas sitting in pastures with grass growing up between the fenders and hood. What happens if word gets that Tesla is losing big money on its guaranteed residuals? Neither of these things has happened yet. But Tesla’s history is really quite young. Yet, we have those who think Tesla threatens the current system of franchised dealers. I say, let Musk own his own stores as long as he owns all of them. The 16K current dealers aren’t threatened one bit.

        • 0 avatar
          Vulpine

          The whole point of Just In Time manufacturing is to eliminate excess inventory and reduce costs. It is possible that Tesla may eventually go the traditional route, but personally I don’t think he will until demand simply gets too high to keep up.

          • 0 avatar
            danio3834

            As volume grows, and Tesla does have rather ambitious volume targets, even Just In Time practices can’t save a manufacturer from excess inventory at times.

            The major manufacturers have a good grasp of Just In Time, but when you’re build forecast is 100k units for example, unforeseen market fluctuations can cause inventory to build FAST. Storing inventory costs money and the inventory depreciates. Excess supply drops transaction prices. The larger companies use incentives to move excess inventory, and sometimes dump them using various tactics like fleets, dealer loaner programs etc.

            While Tesla’s volume is small, they can manage all this well to keep margins high. As volume grows, it will become more and more difficult, especially with an ambitious niche product.

          • 0 avatar
            Vulpine

            @ danio3834:

            I’m not going to disagree with anything you said in this statement. As I pointed out before, it can be easy to make mistakes in projections. However, Tesla’s current build-to-order system means that they have very little excess inventory of finished cars and if they continue that policy even with increased demand, then they don’t have the same kinds of depreciation that a finished vehicle inventory does. A current clear example of this is the simple fact that you can still buy “brand new” DeLorean cars for about the original ‘price’ (updated to current dollar values). The long-stored pre-assembly parts have NOT depreciated in value, at which point new vehicles built from those parts are effectively considered “new” cars.
            If (and I will emphasize that word) Tesla intends to continue on its current build-to-order policy and simply try to project pre-production inventory as compared to post-production, they may get hit less by that depreciation and thus realize more gross profit. It’s also a way to control the Supply & Demand link to ensure there is always a demand, where those other OEMs only hope that demand continues at forecast rates.

  • avatar

    RE: “I wish all the other car companies would take this opportunity to jump on the bandwagon. Car sales and service would be much improved by factory outlets.”

    How would this be accomplished?

  • avatar

    RE: “One week after we mused that electric carmaker Tesla would never be able to defeat current state laws prohibiting factory direct automobile sales and thus must join the franchised dealer model, the company proved us wrong thanks to the Commonwealth of Virginia.”

    You make this sound like a MUCH bigger deal than it is. Tesla has been free to establish its showrooms in most states and has been from the beginning. This wasn’t a court finding against any current law. And it has no impact on the franchise dealer system as it exists. And I am sure it had nothing to do with a few posts I made last week.

    From the Virginian Pilot – “The agreement came late last week. It clears the way for the automaker to get a license from the Virginia Motor Vehicle Dealer Board to sell its electric cars at one location in Northern Virginia and operate an associated service center, according to James Chen, director of public policy and associate general council for Tesla.

    Chen said Tesla will file its plans with the dealer board as soon as possible, although he didn’t specify when. “We’re not going to let the grass grow beneath our feet,” he added.

    The Palo Alto, Calif.-based company, founded a decade ago, has run into roadblocks in numerous states, including Virginia, as it tries to roll out its dealership model. Tesla, unlike other car companies, insists on selling its cars directly, and that structure has run afoul of state laws set up to protect dealers and consumers.

    In April, Tesla’s request to operate a dealership was denied by the state Department of Motor Vehicles. Tesla appealed the ruling in Fairfax County Circuit Court, but the automaker continued talking with state officials and the Virginia Automobile Dealers Association in hopes of avoiding further litigation.

    While the DMV has since approved Tesla’s request and the company has withdrawn its appeal, Tesla must be granted a business license by the Virginia Motor Vehicle Dealer Board. The company must meet specifications set by the board for dealerships. It remains to be seen whether its current location in a shopping mall will meet the requirements.

    Also, Chen stressed, the agreement doesn’t clear the way for additional locations in Virginia.”

    • 0 avatar
      Richard Chen

      The current mall space is not big enough to display the 10 cars required by law, unless you’re stacking Roadsters. There’s available space close by, but it’s not going to be cheap.

    • 0 avatar
      Vulpine

      You say it’s not a big deal, ruggles, but you ignore one point: the fact that Tesla had to go to court in the first place. Based on your commentary above, they shouldn’t have even had the need, yet obviously they did or they would have opened a location without going through that particular hassle.

      All the rest of that discusses Tesla’s plans, UNTIL you quote, “In April, Tesla’s request to operate a dealership was denied by the state Department of Motor Vehicles.” At that point, the facts alone refute your initial statement of, “Tesla has been free to establish its showrooms … and has been from the beginning.”

  • avatar
    L'avventura

    Not sure if its just coincidence, but NADA (National Automotive Dealers Association), Tesla’s primary adversary on their dealership plans, is also HQ’d in Tysons Corner VA, a couple blocks from the mall where the Tesla dealership is located.

    Tysons Corner is also where Apple launched their first Apple Store, so it may be a location that is just ideal to experiment with new sales models, but given how emotional Musk’s comments have been about NADA’s efforts to block Tesla in the past, it seems more an ‘in your face’ move.

    • 0 avatar
      Pch101

      It’s one of the most affluent areas of the country, with a lot of high end retail, and it’s close to expressways, including the Beltway.

    • 0 avatar
      Richard Chen

      NADA and Tysons Corner are about a mile away as the crow flies. Thanks to traffic congestion, the fastest trip between the two will be Metro’s Silver Line, which begins service in a few months.

      The mall has the highest revenue per square foot in the DC area. JC Penney closed their store several years ago as they were not a good fit (read: downscale) and not doing well financially. Of all stores, a Wal-Mart recently opened 2 miles away and across the street from the Mercedes, Aston Martin, Porsche, and Audi dealers.

      • 0 avatar

        In talking to people at NADA, they do not feel at all threatened by Tesla’s bid to own ALL of its own outlets. The concern is over a “mixed system.” NADA wasn’t up in arms over the Saturn experiment, although the FTC was for concerns over a possible lack of competition when one dealer/owner owned all the outlets in a single market. That blew over.

        NADA didn’t get overly riled when Ford attempted its own great experiment, even though that represented a “mixed system.”

        Common sense dictates that an OEM not undermine its own dealers. Only a small cadre here seems to think that would make any kind of sense. I don’t see NADA worried about that.

        Even though I have asked repeatedly of the dug in group who hate auto dealers, I have still not received an answer about how trade ins are handled at Tesla. As amateurs, these guys don’t know how the sales tax is handled. In an 8% sales tax state, a $15K trade in represents a credit of $1200 just on the trade in. Selling the trade to AutoNation or CarMax costs the consumer that amount of money. Or is their some deeper arrangement we don’t know about? Tesla just gives up the profit available from the trades? Has anyone thought this through?

      • 0 avatar
        L'avventura

        I know the area very well, Tysons right now is a central area for a lot of dealerships along route 7, with NADA located right off of it.

        But Tysons urbanization also means most of the area will be torn up and replaced with high rises after the Silver line is completed. Its not just the metro, Tysons eventually even plans of having a trolley based circulater to run between the Silver line areas:

        Comprehensive plan:
        http://www.fairfaxcounty.gov/tysons/comprehensiveplan/

        Down the road, most of those dealerships near NADA HQ will be gone, the land has already been sold, the Audi, Aston Martin, Porsche, Audi dealers included.

        http://www.washingtonpost.com/wp-dyn/content/article/2010/07/16/AR2010071605537.html

  • avatar

    RE: “Author: Vulpine
    Comment:

    “You say it’s not a big deal, ruggles, but you ignore one point: the fact that Tesla had to go to court in the first place. Based on your commentary above, they shouldn’t have even had the need, yet obviously they did or they would have opened a location without going through that particular hassle.”

    The agencies in the various states establish statutes for their own reasons. For example, many states have rules that say a dealer can’t sell cars from a display lot that isn’t paved. This has nothing to do with any franchise dealer lobbying. I am hearing Tesla’s showroom didn’t meet some kind of “ten vehicle standard.” This has nothing to do with franchise law. TX and some of the other are a different story. One would think Tesla would have checked existing statutes BEFORE renting the space that didn’t comply.

    “All the rest of that discusses Tesla’s plans, UNTIL you quote, “In April, Tesla’s request to operate a dealership was denied by the state Department of Motor Vehicles.” At that point, the facts alone refute your initial statement of, “Tesla has been free to establish its showrooms … and has been from the beginning.””

    Interesting you clipped my quote here. Anyone can look at my actual quote to see what I really said.

    • 0 avatar
      Vulpine

      Aye, just as you have done in some of your own commentary…

      Let me ask you this: Why would nobody complain about traditional dealerships leaving a car in the mall with all kinds of signage and even competing dealerships frequently displaying there, yet those same dealerships complain when Tesla actually rents a storefront to do the same thing? There’s a logical dissolution here that implies, “we can do it because we’re a dealership, they shouldn’t do it because they’re a manufacturer.” In other words, they didn’t want the competition.

      • 0 avatar

        There are all sorts of laws regarding leaving cars at the mall, depending on the state and municipality. But, as usual, you miss the point. It wasn’t dealers complaining. It was the DMV.

        Many states won’t allow a dealership without also having service facilities. This has nothing to do with dealers, but with the state protecting consumers.

        You are so lacking in actual knowledge of the industry it is doubtful you will ever understand it. There is a HUGE difference between a LICENSED DEALER in the state displaying at a mall and an OEM with NO DEALER LICENSE in the state SELLING vehicles at a mall. Displaying is one thing. Selling is something else again. If you want to sell you need to have space to display 10 vehicles AND you need a service facility. This is according to the DMV tasked with protecting consumers. Looks like Tesla complied to receive a dealer license in the state.

        You think you are capable of logic, and you might be. But your logic requires understanding a LOT more facts to even begin to be valid. Don’t enbarrass yourself further. Study up on why states have DMVs and other regulatory agencies to protect consumers. I would think regulation of dealerships would be popular with you.

        • 0 avatar
          Vulpine

          Not a logical argument. No dealer license because there’s no dealership. Ergo, DMV simply didn’t have a foot to stand on. Again I ask, “Who pointed this out to them?” I’m far more willing to accept that somebody complained because the mall certainly didn’t have a problem with them use the vacant store as a display and marketing location–as long as they paid their rent. A car dealership could have done the same, if they were willing to accept the higher rent. What law specifically states you have to have space to “display ten vehicles” if you’re only selling one?

          As your quoted article pointed out, Tesla specifically appealed the original verdict and had it reversed.

          And yes, I’d like to see many more regulations on “traditional” dealerships because “bait and switch” is still rampant at many dealerships. Gross overpricing of vehicles is still rampant at many dealerships (most, if you want a personal opinion.) All these dealerships have done to dodge most laws is to make their advertising more specific–as in when they offer an acceptably low price in the paper (or online) they now list the specific vehicle they’re offering for that price and then go out of their way to steer the customer away from that vehicle if at all possible. Meanwhile, the typical pickup truck, especially the higher-end models, have their lot price set as much as 100% above invoice. (Don’t even try to tell me they don’t; remember, I was part of that world for a while and got disgusted with it.) And what they ‘lose’ by overpaying a trade in (really, a 10-year-old car or truck at near 50% of retail?) is usually made up by over-pricing the trade in (if it’s in good enough condition or by having not-so-hidden fees jacking up the sticker price before the sale. In fact, many dealerships now put as much as $2500 on the sticker for “Dealer Prep” which consists of peeling off protective plastics and MAYBE a wash and wax, then add more for things like ‘undercoating’ or other nit-picky things that are grossly overpriced to pad the sticker.

          Yes, I would like to see more regulation that makes such things completely optional and that MUST be specifically added AFTER the sale at the buyers choice.

  • avatar

    RE: “The whole point of Just In Time manufacturing is to eliminate excess inventory and reduce costs. It is possible that Tesla may eventually go the traditional route, but personally I don’t think he will until demand simply gets too high to keep up.i

    The point of Just in Time manufacturing IS to MINIMIZE excess inventory of PARTS used in the manufacturing. There are MANY things that will change at Tesla the first time they encounter a supply/demand imbalance. That’s why all of these rosy predictions are over the top for those who have been actual market participants, rather than inexperienced theorists.

  • avatar

    RE: “On the other hand, when you consider the safety of the Tesla; a 5-star rating from the NHTSA and the point for all the hot fire that Model S in Oregon had and yet the interior was untouched by that fire, the price of the car may well represent the real quality of the car when compared to all others. Maybe, just maybe, he is not selling that car at “price points that are as high as possible”. Hmmm?”

    One might wonder if any other vehicle would catch fire from just encountering a piece of scrap metal in the road. Seems the stock market was somewhat alarmed by the event.

    Tesla COULD raise the price of the Model S and they would still sell… but probably not in the same numbers.

    • 0 avatar
      Vulpine

      Or would that ‘unusually shaped piece of metal’ have instead penetrated the engine, the floor pan or the gas tank, resulting in fire in the first or latter case or injured or even killed passenger when it penetrated the passenger compartment? Keep in mind that the metal that caused that fire pierced a 1/4″ piece of armor plate designed to protect the battery from typical road hazards. The results could have been catastrophic by comparison. It’s very possible that the owner may get his car back after relatively minor repairs. If it had been a gasoline fire, there wouldn’t be a chance of that.

  • avatar

    Sounds like Tesla needs to work on their armor plate. The occasional anecdote probably won’t be an issue. A trend? We’ll see. Perception is reality in these cases.

    “Firefighters struggled to extinguish the Tesla fire, finding that the flames reignited. Crews found that water seemed to intensify the fire, so they began using a dry chemical extinguisher.

    After dismantling the front end of the vehicle and puncturing holes in the battery pack, responders used a circular saw to cut an access hole in the front section to apply water to the battery, according to documents. Only then was the fire extinguished.

    Tesla shares fell sharply Wednesday and Thursday after a video of the car fire circulated on the Internet. The shares recovered somewhat Friday, rising $7.67, or 4.4 percent, to $180.98. They still finished the week with a loss of $9.92, or 5.2 percent.”

    • 0 avatar
      Big Al from Oz

      @ruggles
      TTAC can be addictive.

      I enjoy your commentary. But sometimes, like myself you need correcting.

      Watch out and enjoy the ride ;-)

    • 0 avatar
      mcs

      >> Sounds like Tesla needs to work on their armor plate.

      If that debris could penetrate 1/4 armor plating, what would it have done to the plastic gas tank on a conventional car?

  • avatar

    If you think I’m wrong, tell me. As long as your facts are straight everyone has the right to their opinion.

  • avatar

    RE: “You’ve been on the other side so long that you don’t know what it’s like to be in the other guy’s shoes.”

    And you know this how?

    RE: “It’s difficult to negotiate a car deal without feeling as if the dealer isn’t trying to screw you.”

    And the seller is worried about YOU trying to SCREW them. BTW, how do YOU describe “screw?”

    RE: “The command-and-control tactics are effective for closing deals, but they tend to leave a bad taste in peoples’ mouths. The buyers may do the deal, but it makes them feel dirty.”

    I suggest they shop until they find a more user friendly environment based on THEIR perceptions.

    RE: “Personally, I look it as a game and enjoy it. I’ve negotiated larger deals professionally, so in my view, a car purchase is a cakewalk.”

    Exactly the point. I don’t get a break when I deal with the medical community. Or the insurance community. Or when I buy a piece of property. Or a business. A car is the second largest purchase most people make in their life. We either do the research or we remain unschooled participants in a business situation.

    RE: “I’m also willing to recognize car sales as a win-lose type of transaction, so I play dirty and turn the gamesmanship to my advantage.”

    Good for you. You put in the time. You realize that for you to get a better than average deal, others have to pay above average to maintain the average. Its a cold cruel world, right? Business is business. Those who want to do it easy are free to shop for a place where that is possible.

    RE: “But that isn’t everyone’s cup of tea. You may find my comments (aside from this one) more agreeable than those of other posters here, but I’m also the guy who the sales manager wants to strangle by the time that the paperwork is signed.”

    If you think you drive them crazy you should ride with me when I buy a car.

    RE: “As a buyer, understanding your business comes with a willingness to use passive-aggressive tactics to beat you guys at your game. If more people figured that out, then you’d have to change your approach, but you benefit from the lack of knowledge and unwillingness to use the appropriate tactics.”

    Please continue to take advantage of dealers. They’ll live through the experience.

    • 0 avatar
      Vulpine

      You’re still thinking too much like a professional salesperson and not like your ‘victims’. Allow me to elucidate:

      * “And you know this how?” Simple. You’ve told us so yourself.
      * “BTW, how do YOU describe “screw”? Taking ‘unfair’ advantage from a position of strength. The dealer knows he has an item the customer wants and he uses that position to find ways to charge more for the vehicle than he really needs. And before you ask how, that’s in the next response.
      * “I suggest they shop until they find a more user friendly environment based on THEIR perceptions.” HAH! My county has a grand total of TWO Ford dealerships over 15 miles apart–both owned by the exact same person. You can’t even “shop” for a Ford because both dealerships are operated exactly the same way and maintain the exact same prices. No competition and almost no choice unless you’re willing to drive more than 50 miles away or cross state lines to dealerships more than 25 miles away. Not everybody has the time or means to travel that far for shopping or service.
      * “I don’t get a break when I deal with the… insurance community…or when I buy a piece of property… or a business…” Really? So you’re perfectly willing to abuse “weak” customers yet let yourself be a “weak” customer when facing an insurance problem/real estate purchase. Why can I NOT believe that?
      * “Those who want to do it easy are free to shop for a place where that is possible.” Already refuted above. If you want a Ford, you simply don’t have a convenient choice. The next state over, you have 5 or 6 DIFFERENT brand dealerships owned by a single individual–GMC, Chevrolet, Mitsubishi, Kia, etc., not even related brands in many cases, yet all owned by a single individual or corporation using all the exact same techniques at every one of them–again killing any chance at competition or ‘shopping’ between them.
      * “If you think you drive them crazy, you should ride with me when I buy a car.” I can well imagine. By working on the ‘inside’, you already know all the tricks and counters. The vast majority of car buyers DON’T. That’s not their fault–they’re not in the business of buying cars.

    • 0 avatar
      Pch101

      “And you know this how?”

      Your responses make it pretty obvious. Everything that you say comes out of a dealer sales training seminar.

      “And the seller is worried about YOU trying to SCREW them.”

      Well, unless I steal the car or point a gun at your head, I don’t see how that’s even possible.

      The seller and buyer are not on equal footing, you know. The seller has more information and is trained to sell, whereas the buyer probably doesn’t know what he or she is doing.

      “I suggest they shop until they find a more user friendly environment based on THEIR perceptions.”

      Command and control tactics are common throughout the industry. They aren’t really avoidable. My perceptions have nothing to do with it — the tactics are prevalent throughout the business, and are par for the course.

      “You put in the time. You realize that for you to get a better than average deal, others have to pay above average to maintain the average. Its a cold cruel world, right?”

      It is, but it doesn’t give me the pleasure that it gives you. You seem to like it this way, whereas I just accept it for what it is and deal with it.

      I’ll give you credit for that comment, by the way — most car salesmen would bristle at what I’ve said. (I was banned from Edmunds from educating people about this stuff on the not-so-smart “Smart Shopper” forum.) They talk a big game about wanting relationships and valuing educated buyers, when they really want to cultivate patsies who get hosed and don’t even realize that they’ve been taken.

      • 0 avatar
        ajla

        “I’ll give you credit for that comment, by the way — most car salesmen would bristle at what I’ve said…”

        Yea, I’ll give Ruggles credit for this too. He’s at least honest about the situation.

  • avatar

    RE: “Not a logical argument. No dealer license because there’s no dealership. Ergo, DMV simply didn’t have a foot to stand on.”

    Actually, DMV makes the rules, your arbitrary and unschooled opinion notwithstanding.

    RE: “Again I ask, “Who pointed this out to them?” I’m far more willing to accept that somebody complained because the mall certainly didn’t have a problem with them use the vacant store as a display and marketing location–as long as they paid their rent.”

    Who pointed what out to who. If you want to open a dealership you make application to the regulatory agency in the state. If you try to open one without acquiring the proper license, you’ll have issues.

    RE: A car dealership could have done the same, if they were willing to accept the higher rent.”

    Its not a dealership unless it has a license.

    RE: ” What law specifically states you have to have space to “display ten vehicles” if you’re only selling one?

    As your quoted article pointed out, Tesla specifically appealed the original verdict and had it reversed.”

    First, ask the VA DMV. And I’m pretty sure your account of what happened isn’t correct. I wasn’t there, but I understand Tesla agreed to comply with the DMV.

    RE: “And yes, I’d like to see many more regulations on “traditional” dealerships because “bait and switch” is still rampant at many dealerships. Gross overpricing of vehicles is still rampant at many dealerships (most, if you want a personal opinion.) All these dealerships have done to dodge most laws is to make their advertising more specific–as in when they offer an acceptably low price in the paper (or online) they now list the specific vehicle they’re offering for that price and then go out of their way to steer the customer away from that vehicle if at all possible. Meanwhile, the typical pickup truck, especially the higher-end models, have their lot price set as much as 100% above invoice. (Don’t even try to tell me they don’t; remember, I was part of that world for a while and got disgusted with it.) And what they ‘lose’ by overpaying a trade in (really, a 10-year-old car or truck at near 50% of retail?) is usually made up by over-pricing the trade in (if it’s in good enough condition or by having not-so-hidden fees jacking up the sticker price before the sale. In fact, many dealerships now put as much as $2500 on the sticker for “Dealer Prep” which consists of peeling off protective plastics and MAYBE a wash and wax, then add more for things like ‘undercoating’ or other nit-picky things that are grossly overpriced to pad the sticker.”

    So why aren’t you actively reporting all of these violations you say exist? If you don’t like a particular dealer feel free to find one that satisfies you.

    RE: “Yes, I would like to see more regulation that makes such things completely optional and that MUST be specifically added AFTER the sale at the buyers choice.”

    Go for it. Why not just find a dealer who doesn’t employ these strategies you dislike?

    • 0 avatar
      Vulpine

      So you’re telling me that the DMV arbitrarily walked into a ‘random’ shopping mall, saw the Tesla display and said, “This is a dealership; you’re breaking the law.” In a word? BULL. I don’t think so. Somebody almost had to complain because they felt their ‘rights’ were being threatened. Many laws are never enforced UNLESS somebody complains. That’s just the way law tends to work in this country.

      * So why aren’t you actively reporting all of these violations you say exist?” I do–to the manufacturer. I’ve initiated several changes at my local Chrysler dealer. The dealership itself is one that only barely retained its franchise when Chrysler pared down their network.
      * “Go for it. Why not just find a dealer who doesn’t employ these strategies you dislike?” I would–if I were willing to drive 50 miles or more just to buy a car or get it serviced. Even then, I can’t be sure that dealership will be any different. The same is true for every other brand within easy range of where I live.

  • avatar

    RE: “Oh, wait.. this is my fault isn’t it Ruggles?”

    Why would it be your fault?

    RE: “Yes, it’s my fault for not mentioning that the last desperate traul through Autotrader was FAR from my first use of the internet.”

    Glad to hear it. Good you’re not helpless fodder for ruthless car dealers.

    RE: “My fault for not mentioning that the internet was THE FIRST PLACE I went finding pricing information for the car I wanted.”

    Good for you. Did you understand what you found?

    RE: “My fault for not mentioning how much I flogged the build-and-price tools at Car-and-Driver, Edmunds.com, Cars.com and Truecar to come up with $5000 as a reasonable top-end price.. only for the dealers to go.”

    Should have been easy, right? Did you go to a TrueCar dealer?

    RE: “Oh, you can only go as high as $5000? Well we can only come down to $6000.. Oh, you found $6000? Well now our base price is $8500.. you can shake out that much of course, right? Right? We don’t give a crap how much this hurts your savings, we just consider all your bank account are belong to us and if you’d just sign it all over we’d much appreciate it.””

    Your savings are a dealer’s problem?

    • 0 avatar
      Vulpine

      “Your savings are a dealer’s problem?

      Way to divert the argument. His statement made it very clear that instead of trying to work WITH him, they kept jacking the price up every time he TRIED to work with THEM. He has every right to be highly upset at them–especially AFTER he had gone to all that work to determine what the price should be.

      The only mistake he made? He made his “Top Dollar” his opening number, rather than using true negotiation techniques by offering about 1/2 that as his opener. Because he was not a trained or experienced negotiator, the dealership thought they had a patsy.

      As for asking if he went to a TrueCar dealer, it shouldn’t matter. TrueCar looks at the region and shows the expected mean sales price of all similar vehicles. That $5000 price tag should have been roughly available at any dealership–maybe plus or minus $1000–which he at least tried to meet.

      You see, I do know how to negotiate and that is one reason why I tend to order rather than buying off the lot–I avoid all that ‘dealer bloat’ in the process.

    • 0 avatar
      ajla

      “Your savings are a dealer’s problem?”

      It isn’t, but a dealer’s gross profit or their ability to make a living isn’t our problem either.

  • avatar

    RE: “Author: Vulpine
    Comment:
    You’re still thinking too much like a professional salesperson and not like your ‘victims’. Allow me to elucidate:”

    You’re going to tell me how I should think now? You have a victim complex?

    RE: “And you know this how?” Simple. You’ve told us so yourself.”

    I’ve told you something about myself, certainly not everything. But you’re sure quick to jump to conclusions.

    RE: “* “BTW, how do YOU describe “screw”? Taking ‘unfair’ advantage from a position of strength. The dealer knows he has an item the customer wants and he uses that position to find ways to charge more for the vehicle than he really needs.”

    So describe “unfair.” What do you think the role of a seller is? Are they suppose to hold the customer’s hand and look out for their welfare more than their own? How would YOU know what a dealer “needs?” Are you some kind of a socialist?

    RE: ” And before you ask how, that’s in the next response.
    * “I suggest they shop until they find a more user friendly environment based on THEIR perceptions.” HAH! My county has a grand total of TWO Ford dealerships over 15 miles apart–both owned by the exact same person. You can’t even “shop” for a Ford because both dealerships are operated exactly the same way and maintain the exact same prices. No competition and almost no choice unless you’re willing to drive more than 50 miles away or cross state lines to dealerships more than 25 miles away. Not everybody has the time or means to travel that far for shopping or service.”

    Those people are at a disadvantage then, aren’t they. Maybe they should consider a different brand. So what’s YOUR solution?

    * “I don’t get a break when I deal with the… insurance community…or when I buy a piece of property… or a business…” Really? So you’re perfectly willing to abuse “weak” customers yet let yourself be a “weak” customer when facing an insurance problem/real estate purchase. Why can I NOT believe that?”

    I put in the work.

    RE: “Those who want to do it easy are free to shop for a place where that is possible.” Already refuted above. If you want a Ford, you simply don’t have a convenient choice.”

    Not refuted at all.

    RE: “The next state over, you have 5 or 6 DIFFERENT brand dealerships owned by a single individual–GMC, Chevrolet, Mitsubishi, Kia, etc., not even related brands in many cases, yet all owned by a single individual or corporation using all the exact same techniques at every one of them–again killing any chance at competition or ‘shopping’ between them.”

    So your solution is to have ALL dealerships owned by the same entity?

    RE: “”If you think you drive them crazy, you should ride with me when I buy a car.” I can well imagine. By working on the ‘inside’, you already know all the tricks and counters. The vast majority of car buyers DON’T. That’s not their fault–they’re not in the business of buying cars.”

    Maybe they should learn. Otherwise, they’ll be perpetual victims in the business world.

  • avatar

    RE: “So you’re telling me that the DMV arbitrarily walked into a ‘random’ shopping mall, saw the Tesla display and said, “This is a dealership; you’re breaking the law.” In a word? BULL. I don’t think so.”

    What YOU think doesn’t count for much. Try opening a restaurant with first getting the proper license.

    RE: “Somebody almost had to complain because they felt their ‘rights’ were being threatened. Many laws are never enforced UNLESS somebody complains. That’s just the way law tends to work in this country.”

    If Tesla doesn’t have the business acumen to know they need to be licensed to do business, I wouldn’t put a lot of faith in their future.

  • avatar

    RE: “So why aren’t you actively reporting all of these violations you say exist?” I do–to the manufacturer. I’ve initiated several changes at my local Chrysler dealer. The dealership itself is one that only barely retained its franchise when Chrysler pared down their network.”

    And you understand the details of this? I seriously doubt it.

    RE: “* “Go for it. Why not just find a dealer who doesn’t employ these strategies you dislike?” I would–if I were willing to drive 50 miles or more just to buy a car or get it serviced. Even then, I can’t be sure that dealership will be any different. The same is true for every other brand within easy range of where I live.”

    If you aren’t willing to shop, you live with the consequences.

    • 0 avatar
      Pch101

      “If you aren’t willing to shop, you live with the consequences.”

      What’s funny, though, is that a smart shopper will invariably upset the dealers. You may say that, but you don’t truly mean it whenever you and your brethren are confronted by it.

  • avatar

    RE:”Your savings are a dealer’s problem?

    Way to divert the argument. His statement made it very clear that instead of trying to work WITH him, they kept jacking the price up every time he TRIED to work with THEM. He has every right to be highly upset at them–especially AFTER he had gone to all that work to determine what the price should be.”

    And HE tried to get them to sell their car to him based on HIS budget.

    RE: “The only mistake he made? He made his “Top Dollar” his opening number, rather than using true negotiation techniques by offering about 1/2 that as his opener. Because he was not a trained or experienced negotiator, the dealership thought they had a patsy.”

    Perhaps. I don’t know what they were thinking. I wasn’t there.

    RE: As for asking if he went to a TrueCar dealer, it shouldn’t matter. TrueCar looks at the region and shows the expected mean sales price of all similar vehicles. That $5000 price tag should have been roughly available at any dealership–maybe plus or minus $1000–which he at least tried to meet.”

    Exactly why should the price be the same at every dealership. To achieve that there would have to be collusion, frowned on by the FTC and state AG offices.

    RE: “You see, I do know how to negotiate and that is one reason why I tend to order rather than buying off the lot–I avoid all that ‘dealer bloat’ in the process.”

    Sounds like you have a solution you should share with the victims here.

  • avatar

    We SHOULD also have world peace and no one should go hungry and have access to healthcare. Its a cold, cruel, world.

  • avatar

    RE: “It isn’t, but a dealer’s gross profit or their ability to make a living isn’t our problem either.”

    Of course it isn’t. So don’t buy until you’re satisfied.

  • avatar

    RE: “The system is what it is.”

    And it works 60 million times each year. Don’t be a victim. Put in the work. Or, at least stop whining about it.

    • 0 avatar
      doctor olds

      @ruggles- Don’t let the presumptuous, inexperienced sideline chatters get you down! It is good to read comments based on real world knowledge rather than the typical blogosphere BS based on minimal or distorted understanding of reality.

      No one is forced to by any product (other than health insurance, I suppose) from any particular seller. If you don’t like the deal, walk away. It is not really that hard.

      As for private deals, I had a young man come up out of Detroit to test drive my Trans Am GTA for sale in 1988. He showed me a gun, said “I’ll take it.” Put me out on the street.
      I like to lease nowadays.

  • avatar

    RE: “If you have time: private party buying and selling. I can not recommend it enough.”

    Right. God knows you don’t have to negotiate when buying from a privte party. :)

    RE: “Even with the handful of no shows, it’s way better than the dealership experience IMO.”

    Yea, you want strangers knowing your telephone number and address, right? AND you don’t have any use for the sales tax trade in credit, but you’ll bitch about the dealer making an extra $500. or so.

    RE: “If you are lucky enough to live near a CarMax or one price dealer that can be a big help too.”

    Then you can get screwed and pretend you didn’t.

    • 0 avatar
      ajla

      “Yea, you want strangers knowing your telephone number and address, right?

      I’m not that worried about it. Take reasonable precautions.

      If you are afraid about it then don’t do it. If you had a bad experience in the past then don’t do it. If you think the safety the dealer provides is worth it, then use the dealer.

      “AND you don’t have any use for the sales tax trade in credit, but you’ll bitch about the dealer making an extra $500. or so.”

      What good is the trade in credit if I can beat it with my higher private party selling price?

      “Then you can get screwed and pretend you didn’t.”

      You shouldn’t claim that you got the best price possible in those cases, but you can also consider that premium to be the price paid for a lower hassle experience. If you want rock bottom prices expect to fight for it.

  • avatar

    RE “And you know this how?”

    “Your responses make it pretty obvious. Everything that you say comes out of a dealer sales training seminar.”

    And how many of those have you attended? NOTHING I’ve said would be part of a dealer sales training seminar. Nothing.

    RE: “”And the seller is worried about YOU trying to SCREW them.”

    Well, unless I steal the car or point a gun at your head, I don’t see how that’s even possible.”

    Hopefully, it isn’t possible. But it happens.

    RE: “The seller and buyer are not on equal footing, you know. The seller has more information and is trained to sell, whereas the buyer probably doesn’t know what he or she is doing.”

    All true. The seller always has an edge in that regard.

    RE: “I suggest they shop until they find a more user friendly environment based on THEIR perceptions.”

    “Command and control tactics are common throughout the industry. They aren’t really avoidable. My perceptions have nothing to do with it — the tactics are prevalent throughout the business, and are par for the course.”

    Command and control?

    RE: “You put in the time. You realize that for you to get a better than average deal, others have to pay above average to maintain the average. Its a cold cruel world, right?”

    “It is, but it doesn’t give me the pleasure that it gives you. You seem to like it this way, whereas I just accept it for what it is and deal with it.”

    Yes, I embrace it because its reality. I’m too old to live in la la land. La la land doesn’t work well in the business world. Reality based is much better for a business person.

    RE: “I’ll give you credit for that comment, by the way — most car salesmen would bristle at what I’ve said. (I was banned from Edmunds from educating people about this stuff on the not-so-smart “Smart Shopper” forum.) They talk a big game about wanting relationships and valuing educated buyers, when they really want to cultivate patsies who get hosed and don’t even realize that they’ve been taken.”

    After all these posts I continue to hear about “screwed,” “hosed,” “unfair,” “fair,” etc. You guys throw these terms around without definition. Will anyone show the business person in them by defining what return is “fair” for a dealer to make? Or would you all prefer to just through around emotional terms without quantifying it. Its time for some intellectual honesty, don’t you think?

    • 0 avatar
      Pch101

      “After all these posts I continue to hear about “screwed,” “hosed,” “unfair,” “fair,” etc. You guys throw these terms around without definition.”

      As I’ve noted, you’re so deeply committed to the sell side of the business that you’ve lost the ability to see things from the perspective of the unknowledgable buyer.

      You should know damn well that dealers use command-and-control tactics. Dealers try to figure out what personality type they’re dealing with, and then dominate the relationship. If they can’t assume the alpha position by being nice, then they’ll yell, scream, bully, intimidate and threaten in an effort to get control of the customer.

      As I said, this is all very predictable — it’s part of the training — so a skilled buyer can turn the tables on them. (The dealers aren’t accustomed to people who know how to read them.)

      But most buyers don’t figure this stuff out and use the wrong approaches in trying to cope with it. Even if they buy the car, they end up getting upset because they were made to feel like a loser in the transaction. You can’t expect people to be happy if they’ve had their dignity taken away from them.

    • 0 avatar
      doctor olds

      @Ruggles- One of the TTAC authors, Ronnie Schreiber, once pointed out that my effort to use logic and facts to persuade were doomed to fail with those whose opinions are not founded in that way. There is a lot of that on this site.

  • avatar

    RE: “If you aren’t willing to shop, you live with the consequences.”

    “What’s funny, though, is that a smart shopper will invariably upset the dealers. You may say that, but you don’t truly mean it whenever you and your brethren are confronted by it”

    Bullshit. You have no idea. And why should a consumer be concerned about “offending” a dealer. They try to all the time. A smart dealer will blow off the time waster and send him/her down the road. I’m a consumer these days. I have no problem pissing off a dealer and have quite a talent for it.

  • avatar

    For the record – I am an advocate for sales people. The way they are treated by most dealers is reprehensible. Its no wonder there is so much turnover, with crude inexperienced rookies waiting on customers. Every time a customer shops for a car, they have to find a new sales person because MOST dealerships have gone through 30 sales people since the owner last bought at the dealership. I blame this on dealers AND the OEMs. Nevertheless, selling cars is some of the best training for the business world a person could ever receive. Like most people who weren’t born into the business, I started in the business to tread water while a looked for a real job. I worked for a dealer who quoted everyone the same margin and was paid salary with a VERY small commission per sale that had NOTHING to do with gross profit on the deal. I learned how to do everything wrong before I got into the real car business.

    At the same time, I am an advocate for business people who have made substantial investments based on rules and agreements in place at the time they made that investment. Dealers need to be protected from the whims of OEM employees who have NO SKIN in the game.

    I visit MANY dealerships these days as a consultant in the field of finance. I am deeply involved in CFPB issues and spend my time attacking the CFPB for some of the stupid things they do while attacking dealers when they are their own worst enemy. I also defend the CFPB on certain issues.

    I have NO PATIENCE for certain dealer strategies, and once cleared out a group of sales people when I was leaving a dealership. Seemed the “manager wanted to talk to me before I left.” I ran over a sales persons foot and watched him hop around in pain with a big smile on my face. When I say I have no tolerance, I mean NO TOLERANCE. But some of the stuff I hear here is just the whinings of amateurs who have no understanding of the business world.

  • avatar

    RE: “Author: doctor olds
    Comment:
    @ruggles- Don’t let the presumptuous, inexperienced sideline chatters get you down! It is good to read comments based on real world knowledge rather than the typical blogosphere BS based on minimal or distorted understanding of reality.

    No one is forced to by any product (other than health insurance, I suppose) from any particular seller. If you don’t like the deal, walk away. It is not really that hard.”

    Thank you for the kind words. I suspect you are much more than an inexperienced novice and are an active participant in the business world.

  • avatar

    RE: “Author: ajla
    Comment:
    “Yea, you want strangers knowing your telephone number and address, right?

    I’m not that worried about it.”

    Good, feel free to sell your own car. BUT PLZ make sure you don’t use tactics to sell it. You might leave the buyer with a bade taste in his/her mouth. :)

    “AND you don’t have any use for the sales tax trade in credit, but you’ll bitch about the dealer making an extra $500. or so.”

    RE: “What good is the trade in credit if I can beat it with my higher private party selling price?”

    It isn’t. If the benefits out weigh the liability, by all means go for it.

  • avatar

    RE: “As I’ve noted, you’re so deeply committed to the sell side of the business that you’ve lost the ability to see things from the perspective of the unknowledgable buyer.”

    So you say. Guess what. If one wants to be a seller one has to be a buyer FIRST. Where do you think the inventory comes from? I have plenty of experience of being a buyer. It isn’t my job to give a buyer a skill set test before selling something to someone. I understand the concern. If they won’t help themselves what is the seller supposed to do about it. Besides, all a consumer has to do is shop.

    RE: “You should know damn well that dealers use command-and-control tactics.”

    Command and control tactics? Could you be more specific?

    RE: “Dealers try to figure out what personality type they’re dealing with, and then dominate the relationship.”

    I don’t know many dealers anywhere near that sophisticated. Exactly how do you train a newbie sales person those skills?

    RE: “If they can’t assume the alpha position by being nice, then they’ll yell, scream, bully, intimidate and threaten in an effort to get control of the customer.”

    Poor helpless consumers can’t leave? And this is done 60 million times each year?

    RE: “As I said, this is all very predictable — it’s part of the training — so a skilled buyer can turn the tables on them. (The dealers aren’t accustomed to people who know how to read them.)”

    So why don’t you start a business teaching people how to buy cars, or become a broker yourself for those who are afraid of the process? They can turn it ll over to you and you can make a fee.

    RE: “But most buyers don’t figure this stuff out and use the wrong approaches in trying to cope with it. Even if they buy the car, they end up getting upset because they were made to feel like a loser in the transaction.”

    Let me get this straight – They were “made to feel like a loser” by the nasty old car dealer? Sounds like s victim complex to me.

    RE: “You can’t expect people to be happy if they’ve had their dignity taken away from them.”

    So what’s the objective? Happy or survival and ROI of the business? If a dealer is making so many people unhappy I’m sure it would come back to haunt him/her at some point. There is a whole new level of communication available via the web. Consumers take advantage of this all the time. The fact is, the most knowledgeable buyers are MUCH easier to do business with. Nothing is more aggravating than a consumer who doesn’t know a good deal from a bad deal.

    • 0 avatar
      Pch101

      “Command and control tactics? Could you be more specific?”

      I’ve already touched on it. Dealers size up the customer, try to figure out the seller’s personality type, and then try to dominate them based upon the buyer’s personality traits.

      The tactics are heavy handed, and are intended to place the buyer in a subservient position and to dazzle them with bulls…er, I mean lots of numbers and figures tossed around in order to reinforce the dealer’s position of authority and to confuse the customer.

      The dealer does not want to act a partner who negotiates on equal footing, but as the master of the relationship. Most buyers simply don’t understand this or how to deal with it. The tactics obviously work pretty well, since cars get sold in this country, but the buyers don’t like it because they figure out that they’ve been manipulated. Most other business transactions are just not this nasty.

      • 0 avatar
        mcs

        “Command and control tactics? Could you be more specific?”

        http://www.edmunds.com/car-buying/confessions-of-a-car-salesman.html

      • 0 avatar
        Kenmore

        “the master of the relationship”

        Every relationship. Like truculently refusing to use the convenient and obvious Reply button here so comments might be in related position, and maintaining just enough antagonism to lure you into searching through the scattered mess of his replies.

        “Nice dumb doggy, jump through this.”

    • 0 avatar
      Vulpine

      If you have happy customers, you have more frequent repeat business. For now, I drive a Jeep and a USED Ford. When I trade the Ford, I expect to buy another Chrysler product because that’s the place I get treated the best.

      • 0 avatar
        Les

        @Vulpine

        It’s funny, because I overall like Chrysler products based on the product itself and how I feel about the company overall and would like to see that company do well.

        However, Chrysler-brand dealerships in my local area are the ones that I have had the most problems with and where I’ve been treated the worst. The only times I haven’t had an experience with local Chrysler-brand dealerships where the sales people weren’t either overly aggressive and/or just plain sleazy in their tactics was when they were outright incompetent and I had to drive over two and a half hours away to get the exact same product at what all the online info I’d absorbed from every source possible said was a reasonable price which tells me everyone locally Could have met my original asking price but they refused because they felt entitled to my money and tried to bully me into increasing their profits at significant financial hardship to myself.

        The differences noted here does not leave me feeling predisposed towards sympathy to the franchise-dealership sales model.

        • 0 avatar
          Vulpine

          Like I said elsewhere, I had to get corporate itself involved through a number of different means–including social media. My local Chrysler dealership has been acting a lot better since then.

  • avatar

    RE: “I’ve already touched on it. Dealers size up the customer, try to figure out the seller’s personality type, and then try to dominate them based upon the buyer’s personality traits.”

    You give dealership staff a lot of credit. This is a pretty high level of sophistication you are describing.

    RE: “The tactics are heavy handed, and are intended to place the buyer in a subservient position and to dazzle them with bulls…er, I mean lots of numbers and figures tossed around in order to instill the dealer’s position of authority and to confuse the customer.”

    When a consumer is confused they typically want to go home and think about it.” This is not conducive to doing business.

    RE: “The dealer does not want to act a partner who negotiates on equal footing.”

    No shit. The two aren’t “partners.” The consumer can always leave.

    RE: “but as the master of the relationship.”

    And the poor consumer is helpless?

    RE: “Most buyers simply don’t understand this or how to deal with it.”

    Buyers all have differing levels of understanding and knowledge.

    RE: “The tactics obviously work pretty well, since cars get sold in this country, but the buyers don’t like it because they figure out that they’ve been manipulated.”

    A LARGE percentage of consumers think they’ve been taken advantage of when they haven’t been. If they have a beef, they can express it in the CSI survey that comes in the mail. They can go online and beef. They can bad mouth the dealer to their friends. They can refuse to do business with that dealer again. If there is evidence of illegality, there are a variety of remedies available.

    RE: “Most business transactions are just not this nasty.”

    MOST business transactions? How many other transactions require the price to be negotiated? There IS a difference between buying a gadget on line and buying a big ticket item where the price is negotiated. With a gadget you can price compare with a point and click. But then, there aren’t any trades taken or financing involved.

    • 0 avatar
      Pch101

      I’m sure that you don’t see the irony, but the reason that consumers gripe about car shopping is because of the attitudes that you display in your response. If you ever had an empathy gene, then somebody must have surgically removed it.

      “The consumer can always leave.”

      Of course. But that’s missing the point of this little tangent, which is to explain to you why so many consumers hate car shopping and loathe those of you in your profession.

      I’m holding up a mirror for you, but instead of looking at it, you keep trying to break it. Chill out for a minute, and try to put yourself in the other guy’s shoes, just once. You hear what I’m saying and react to it, but you’re not really listening.

      “And the poor consumer is helpless?”

      A car is the most expensive thing that most people will ever buy without assistance, or from a professional seller.

      You seem to be in denial of this, but command and control tactics are the norm in car sales. They are, in fact, intended to place the consumer in a weak position.

      “How many other transactions require the price to be negotiated?”

      I negotiate all kinds of stuff. I’ve haggled for suits, televisions, audio equipment, musical gear, you name it. But the car purchases always have the most dishonesty associated with them, because nobody moves the numbers around as does a car dealer. (There are no four squares when buying a couch.)

      It’s the norm to have the dealer “agree” to a price on a handshake, only to have a contract written up that has a higher price. The system is designed to get the buyer to think that the haggling has stopped at a certain point, only to find that the price hasn’t been set, after all. I’ve negotiated multi-million dollar business deals without anything like that happening, yet I’ve come to expect it with a car purchase.

    • 0 avatar
      Vulpine

      Re: “How many other transactions require the price to be negotiated?”
      You just made our point for us. Why should we HAVE to negotiate on the price of a car? Why can’t it be sold in the same manner as any other “gadget?” After all, a car is not REAL property in the sense of an investment; it depreciates almost 25% as soon as you drive it off the lot and the typical car has next to no resale value compared to its purchase price. Maybe–only maybe–that car will appreciate again after 25 years or more IF your particular car was well cared for or restored and it is one of a very limited number of that model remaining after that time. Even the Model T Ford, now a classic and collectors’ item, has a lower resale value than cars half its age because of its relative commonness on the roads and in displays, simply because so many were sold in the first place. It’s the rare and unusual that command the high prices today and could be considered ‘investment grade”.

      Why aren’t they sold like any other “gadget”? Because dealerships don’t want to change their sales methods and don’t want their ‘cash cow’ add-ons to be eliminated in the name of ‘fairness’ to their customers. There are other big ticket items that cost as much or more than a car that people don’t have to ‘negotiate’ for–they pay a fixed price or even have a product assembled ala carté at set prices valued at $100,000 to $1,000,000 and more. In other words, the traditional auto sales methodology is obsolete and needs to be revised.

  • avatar

    RE: “Author: Vulpine
    Comment:
    If you have happy customers, you have more frequent repeat business. For now, I drive a Jeep and a USED Ford. When I trade the Ford, I expect to buy another Chrysler product because that’s the place I get treated the best.”

    There! You said it. That wasn’t so hard, was it.

  • avatar

    RE: “If that debris could penetrate 1/4 armor plating, what would it have done to the plastic gas tank on a conventional car?”

    1/4 inch doesn’t seem like much when talking about armor plating. This fire could certainly be an aberration. It will boil down to how many incidents occur per miles of driving. If there are more fires it could be a problem. Frankly, it isn’t the type of thing Tesla needs right now as they are in a honeymoon period and seem to be gaining momentum. Ask Toyota and Audi what can happen if a perceived pattern emerges.

    • 0 avatar
      Vulpine

      First off, 1/4″ of steel is thicker than any other sheet metal on any car, even Jeep underbody protective shields. In fact, it’s as thick as the frame members of the full-sized pickup trucks sold in the US.

      To answer your second comment, I have this quote:
      “The nationwide driving statistics make this very clear: there are 150,000 car fires per year according to the National Fire Protection Association, and Americans drive about 3 trillion miles per year according to the Department of Transportation. That equates to 1 vehicle fire for every 20 million miles driven, compared to 1 fire in over 100 million miles for Tesla. This means you are 5 times more likely to experience a fire in a conventional gasoline car than a Tesla!”

  • avatar

    RE: “Author: Vulpine
    Comment:
    Yeah, at the dealership where I got Chrysler to step on some toes.”

    What did you get Chrysler to do?

  • avatar

    Hasn’t Remar Sutton been talking about this stuff for decades?

    There are as may approaches as there are car dealerships but they ALL have one thing in common. They all pay their bills with gross profit, NOT customer smiles. Ideally, a dealer gets both. That can’t always happen. There will always be a percentage who can’t be satisfied. Seems like we have a few of those in this discussion group.

  • avatar

    RE: “At one point he admitted the bald truth: it’s all about reducing competition.”

    This is a complete fabrication as I never seen any such thing.

  • avatar
    Robbie

    The traditional dealerships system makes that I am going to hold on to my 2006 car for a few more years. The money is there; and if I could order an honestly priced car online then I’d do it. The manufacturers lose, the slimy salesmen and creepy dealership owners win in the current system. Let’s hope Tesla can break the anti-competitive dealer laws.

  • avatar

    RE: RE: “it’s as thick as the frame members of the full-sized pickup trucks sold in the US.”

    Frame members are boxed. Poor analogy.

    RE: “To answer your second comment, I have this quote:
    “The nationwide driving statistics make this very clear: there are 150,000 car fires per year according to the National Fire Protection Association, and Americans drive about 3 trillion miles per year according to the Department of Transportation. That equates to 1 vehicle fire for every 20 million miles driven, compared to 1 fire in over 100 million miles for Tesla. This means you are 5 times more likely to experience a fire in a conventional gasoline car than a Tesla!”

    Straight from the Tesla website which quotes bogus numbers. IF you want to compare you need to compare with newer vehicles rather than with the entire gamut which includes a LOT of really old cars that aren’t well maintained. But time will tell if the Tesla fire is an anomaly or a trend. Relax.

    • 0 avatar
      Vulpine

      Worse refutal. Sure, frame members are boxed, but they’re still made of 1/4″ steel and you’re sure not going to penetrate that with a hammer and nail now, are you? Did you know the skid plates under a Jeep are frequently only 16-gauge steel? Only about 1/16th inch? The battery armor of the tesla is 4 times that thick.

      You claim my quote gives bogus numbers. How about YOU show us what the real numbers are? Verifiable by anybody.

  • avatar
    Les

    @ruggles

    Reading through your comments I’m left with a burning curiosity to find out this one thing.

    ..are you perhaps familiar with the works of Ayn Rand?

  • avatar

    RE: “I’m sure that you don’t see the irony, but the reason that consumers gripe about car shopping is because of the attitudes that you display in your response. If you ever had an empathy gene, then somebody must have surgically removed it.”

    Talk to me after YOU have made an investment in a business and YOUR customers threaten to pout if they don’t get what they want. If that’s not a strategy of negotiation, I don’t know what is. Sorry if you can’t handle the truth. Sorry, but there are many ways to read polls and just as many ways to ask poll questions. A car dealership is a business, not a charity.

    RE: “The consumer can always leave.”

    Of course. But that’s missing the point of this little tangent, which is to explain to you why so many consumers hate car shopping and loathe those of you in your profession.”

    First you dramatically overstate the problem. Second, it makes no difference if they like it or not. It is what it is.

    RE: “I’m holding up a mirror for you, but instead of looking at it, you keep trying to break it.”

    And YOU miss the point of being in business.

    RE: “Chill out for a minute, and try to put yourself in the other guy’s shoes, just once. You hear what I’m saying and react to it, but you’re not really listening.”

    Actually, I hear you. Do you think you are the only one with this complaint? I’ve been involved in the so called debate for twenty years. What do consumers do first chance they get? They negotiate. And you think the industry is going to change because a small group is in a pout? Try doing business in rural areas where barter is a way of life. Or with certain cultures who come from countries everything they buy at the market is price negotiated. Then explain to us the fascination Americans have with reality shows where the drama is based on the negotiation… Pawn Stars, Counting Cars, Chasing Classic Cars, etc., etc., etc. Then there are the business people accustomed to negotating business deals regularly. Then explain to us why folks who could have been buying the beautiful Saturn Aura instead went to the Camry and Accord stores to get abused instead of enjoying the stress free price fixing environment of Saturn.

    YOU say you have experience in the business. Tell us what happens when a consumer comes in and makes an offer, and the dealership says OK. Tells us what happens next.

    RE: “And the poor consumer is helpless?”

    A car is the most expensive thing that most people will ever buy without assistance or from a professional seller.”

    Not if they buy a house. If you think the real estate agent for a seller is looking out for the buyer I have some swamp land to sell you.

    RE: “You seem to be in denial of this, but command and control tactics are the norm in car sales. They are, in fact, intended to place the consumer in a weak position.”

    So you think the seller has no right to adopt a strategy, whatever it is? As long as it is legal, why shouldn’t a seller have the same rights as a buyer at either the dealer level or the private seller level? “One Price” is a selling strategy.

    RE: “How many other transactions require the price to be negotiated?”

    I negotiate all kinds of stuff. I’ve haggled for suits, televisions, audio equipment, musical gear, you name it.”

    Sounds like YOU are the problem.

    RE: “But the car purchases always have the most dishonesty associated with them, because nobody moves the numbers around as a does a car dealer. (There are no four squares when buying a couch.)”

    And you thik you understand 4 Square?

    RE: “It’s the norm to have the dealer “agree” to a price on a handshake, only to have a contract written up that has a higher price.”

    Its the norm? Please. Even YOU have to know better than that.

    RE: The systen is designed to get the buyer to think that the haggling has stopped at a certain point, only to find that the price hasn’t been set, after all.”

    THE system? What system is that? If the consumer is unhappy with the process they can just leave. The dealers knows the consumer can find another dealer quicker than they can find another buyer.

    • 0 avatar
      mike978

      “A car is the most expensive thing that most people will ever buy without assistance or from a professional seller.”

      Not if they buy a house. If you think the real estate agent for a seller is looking out for the buyer I have some swamp land to sell you. ”

      They have a buyers agent so you don`t need to have the seller’s agent looking out for you. Nobody would expect them to. There legal duty is to the seller.

      Why do you think a lot of people really don`t like car dealerships or car dealers and the experience they get there?

    • 0 avatar
      Pch101

      OK, seriously, you’re just reinforcing what we already know about dealers when you make comments like those.

      As I noted, I’ve done deals that have a lot more money on the line than there is with any new car purchase. Yet those transactions don’t include the degree of underhandedness that one finds in car sales.

      Car sales are the way that they are because (a) buyers are generally not knowledgable and (b) the tactics used by car dealers are far more confrontational than what’s typical in other business transactions, which leaves many buyers unprepared. Car dealers exploit the buyer’s ignorance to degrees that other retailers do not, and then make it more difficult by mixing in aggression in order to throw the buyer off balance.

      I understand why you do it. Personally, I have no problems dealing with it. But it is nasty by design, and it is understandable that many people don’t like it. If you can’t understand why people loathe car dealers, then you’re just out of touch, as it should be very obvious.

    • 0 avatar
      Vulpine

      Re: ” It is what it is.”
      That’s EXACTLY the point; it doesn’t have to be.

      Re: “And YOU miss the point of being in business.”
      The Mafia is a business too, and they use the same kinds of tactics.

      Re: “What do consumers do first chance they get? They negotiate.”
      Why, because that’s what they’ve been ‘trained’ to expect by all the previous automotive salespeople. They may have been ‘taught’ by their parents what to expect and don’t understand that it doesn’t have to be that way. However, MOST consumers walk in and expect to buy a car based on the cars’ stickers. If they negotiate at all, it’s on the trade-in value of their current vehicle.

      Re: “YOU say you have experience in the business. Tell us what happens when a consumer comes in and makes an offer, and the dealership says OK.”
      Why should the customer even need to make an offer? The price is CLEARLY marked on the vehicle. They only reason they would is because they think the dealer expects it. Most young people today know nothing about negotiating.

      Re: “If you think the real estate agent for a seller is looking out for the buyer I have some swamp land to sell you. ”
      You do realize that a lot of people are taken in by that kind of scam, don’t you? It may be cliché, but they do still get scammed.

      Re: “And you thik you understand 4 Square?”
      Why should there even be a need for 4Square?

  • avatar

    RE: “Author: Vulpine
    Comment:
    Re: “How many other transactions require the price to be negotiated?”
    You just made our point for us. Why should we HAVE to negotiate on the price of a car? Why can’t it be sold in the same manner as any other “gadget?””

    I have itemized the reasons ad nauseum. But a brief overview.

    Firt: If dealerships all got together to fix prices so consumers wouldn’t be unhappy because someone gets a better deal than they did, dealers would be doing time in orange pajamas.

    Second: The OEMs don’t have the beginning of the money to buy out their dealer body to change the system in place. Sorry you have no idea of the billions of dollars invested by private capital.

    Third: The OEMs aren’t about to undermine their dealer body by selling direct against them. Attorneys would love for them to try. They already received permission to try a different sales model in certain markets, which failed miserably. Evidently, there aren’t as many folks out there to support a no hassle process as you think. The experiments failed failed when consumers took the OEM “Best Price” to dealers outside of the market, where the dealers there beat that price.

    Fourth: You still haven’t figured out how to handle the trades, complicated by the sales tax calculation.

    Fifth: How would you figure out how to get all of the OEMs to go to a “Direct Model” at the same time? If Toyota wanted to do it, the others would say, “Let them go ahead and we’ll see how they do.” Toyota is the only OEM with enough money to even consider buying out their dealers.

    Sixth: The OEM production model is in place with massive investment having been made. Would YOUR factory outlets stock inventory to give production a buffer or would you try “build to order?” These considerations are just the beginning. I’d suggest you first learn the current system before trying to present your solutions as anything reasonable business people would ever consider. Now we get to watch Tesla try to make their system work.

    You STILL haven’t figured out what Musk is up to. Musk is pretty good with math. He knows he can’t get to mass market with a build to order model. His start up model is a good one as long as demand is balanced with supply. Does anyone here think he is so naive is to think this will continue forever? He’s leaving his options open. At some point he will sell out his factory owned model for HUGE multiples. Hide and watch.

    RE: “After all, a car is not REAL property in the sense of an investment; it depreciates almost 25% as soon as you drive it off the lot and the typical car has next to no resale value compared to its purchase price. Maybe–only maybe–that car will appreciate again after 25 years or more IF your particular car was well cared for or restored and it is one of a very limited number of that model remaining after that time. Even the Model T Ford, now a classic and collectors’ item, has a lower resale value than cars half its age because of its relative commonness on the roads and in displays, simply because so many were sold in the first place. It’s the rare and unusual that command the high prices today and could be considered ‘investment grade”.”

    What does this have to do with the discussion?

    RE: “Why aren’t they sold like any other “gadget”? Because dealerships don’t want to change their sales methods and don’t want their ‘cash cow’ add-ons to be eliminated in the name of ‘fairness’ to their customers.”

    Add ons are eliminated when consumers say, “NO.” Again, are you helpless?

    RE: “There are other big ticket items that cost as much or more than a car that people don’t have to ‘negotiate’ for–they pay a fixed price or even have a product assembled ala carté at set prices valued at $100,000 to $1,000,000 and more. In other words, the traditional auto sales methodology is obsolete and needs to be revised.”

    You might itemize these “Big Ticket” items where the price isn’t negotiated. Tell us more.

    A few whiners doesn’t make the current auto industry business model obsolete. If you look at automotive polls closely, respondents say they don’t like auto dealers but most like the dealer they just purchased from. This is born out by JD Power surveys. I’ll be attended a JD Power conference next week and will bring this up and get their latest data. As I’ve mentioned, JD Power once tried to convince the industry the “old model” was obsolete. This was twenty years ago. And the retail industry is alive and well. And Saturn is dead and gone.

    • 0 avatar
      Vulpine

      * “Firt: If dealerships all got together to fix prices so consumers wouldn’t be unhappy because someone gets a better deal than they did, dealers would be doing time in orange pajamas.”
      Personally, I think many dealership owners and/or General Managers NEED those orange pajamas.

      * “Second: The OEMs don’t have the beginning of the money to buy out their dealer body to change the system in place. Sorry you have no idea of the billions of dollars invested by private capital.”
      Maybe I have a better idea than you think. I watched as nearly a dozen new car lots had their inventory WIPED OUT by a single hailstorm with grapefruit-sized stones. Every car not inside the building was totaled by the insurance companies. Millions of dollars lost in one small event. Had they NOT had insurance, those dealerships themselves would have been wiped out. And no, I already know insurance is not free; they pay HIGH premiums to protect that inventory. And I did NOT say the OEM had to buy out the dealership, but they do have the ability to modify dealer contracts–including pulling the franchise itself if they feel it necessary.

      * “Fourth: You still haven’t figured out how to handle the trades, complicated by the sales tax calculation.”
      Why even have to worry about trade-in sales tax calculations? There are other businesses now designed to handle that independently.

      * “Fifth: How would you figure out how to get all of the OEMs to go to a “Direct Model” at the same time? If Toyota wanted to do it, the others would say, “Let them go ahead and we’ll see how they do.””
      What do you think Tesla is trying to do now? Why fight it when Tesla can be the guinea pig, as it were. The question is, why ARE they fighting it?

      * “Sixth: The OEM production model is in place with massive investment having been made. Would YOUR factory outlets stock inventory to give production a buffer or would you try “build to order?””
      How many of us remember how GM lost millions by over-producing the ’13 pickup trucks in preparation for re-tooling their plants–only to discover sales were slow enough that they resulted with a gross overstock that still hasn’t sold out almost a year later.

      * “You STILL haven’t figured out what Musk is up to. Musk is pretty good with math. He knows he can’t get to mass market with a build to order model. His start up model is a good one as long as demand is balanced with supply. Does anyone here think he is so naive is to think this will continue forever? He’s leaving his options open. At some point he will sell out his factory owned model for HUGE multiples.”
      Maybe. Maybe not. Apple is now the biggest corporation in the world and they never devolved to everybody else’s manufacturing and sales policies. That’s also why they make the highest profits–because they don’t devolve to dog-eat-dog sales practices. They’re different in more ways than one, which too many people simply refuse to accept.

      * “What does this have to do with the discussion?”
      Everything. As it is not REAL property, it must be a “gadget” and as such does not require ‘negotiation’ style sales.

      * Add ons are eliminated when consumers say, “NO.” Again, are you helpless?”
      How do you tell the dealership to REMOVE THE WAX JOB?
      How do you tell the dealership to REMOVE THE UNDERCOAT?
      How do you tell the dealership to REMOVE THE DEALER PREP?
      How the DEVIL can you say NO to something that has already been done? THAT is the kind of tactics they use.

      * “You might itemize these “Big Ticket” items where the price isn’t negotiated. Tell us more.”
      One word: Jewelry.

      * “A few whiners doesn’t make the current auto industry business model obsolete.”
      No, time, technology and society does.

  • avatar

    RE: “The differences noted here does not leave me feeling predisposed towards sympathy to the franchise-dealership sales model.”

    Your story is incomplete. You haven’t mentioned the amount of the difference or if it had to do with trade in values and/or financing. Regardless, you’d better get used to the current system. It isn’t going anywhere.

  • avatar

    RE: “The manufacturers lose, the slimy salesmen and creepy dealership owners win in the current system. Let’s hope Tesla can break the anti-competitive dealer laws.”

    The manufacturers lose? Not hardly. Yes, the slimy sales people and dealership owners WIN. They get to stay in business and make ROI. And consumers get inventory to choose from and someone to do warranty work on their new purchase. Consumers get someone to take their trade in and arrange financing. Consumers get to enjoy the opportunity to shop dealers in competition with each other. And there will ALWAYS will be whiners. Its just part of the deal.

  • avatar

    RE: “@ruggles

    Reading through your comments I’m left with a burning curiosity to find out this one thing.

    ..are you perhaps familiar with the works of Ayn Rand?”

    You mean the RW’s favorite athiest?

  • avatar

    RE: “Author: mike978
    Comment:
    “A car is the most expensive thing that most people will ever buy without assistance or from a professional seller.”

    Not if they buy a house. If you think the real estate agent for a seller is looking out for the buyer I have some swamp land to sell you. ”

    They have a buyers agent so you don`t need to have the seller’s agent looking out for you. Nobody would expect them to. There legal duty is to the seller.”

    So why don’t consumers hire an agent to represent them when buying a vehicle? I suggested that as a business model for some of the participants here.

    RE: “Why do you think a lot of people really don`t like car dealerships or car dealers and the experience they get there?”

    Whiners have existed since I first got into the business in 1970. Some things never change. There would be whiners if the dealer level of competition went away. Consumers have the opportunity to negotiate and shop. They are bound by much looser standards than dealers. If they want to whine about it I don’t really care. In fact, I find it humorous. Some people wouldn’t know a good deal if it bit them in the ass.

  • avatar

    RE: “OK, seriously, you’re just reinforcing what we already know about dealers when you make comments like those.”

    WE? Who is WE? So you want me to sugar coat the truth for you? Sorry you can’t handle the truth. Beyond a certain reasonable point, dealers just don’t care. They will try to satisfy you but if they can’t, they won’t stay up all night crying.

    RE: “As I noted, I’ve done deals that have a lot more money on the line than there is with any new car purchase.”

    Good for you.

    RE: “Yet those transactions don’t include the degree of underhandedness that one finds in car sales.”

    You make blanket accusations not backed up with data, only the opinion of this concentrated haven of whiners, with a few obvious exceptions. Try to buy a business without negotiation.

    RE: “Car sales are the way that they are because (a) buyers are generally not knowledgable and (b) the tactics used by car dealers are far more onfrontational than what’s typical in other business transactions, which leaves many buyers unprepared.”

    Arbitrary at best. So what?

    RE: “Car dealers exploit the buyer’s ignorance to degrees that other retailers do not, and then make it more difficult by mixing in aggression in order to throw the buyer off balance.”

    Maybe car buyers as a group are more ignorant than those doing business in other industries. Again, so what. Sellers have strategies. So do buyers. Some time it is feigning ignorance. Sometimes it is feigning knowledge. Sometimes it is feigning “dissatisfaction,” “anger,” “hurt feelings,” false numbers and misrepresented trade ins. Sellers aren’t supposed to have their own strategies?

    RE: “I understand why you do it.”

    If you’ve never made an investment in your own business where you have employees, inventory, bankers to keep happy, an OEM to keep happy, etc. etc. you probably haven’t a clue.

    RE “Personally, I have no problems dealing with it.”

    You shouldn’t. Its the people who pay a higher profit that enables a dealer to take your own cheap deals. Maybe YOU are the problem.

    RE: “But it is nasty by design, and it is understandable that many people don’t like it.”

    If a negotiation takes place, and neither party gets their feathers ruffled, money was left on the table.

    RE: “If you can’t understand why people loathe car dealers, then you’re just out of touch, as it should be very obvious.”

    YOU say people loathe car dealers. I know different. What they say and what they mean are two different things. But what if a small group DOES loathe car dealers. So what. There will always be whiners.

    • 0 avatar
      Pch101

      “If you’ve never made an investment in your own business where you have employees, inventory, bankers to keep happy, an OEM to keep happy, etc. etc. you probably haven’t a clue.”

      Spare me. I have my own business now. I’ve dealt with nine-figure asset portfolios. I have an MBA from a top school. Your business is quite easy to figure out, there’s really no mystery to it at all.

      You guys act the way that you do because the customers’ willingness to pay varies quite a bit. Some will pay only a little, while others will pay very high prices. The opportunity to dramatically adjust the profit margin provides your brethren with incentives to figure who is who, and to be nasty about it when you believe it to be necessary.

      The problem is compounded by the fact that the sales staff are usually not particularly sophisticated themselves. They get caught up in the clique of bad suits and cheesy ties, which creates a feedback loop that supports and rationalizes cutthroat behavior. You believe that customers deserve whatever they get, and want to make them as deserving as possible. You feel entitled to treat people badly, and you do.

  • avatar

    RE: “Author: Les
    Comment:
    You certainly sound like a fan of her’s.”

    You’d have a problem with that? BTW, she ended her life taking both Medicare and Social Security under an assumed name. She mentored Alan Greenspan.

    BTW, if a consumer wants a nanny when buying a car, I encourage them to hire an agent to represent them. We have folks in this discussion group anxious to help, probably for a fee.

    • 0 avatar
      Les

      You do seem to share Objectivism’s ‘[Explitive Delete] You, I’ve got mine and you little people can [Explitive Delete].’

      What part of me not being involved in ‘Business’ as you describe it disqualifies me from complaining when my experiences with car dealers leads me to believe they are full-on thieves and scoundrels? I did my homework, did some legwork (and had to fend-off lots of aggressive salespeople during the legwork portion… I would have appreciated knowing beforehand that you NEVER give the salesman any contact info until and unless you are about to sign on the dotted line of a purchase or lease, knowing that would’ve helped me avoid being called twice a day every day for a solid week being asked when I was ready to close a deal on a car on the lot I’d made the mistake of calling ‘pretty’.) and all the maths added up that I could have had a car that filled my needs AND allowed the dealer to make a profit with an out-of-pocket sum of $5000.

      Everything said that a reasonable deal was to be had at $5000, this was not an arbitrary sum I just pulled out of my [Expletive Delete], this took time and effort and ultimately I was proven right.. But all the other dealerships previously insisted I was wrong.

      One dealership insisted they couldn’t make a reasonable deal for anything less than $1000 above my limit, and when I with some reluctance re-jiggered my budget to come up to their price they then out of the blue raised their price to $3500 above my original limit and implied that if I didn’t take that deal right then (even though I made it plain how difficult it had been for me to bring myself up to their last price) they would simply raise the price again next time I darkened their door. I haven’t been to that dealership since.

      The general feeling I got was that the dealership felt it was more entitled to my money than I was, and that I was the [Expletive Delete] for insisting on a reasonable price.

      The next dealership, I was faced with rank incompetance. After repeatedly stressing how important coming in on budget was for me I was assured that they could do that, no trouble at all. Then when it came to finding the car I was looking for through the network and it came about a feature I considered vital wasn’t included in the original description they were looking for, they (again, this was after I stressed that coming in under budget was vital and going over was a definite deal-breaker) then informed me it wasn’t a problem, they’d just charge me more.

      Again, I left feeling that the dealership felt it was entitled to my money and I was being a spoilsport for not casually tossing my budget estimates out the window when they felt it was inconvenient to their closing the deal.

      Third dealership, I’d heard about it but had never seen it before, I even had to go on Google Maps to find the town it was located in. After some correspondence I was told I could have a deal done which would come in at $2000 over my original top limit… which was exceptionally painful but within the realm of possibility, and I told the salesrep so. They told me they could possibly cut a better deal if they could get ‘eyes-on’ my trade-in and inspect it and if it looked good as much as $1000 could come off the price. I arrive bright and early, the sales people tell me in no uncertain terms their final offer is $2400 above my original top limit (after I told them even a penny more than $2000 over my limit was a deal-breaker), they never even spared so much as a glance at my trade-in before making that offer.

      Again, they seemed to think I was being the [Explitive Delete] for intruding upon their day and who was I not to take their oh-so generous (and one of the highest prices up to that point) offer right there.

      Finally, after checking Autotrader for the eleventy-fifth time more out of wistful wanting than any serious attempt to shop.. having been so demoralized I’d more or less given-up on getting a car by that point, I found someone willing to meet my original price.. which put paid to any and all claims that you couldn’t make money at the price I was asking.. though I had to lie up and down that I couldn’t pay more than $4000 and they were in crunch time for end-of-month sales before they admitted they could close on $5000.

      ruggles.. you claim to represent sales people.. you are doing a piss-poor job of this. I’ve laid out my poor experiences with people in car sales and the bad taste it’s left in my mouth and your only response is to insult me, to call me a ‘whiner’ and tell me ‘That’s business’. This does nothing to rehabilitate the reputation of the car salesman, it only makes them look even worse for having You as their advocate.

      “60 million people can’t be wrong.” No, 60 million people Need a [Expletive Delete] Car and [Expletive Delete] salespeople or no Dealerships are the only way to get a car for much of the population.

  • avatar

    RE: “Author: Pch101
    Comment:
    “If you’ve never made an investment in your own business where you have employees, inventory, bankers to keep happy, an OEM to keep happy, etc. etc. you probably haven’t a clue.”

    Spare me. I have my own business now. I’ve dealt with nine-figure asset portfolios. I have an MBA from a top school. Your business is quite easy to figure out, there’s really no mystery to it at all.”

    First, you obviously haven’t figured it out or you would know why dealers don’t care what consumers think after a certain point. As I’ve said repeatedly, you satisfy who you can with the priority being survival and ROI. Perhaps that’s not the objective of your business. You say you handle investment portfolios. Perhaps you haven’t figured out how that investment is attracted. It ain’t altruism.

    RE: “You guys act the way that you do because the customers’ willingness to pay varies quite a bit.”

    Us guys?

    RE: “Some will pay only a little, while others will pay very high prices. The opportunity to dramatically adjust the profit margin provides your brethren with incentives to figure who is who, and to be nasty about it when you believe it to be necessary.”

    Nasty? You say you are experienced, but your comments SCREAM naive.

    RE: “The problem is compounded by the fact that the sales staff are usually not particularly sophisticated themselves. They get caught up in the clique of bad suits and cheesy ties, which creates a feedback loop that supports and rationalizes cutthroat behavior.”

    You must be visiting some interesting dealerships. And you confuse anecdotes with broader trends. Visit a highline store and you’ll find the sales staff much different from a BHPH store. You’ll find the attire much different as you travel around the country. Yet, you make generalizations as if you have that experience, which it appears you don’t.

    RE: “You believe that customers deserve whatever they get, and want to make them as deserving as possible. You feel entitled to treat people badly, and you do.”

    I don’t do anything. I haven’t done hands on retail for twenty years. I feel entitled to survive and make ROI, PERIOD. I’m not a sucker for buyer negotiating strategies. I’ve had a little too much practice for that.

    WHy is it no one wants to run down the math of a car deal here? How come no one will venture out and define “fair,” “unfair,” “Abuse,” etc.? It seems no one wants to paint themselves into a corner, preferring to make baseless rhetorical over reaches.

    • 0 avatar
      Pch101

      “you would know why dealers don’t care what consumers think after a certain point.”

      You should spend more time reading and less time typing. I obviously understand why dealers are highly motivated to behave like jerks. I’ve already pointed out to others on this website that they would be better off if they would accept this for what it is and play to win, instead of expecting guys in your profession to change.

      I’m simply pointing out to you that on the other side of the table, people don’t generally enjoy dealing with jerks. They tend to complain about such people. This should not be a difficult concept to grasp, or one that requires a 1,000-word response riddled with defensiveness.

      “Visit a highline store and you’ll find the sales staff much different from a BHPH store.”

      I own a German car. Those dealers not that much different from the rest of them. A little less abrasive, but the core tactics are the same — dazzle the customer, and try to get the people who overpay to overpay.

  • avatar
    LALoser

    On a side note: I have purchased new cars in several states and a few different countries and have never found the lowlife salesman or owner. Either I am lucky, which seems strange considering how many cars in different locations; or dealers have cleaned up their act since I started buying new cars in the late seventies.
    But I do support the independent dealer network, and have looked for the small, family-type dealer just as I support small stores when possible and avoid big-box.

  • avatar

    RE: “you would know why dealers don’t care what consumers think after a certain point.”

    You should spend more time reading and less time typing. I obviously understand why dealers are highly motivated to behave like jerks. I’ve already pointed out to others on this website that they would be better off if they would accept this for what it is and play to win, instead of expecting guys in your profession to change.”

    You characterizing dealers “acting like jerks” intimates they should become patsies in negotiation. BTW, do you compare managing a portfolio of investments with actually holding and financing inventory?

    “I’m simply pointing out to you that on the other side of the table, people don’t generally enjoy dealing with jerks.”

    So let them find a dealer that isn’t a jerk based on their perceptions. HINT: Perceptions are MUCH different from consumer to consumer.

    RE: “They tend to complain about such people. This should not be a difficult concept to grasp, or one that requires a 1,000 response riddled with defensiveness.”

    There will always be whiners.

    • 0 avatar
      Pch101

      “You characterizing dealers “acting like jerks” intimates they should become patsies in negotiation.”

      You see, it doesn’t. One can be a tough negotiator without being a crude jerk about it.

      The fact that you guys can’t tell the difference illustrates the problem. You exploit the weakness of the buyer, who doesn’t know how to deal with the strongarm tactics common to car sales.

      “BTW, do you compare managing a portfolio of investments with actually holding and financing inventory?”

      Maybe I shouldn’t, as the work that I’ve done has involved bigger dollars and more sophisticated players. Car sales are child’s play in comparison.

      “So let them find a dealer that isn’t a jerk based on their perceptions.”

      All dealers use similar tactics. They can’t be avoided. I don’t personally think that it’s worth the trouble to find a “good” dealer (given that there aren’t any) — I just accept the business for what it is and manage it accordingly.

  • avatar

    RE: “Author: LALoser
    Comment:
    On a side note: I have purchased new cars in several states and a few different countries and have never found the lowlife salesman or owner. Either I am lucky, which seems strange considering how many cars in different locations; or dealers have cleaned up their act since I started buying new cars in the late seventies.
    But I do support the independent dealer network, and have looked for the small, family-type dealer just as I support small stores when possible and avoid big-box.”

    Thank you for counterpoint. Some of the group here gets to thinking that the stuff they talk about is widespread rather than anecdotal. A small group that thinks alike tends to convince themselves they are more of a factor that they are.

    I visit dealership all over the U.S. and in Japan. If I hear of anything “untoward” I immediately inform the dealer. After all, he’s the one with the most to lose if illegal and/or ineffective practices are happening in his dealerships. I teach dealers to mystery shop their own sales departments to make sure things aren’t going on that are counter productive in any way. Dealers out to make money. Anyone who thinks otherwise is naive. ROI is not a given. In fact, I have avoided any personal investment in high volume, low margin businesses for the last twenty years.

  • avatar

    RE: “The fact that you guys can’t tell the difference illustrates the problem. You exploit the weakness of the buyer, who doesn’t know how to deal with the strongarm tactics common to car sales.”

    “You guys?” As you continue with the generalities I just won’t take you seriously.

  • avatar

    RE: “Car sales are child’s play in comparison.

    Operate a car dealership successfully for a while, through a couple of business cycles, and I’ll take you seriously.

    • 0 avatar
      Pch101

      The country is full of retail businesses. They have to manage inventory, too. There’s no particular genius required for specifically managing vehicle inventories, particularly when the manufacturer is providing low-cost financing and extra incentives for the inventory that doesn’t sell well.

      In any case, your points are certainly educational, in that you amply illustrate why consumers have such a hard time dealing with auto retailers. The retailers have no empathy at all for the concerns of the customers, and will rationalize anything in the name of making a profit.

  • avatar
    racer-esq.

    Ruggles, stop it. I’m not taking the TruCoat and that’s final. I don’t care if I get oxidization problems.

  • avatar

    RE: “Author: racer-esq.
    Comment:
    Ruggles, stop it. I’m not taking the TruCoat and that’s final. I don’t care if I get oxidization problems.”

    Stop what? If you don’t want it, just say NO.

  • avatar
    DenverMike

    I’d rather buy a car/truck from a vending machine. I’d walk past the sales staff to what looks like an ATM in the lobby. I punch in the stock # and what I’m willing to pay and pull the handle. I’ll either get a buzzer and a red light or a green one and swipe my card, licence and leave a thumb print. The keys drop out at the bottom and I drive away. Done. And I’m on the road in 2 minutes.

    No, we don’t have a legal or ethical right to a good deal. And what is a “good deal” anyway? If a school teacher feels comfortable paying $25K (a little more than MSRP) for a 2014, manual/ 4cyl Accord (base EX) and she’s happy (and the dealer is definitely happy), who are we to step in and call her stupid or a victim or the dealer a scumbag?

    If the deal works for you, buy it. If not, not.

    If your time is so valuable that you and your spouse or friend (not that a spouse can’t be a friend) can’t spend a whole day (or weekend) on the internet/phone and drive some 500 miles… Just pay close to or full MSRP. Who cares? You’ve earned it, it’s your money.

  • avatar

    RE: “Author: Les
    Comment:
    You do seem to share Objectivism’s ‘[Explitive Delete] You, I’ve got mine and you little people can [Explitive Delete].\'”

    You are entitled to your opinion.

    RE: “What part of me not being involved in ‘Business’ as you describe it disqualifies me from complaining when my experiences with car dealers leads me to believe they are full-on thieves and scoundrels?”

    Nothing. You are entitled to whine, complain, answer surveys negatively, appeal to state authorities, complain to the dealer, visit Dealer Rater sites, etc. etc. etc. I never said different. Tell your story to whomever will listen.

    RE: “I did my homework, did some legwork (and had to fend-off lots of aggressive salespeople during the legwork portion… I would have appreciated knowing beforehand that you NEVER give the salesman any contact info until and unless you are about to sign on the dotted line of a purchase or lease, knowing that would’ve helped me avoid being called twice a day every day for a solid week being asked when I was ready to close a deal on a car on the lot I’d made the mistake of calling ‘pretty’.) and all the maths added up that I could have had a car that filled my needs AND allowed the dealer to make a profit with an out-of-pocket sum of $5000.”

    Live and learn.

    RE: “Everything said that a reasonable deal was to be had at $5000, this was not an arbitrary sum I just pulled out of my [Expletive Delete], this took time and effort and ultimately I was proven right.. But all the other dealerships previously insisted I was wrong.”

    So what.

    RE: “One dealership insisted they couldn’t make a reasonable deal for anything less than $1000 above my limit, and when I with some reluctance re-jiggered my budget to come up to their price they then out of the blue raised their price to $3500 above my original limit and implied that if I didn’t take that deal right then (even though I made it plain how difficult it had been for me to bring myself up to their last price) they would simply raise the price again next time I darkened their door. I haven’t been to that dealership since.”

    That’s your option. Where’s the abuse?

    RE: “The general feeling I got was that the dealership felt it was more entitled to my money than I was, and that I was the [Expletive Delete] for insisting on a reasonable price.”

    You can feel however you want.

    RE: “The next dealership, I was faced with rank incompetance. After repeatedly stressing how important coming in on budget was for me I was assured that they could do that, no trouble at all. Then when it came to finding the car I was looking for through the network and it came about a feature I considered vital wasn’t included in the original description they were looking for, they (again, this was after I stressed that coming in under budget was vital and going over was a definite deal-breaker) then informed me it wasn’t a problem, they’d just charge me more.”

    So what.

    RE: “Again, I left feeling that the dealership felt it was entitled to my money and I was being a spoilsport for not casually tossing my budget estimates out the window when they felt it was inconvenient to their closing the deal.”

    Obviously, they should tailor a deal to your budget, right?

    RE: “Third dealership, I’d heard about it but had never seen it before, I even had to go on Google Maps to find the town it was located in. After some correspondence I was told I could have a deal done which would come in at $2000 over my original top limit… which was exceptionally painful but within the realm of possibility, and I told the salesrep so. They told me they could possibly cut a better deal if they could get ‘eyes-on’ my trade-in and inspect it and if it looked good as much as $1000 could come off the price. I arrive bright and early, the sales people tell me in no uncertain terms their final offer is $2400 above my original top limit (after I told them even a penny more than $2000 over my limit was a deal-breaker), they never even spared so much as a glance at my trade-in before making that offer.”

    So what.

    RE: “Again, they seemed to think I was being the [Explitive Delete] for intruding upon their day and who was I not to take their oh-so generous (and one of the highest prices up to that point) offer right there.”

    So what.

    Finally, after checking Autotrader for the eleventy-fifth time more out of wistful wanting than any serious attempt to shop.. having been so demoralized I’d more or less given-up on getting a car by that point, I found someone willing to meet my original price.. which put paid to any and all claims that you couldn’t make money at the price I was asking.. though I had to lie up and down that I couldn’t pay more than $4000 and they were in crunch time for end-of-month sales before they admitted they could close on $5000.”

    There, the system worked for you, right?

    RE: “ruggles.. you claim to represent sales people.. you are doing a piss-poor job of this. I’ve laid out my poor experiences with people in car sales and the bad taste it’s left in my mouth and your only response is to insult me, to call me a ‘whiner’ and tell me ‘That’s business’. This does nothing to rehabilitate the reputation of the car salesman, it only makes them look even worse for having You as their advocate.”

    I’m not trying to rehabilitate the reputation of car salesmen. It is what it is. But then, you assume everyone feels like you do, which obviously is not the truth.

    RE: “60 million people can’t be wrong.” No, 60 million people Need a [Expletive Delete] Car and [Expletive Delete] salespeople or no Dealerships are the only way to get a car for much of the population.”

    I never said 60 million people can’t be wrong. I said 60 million vehicles each year are sold with the price negotiated, whether the sales were from dealers or from private sellers.

  • avatar

    RE: “Author: DenverMike
    Comment:
    I’d rather buy a car/truck from a vending machine.”

    People in hell want ice water.

    RE: “I’d walk past the sales staff to what looks like an ATM in the lobby. I punch in the stock # and what I’m willing to pay and pull the handle. I’ll either get a buzzer and a red light or a green one and swipe my card, licence and leave a thumb print. The keys drop out at the bottom and I drive away. Done. And I’m on the road in 2 minutes.”

    Good luck with that. A little naive, don’t you think?

    RE: “No, we don’t have a legal or ethical right to a good deal. And what is a “good deal” anyway?”

    I’ve been waiting for someone to define that. Instead I get emotion from people who don’t know a good deal from a bad deal.

    RE: “If a school teacher feels comfortable paying $25K (a little more than MSRP) for a 2014, manual/ 4cyl Accord (base EX) and she’s happy (and the dealer is definitely happy), who are we to step in and call her stupid or a victim or the dealer a scumbag?”

    Good point.

    RE: “If the deal works for you, buy it. If not, not.”

    Makes sense to me.

    RE: “If your time is so valuable that you and your spouse or friend (not that a spouse can’t be a friend) can’t spend a whole day (or weekend) on the internet/phone and drive some 500 miles… Just pay close to or full MSRP. Who cares? You’ve earned it, it’s your money.”

    If that’s your choice …… YOU get to choose. Isn’t it wonderful?

  • avatar
    DenverMike

    RE: “Author: Ruggles
    Comment:
    Good luck with that. A little naive, don’t you think?”

    No. NADA definitely wouldn’t sign off on it, but decades ago, no one could imagine going to a supermarket, department or hardware store, buying your goods and never waiting in line or making contact with a cashier.

    Automation is a great tool for normal retail outlets, and as a consumer, I love them. I hope to be able to buy a vehicle this way. I’m sure video stores are opposed to “REDBOX”, but convenience is everything. Just put up “DEALERBOXs” at the RITEAID or Piggly Wiggly and I’d be more inclined to by a new vehicle more often. Why does it have to be complicated? If it works for OEMs, sorry Buddy…

  • avatar

    RE: “Author: Vulpine
    Comment:
    Like I said elsewhere, I had to get corporate itself involved through a number of different means–including social media. My local Chrysler dealership has been acting a lot better since then.”

    Glad to see you’re not helpless.

    • 0 avatar
      Vulpine

      Re: “Glad to see you’re not helpless.”
      But my wife would be, if she went in without me. So are the majority of customers–especially young people and women in particular, because they are specifically targeted as ‘easy’.

  • avatar

    RE: “Author: Pch101
    Comment:
    The country is full of retail businesses. They have to manage inventory, too. There’s no particular genius required for specifically managing vehicle inventories, particularly when the manufacturer is providing low-cost financing and extra incentives for the inventory that doesn’t sell well.”

    Spoken like one who has never done it. Other retail businesses don’t have to take tradeins with balances still owed on them.

    RE: “In any case, your points are certainly educational, in that you amply illustrate why consumers have such a hard time dealing with auto retailers.”

    SOME consumers.

    RE: “They have no empathy at all for their concerns of their customers, and will rationalize anything in the name of making a profit.”

    Yes, that’s what we do. But your use of the word “NO” is over the top. If your looking for altruism, ask a dealer to donate to a cause OR go to a non profit.

    • 0 avatar
      Pch101

      “If your looking for altruism, ask a dealer to donate to a cause OR go to a non profit.”

      I don’t recall asking for altruism. But even a bit of common decency is too much to ask.

      My refrain here has been that dealers can’t be expected to be anything less than cutthroat, so they are not to be trusted. Complaining about them will do no good, since they believe that they are doing what they need to be doing.

      You’ve done a nice job of proving my point for me. This business won’t change. You don’t want it to change, nor do you see any reason that it should.

  • avatar

    RE: “Author: racer-esq.
    Comment:
    Stop not using the REPLY button. I have IE, Firefox and Chrome and the REPLY button works in all of them.”

    I use the box labeled “Leave a Reply.” Sorry if that’s not satisfactory to you. Take it up with TTAC.

    • 0 avatar

      Mr. Ruggles,

      The “Leave a Reply” box near the bottom of the page is for replying to the original post. If you’re replying to a comment, please use the “Reply” button for that individual comment. Nested comments are much easier to follow. If you aren’t seeing a Reply button, please let us know what browser and operating system you are using and we’ll pass that along to the technical staff.

      If you do see the Reply buttons and are just doing it this way because you feel like it, well, fewer people will bother to read what you have to say if you make it harder to follow a conversation. Your choice.

      You’ve obviously spent a long time working and consulting in the retail side of the car biz. One of the things that makes TTAC unique among car enthusiast sites is that many of our readers are industry insiders one way or another, Doctor Olds, for example. So your perspective is one that’s worth hearing here on TTAC.

      That being said, speaking from personal experience as someone who loves to argue, debating every little point usually doesn’t convince people to listen to me. As a very wise man who knows a lot about trucks, Paul Abelson, once told me, “people don’t care how much you know until they know how much you care”.

      Chill out, dude. You have a lot to contribute to the conversation but monopolizing a conversation is rarely a way to impress people. Instead of writing hundreds of comments, put together an editorial and submit it to Jack and Derek. I’m sure that they’ll consider publishing it.

      • 0 avatar
        Kenmore

        “people don’t care how much you know until they know how much you care”.

        Too much synchronicity!

        I just saw that for the first time yesterday as a footer on a regional director’s work e-mail. I thought it marked him as a pompous doof.

        I care greatly how much my doctor or mechanic knows and don’t expect them to care one whit about me, just about avoiding professional difficulties.

        Life is full of passionate, committed dweebs. I want smarties.

        • 0 avatar
          Les

          “I care greatly how much my doctor or mechanic knows and don’t expect them to care one whit about me, just about avoiding professional difficulties.”

          No you don’t.

          You care that they are Competent, which isn’t the same thing. You employ them in a professional capacity and expect them to do their jobs professionally, not bore you with trivia.

          This isn’t that sorta situation, this isn’t a professional setting, this is a debate which is being drowned in minutiae by a guy who’s done nothing to endear himself to anybody he’s debating With so we all pretty much don’t have any reason to care about his position…

          ….whatever his position might be, I’m having a difficult time parsing it through all the BS myself.

  • avatar

    RE: “You claim my quote gives bogus numbers. How about YOU show us what the real numbers are? Verifiable by anybody.”

    Valid numbers would be calculated from vehicles of the same age operating for the same number of miles, NOT comparing near new vehicles (Tesla) with a cross section that includes LARGE numbers of really old vehicles. But the koolaid drinkers don’t bother to think that through.

  • avatar

    RE: “No. NADA definitely wouldn’t sign off on it, but decades ago, no one could imagine going to a supermarket, department or hardware store, buying your goods and never waiting in line or making contact with a cashier.”

    Forget NADA. The OEMs wouldn’t think of undermining their dealer network. PERIOD.

    RE: “Automation is a great tool for normal retail outlets, and as a consumer, I love them. I hope to be able to buy a vehicle this way.”

    People in hell are hoping for ice water.

    RE: “I’m sure video stores are opposed to “REDBOX”, but convenience is everything. Just put up “DEALERBOXs” at the RITEAID or Piggly Wiggly and I’d be more inclined to by a new vehicle more often. Why does it have to be complicated? If it works for OEMs, sorry Buddy…”

    Sorry Buddy? You think your wild dreaming will count for anything? :)

  • avatar

    RE: “Author: Vulpine
    Comment:
    Re: ” It is what it is.”
    That’s EXACTLY the point; it doesn’t have to be.”

    Its a market. Find a dealer that pleases you.

    “Re: “And YOU miss the point of being in business.”
    The Mafia is a business too, and they use the same kinds of tactics.”

    So you say. If you want to run a dealership for altruism, feel free to buy one and do so.

    RE: “Re: “What do consumers do first chance they get? They negotiate.”
    Why, because that’s what they’ve been ‘trained’ to expect by all the previous automotive salespeople. They may have been ‘taught’ by their parents what to expect and don’t understand that it doesn’t have to be that way. However, MOST consumers walk in and expect to buy a car based on the cars’ stickers. If they negotiate at all, it’s on the trade-in value of their current vehicle.”

    You seem to think you can peek into the mind of all consumers?

    RE: “Re: “YOU say you have experience in the business. Tell us what happens when a consumer comes in and makes an offer, and the dealership says OK.”

    Why should the customer even need to make an offer? The price is CLEARLY marked on the vehicle. They only reason they would is because they think the dealer expects it. Most young people today know nothing about negotiating.”

    Just answer the question, along with the question, “What’s a fair profit.”

    RE: “Re: “If you think the real estate agent for a seller is looking out for the buyer I have some swamp land to sell you. ”
    You do realize that a lot of people are taken in by that kind of scam, don’t you? It may be cliché, but they do still get scammed.”

    So show us how to do it right if you know so much. Certainly you could make a fortune making car buyers smile, right? Think of all the repeat business. Why are you wasting your time on your current endeavor when there is so much money to be made showing the car business how to retail cars?

    RE: “Re: “And you thik you understand 4 Square?”
    Why should there even be a need for 4Square?”

    Because MOST buyers want to know the selling price, the trade allowance, and the down payment to get to a particular payment, that’s why.

    • 0 avatar
      Vulpine

      * Its a market. Find a dealer that pleases you.
      Hard to do when they all act alike.

      * So you say. If you want to run a dealership for altruism, feel free to buy one and do so.
      Fine. How about being altruistic and give me the cash to do so?
      Since I already know you’re going to refuse, you make my point for me; you have to have money to make money so the people who WANT to make a difference have to have that money first. Tesla is one of the few who can afford it and he made his money through many other ways than selling cars.

      * You seem to think you can peek into the mind of all consumers?
      Since my clientele consists of consumers, I think I have a good feeling of what they think.

      * Just answer the question, along with the question, “What’s a fair profit.”
      Already answered, by me, at least twice below.

      * So show us how to do it right if you know so much. Certainly you could make a fortune making car buyers smile, right?
      I have sold cars at ‘traditional’ dealerships and quite honestly I quit because I’m too honest. I couldn’t see screwing a customer by selling a vehicle for 50% above dealer invoice and more than 30% above MSRP. You see, as a salesperson I got to see the invoice, the MSRP AND the sticker. I might not make a fortune if I owned a dealership, but I’d probably sell more cars and have happier customers. And maybe, just maybe, I’d make enough profits on sales and service that I’d get rich enough.

      * Because MOST buyers want to know the selling price, the trade allowance, and the down payment to get to a particular payment, that’s why.
      With no trade allowance, there goes one square. The selling price is on the sticker, so there goes another. Down payment is determined by how much the finance company is willing to cover. That finance company does not necessarily have to be contracted to the dealership. So there goes the third one. The fourth one is handled by that finance company. The sales staff shouldn’t even have a need to know.

  • avatar

    RE: “Re: “Glad to see you’re not helpless.”
    But my wife would be, if she went in without me. So are the majority of customers–especially young people and women in particular, because they are specifically targeted as ‘easy’.”

    So go with her or hire an agent. OR go to the FTC and get the OK for price fixing AFTER you determine what a fair profit is. Tell us, what IS A FAIR PROFIT.

    • 0 avatar
      Vulpine

      * “So go with her or hire an agent.”
      And where do I find an agent? Or don’t you realize 90% of car buyers have never even heard of a buying agent and what few who do think said agents work for the dealers?

  • avatar

    RE: “I don’t recall asking for altruism. But even a bit of common decency is too much to ask.”

    FOR CHRIST SAKES, DEFINE SOME OF THESE TERMS ONCE!

    RE: “My refrain here has been that dealers can’t be expected to be anything less than cutthroat, so they are not to be trusted.”

    So don’t trust them. SHOP!

    RE: “Complaining about them will do no good, since they believe that they are doing what they need to be doing.”

    Yes, they need to survive and make ROI.

    RE: “You’ve done a nice job of proving my point for me. This business won’t change. You don’t want it to, nor do you see any reason that it should.”

    I’m not a spokesman for the business. I’ve been a participant and a close observer. And the business changes everyday. I’ve lived 4 decades of it.

    • 0 avatar
      Vulpine

      * FOR CHRIST SAKES, DEFINE SOME OF THESE TERMS ONCE!
      You know the definitions as well as we do; you just don’t want to admit it.

      * So don’t trust them. SHOP!
      How can you SHOP when all the dealers are the same? The mom and pop type dealership is the exception, not the rule.

      * Yes, they need to survive and make ROI.
      ROI doesn’t have to mean 50%-100% profits. Any profit is ROI and the MSRP allows for ‘fair’ profits.

      * I’m not a spokesman for the business. I’ve been a participant and a close observer. And the business changes everyday. I’ve lived 4 decades of it.
      Your own arguments and your own statements have made it clear that you represent the dealers’ interest far more than they represent the buyers’.

    • 0 avatar
      Pch101

      If I have to explain to you what common decency is, then I can see why we’re having a problem.

      As I’ve told you before, the issue for buyers is that they feel manipulated. That’s probably because they are being manipulated. Numbers and terms are used not to clarify what the deal is about, but to confuse the purchaser. The most profitable car sales usually involve a buyer who signs the papers without really understanding what it is that he just did.

      Car dealers don’t really want buyers to understand the transaction. It’s easier to extract money, provide bad loan terms, and steal trades if the consumer doesn’t really know what’s going on. The dissatisfaction comes from figuring out after the fact that they’ve been taken.

      “Amazing to me is that no one here will volunteer to define what a “fair deal” is.”

      For the purposes of this discussion, a fair deal is one that doesn’t exploit the ignorance of the buyer. Using numbers to confuse people probably doesn’t fall under the “fair deal” category.

    • 0 avatar
      Les

      “So don’t trust them. SHOP!”

      I shopped, and got bupkiss. I got the deal I did by blind luck.

  • avatar

    Amazing to me is that no one here will volunteer to define what a “fair deal” is. Yet, you feel entitled to use inflammatory terms without a clue as to what an objective standard might be. If someone wants to actually define a “fair deal” with real numbers or percentages I’ll be glad to engage. Otherwise, continue this pathetic exercise in mutual admiration and reinforcement based on emotion and no numbers.

    • 0 avatar
      Vulpine

      Re: Amazing to me is that no one here will volunteer to define what a “fair deal” is.

      Fair is Fair. How about selling the vehicle AT the MSRP instead of jacking it up $3K, $5K, maybe even $10K or more? The MSRP still allows for between 10% to 20% dealer profit.

  • avatar
    racer-esq.

    TTAC – Please ban, or at least warn, users that repeatedly fail to use the reply button to reply to individual comments, as opposed to the original post. It makes an absolute clusterf*ck out of the comments section. Right now there is only one user I can think of, but if any others pop up the same request applies.

    I am the absolute LAST person that would ask for anyone to be banned based on content. But this is, in 1st Amendment terminology, a content neutral request.

  • avatar

    So no definition or numbers. Just more mutual reinforcement?

    • 0 avatar
      Vulpine

      * “So no definition or numbers. Just more mutual reinforcement?”
      May I ask what this is in response of? By not using the “REPLY” button, this comment makes no sense because it has no reference for relevance.

    • 0 avatar
      DenverMike

      @Ruggles – Fair deal? Depends.

      🌝 How long has it been sitting on the lot?

      🌝 Is it a new model or outgoing?

      🌝 Supply/demand?

      🌝 Popular options/color?

      🌝 Incentives?

      🌝 Free maintenance?

      🌝 Free bedliner, floomats or other goodies?

      It’s like negotiating for anything. Too many variables. But the current national average (transaction) is a good place to start. Then take 15% off. I could live with that, without knowing anything else.

  • avatar

    Down the line

    RE: “Author: Vulpine
    Comment:
    * FOR CHRIST SAKES, DEFINE SOME OF THESE TERMS ONCE!
    You know the definitions as well as we do; you just don’t want to admit it.”

    False

    RE: “* So don’t trust them. SHOP!
    How can you SHOP when all the dealers are the same? The mom and pop type dealership is the exception, not the rule.”

    False

    RE: “* Yes, they need to survive and make ROI.
    ROI doesn’t have to mean 50%-100% profits. Any profit is ROI and the MSRP allows for ‘fair’ profits.”

    The MSRP DOES provide for fair profits. How kind of you.

    RE: “* I’m not a spokesman for the business. I’ve been a participant and a close observer. And the business changes everyday. I’ve lived 4 decades of it.
    Your own arguments and your own statements have made it clear that you represent the dealers’ interest far more than they represent the buyers’.”

    I represent facts. Opinion and emotion about things you don’t understand are not facts.

  • avatar

    RE: “You see, as a salesperson I got to see the invoice, the MSRP AND the sticker.”

    WOW. The MSRP AND the sticker?

    RE:”I might not make a fortune if I owned a dealership, but I’d probably sell more cars and have happier customers. And maybe, just maybe, I’d make enough profits on sales and service that I’d get rich enough.”

    You just voiced the sentiments of EVERY new salesperson who comes into the business. I now understand why you didn’t last. You never wised up. You must be one of those sales people who believed the customer because you liked them and never learned to separate the relationship from the business end of things.

    If investment money comes too easy, you tend to be careless with it. Earn, scrape, save, invest, then sign personally. Then lets see how far your altruism goes. There is a REALLY fine line between success and failure in the auto retail business.

  • avatar

    All this crap about dealers adding stuff on is ridiculous. Just say NO. How hard is that. WALK if you need to. You don’t even have to be nice about it. I STILL can’t understand how this group here got to be so helpless.

  • avatar

    Now for basic accounting exercise. Is there ANYONE here who thinks a 10% gross profit on a car deal, front and rear, is unfair?

    Anyone? If you don’t understand the term “gross profit,” don’t be shy. We’ll explain it to you.

    • 0 avatar
      Vulpine

      Don’t you mean NET profit? That’s the MINIMUM profit most dealerships make.

    • 0 avatar
      ajla

      “Is there ANYONE here who thinks a 10% gross profit on a car deal, front and rear, is unfair?”

      I don’t assign “fairness” to a dealer’s gross profit under the current sales system. No car dealer is entitled to a profit, I don’t care how much investment they have made.

      The only thing that matters is that they meet the figures I want. If that gives them 30% or 1% GP, I don’t care.

  • avatar

    RE: “If I have to explain to you what common decency is, then I can see why we’re having a problem.”

    We need definitions. If you think making a $3K gross profit on a $30K vehicle lacks common decency, its no wonder there is a problem. Why are you afraid to quantify your terms?

    • 0 avatar
      Pch101

      Do you actually read the comments to which you are responding?

      I already addressed your point. I’ll copy and paste it, just in case you are as bad at scrolling up as you are at using the “reply” button:

      As I’ve told you before, the issue for buyers is that they feel manipulated. That’s probably because they are being manipulated. Numbers and terms are used not to clarify what the deal is about, but to confuse the purchaser. The most profitable car sales usually involve a buyer who signs the papers without really understanding what it is that he just did.

      Car dealers don’t really want buyers to understand the transaction. It’s easier to extract money, provide bad loan terms, and steal trades if the consumer doesn’t really know what’s going on. The dissatisfaction comes from figuring out after the fact that they’ve been taken.

      “Amazing to me is that no one here will volunteer to define what a “fair deal” is.”

      For the purposes of this discussion, a fair deal is one that doesn’t exploit the ignorance of the buyer. Using numbers to confuse people probably doesn’t fall under the “fair deal” category.

  • avatar

    RE: “You have shown good reasoning and excellent understanding of the subject. I read most of your posts here, but may have missed something. Can you explain why dealers are better for the consumer than buying direct?”

    It makes no difference because buying direct from the factory isn’t an option and won’t be any time soon. You can create this mythical and theoretical world of how it would be so great, but when you don’t understand the issues your theory leaves out important elements you don’t think of because you don’t understand the issues and challenges.

    RE: “My experience is that I have been able to get great deals from dealers. What has baffled me is how they manage to waste so much of my time and eventually have me pissed off.”

    If a business negotiation takes place, and neither party gets their feathers ruffled, someone left money on the table.

    • 0 avatar
      Vulpine

      * “It makes no difference because buying direct from the factory isn’t an option and won’t be any time soon.”
      And again you ignore the fact that you’re wrong on at least one count as buying direct from the factory IS an option–in fact for the moment the ONLY way you can buy a Tesla. And it’s working well enough that Tesla has already sold tens of thousands of cars–of two different models–without ruffling the feathers of their customers. In fact, I know of only a very, very few Tesla owners who have made any complaint at all about their buying process or the vehicles themselves. Tesla’s customer satisfaction rate is the highest in the industry–barring the fact that analysts like JD Power haven’t even looked at Tesla or consider them too niche, at least for now.

      The clear point here is that direct sales does work and only this morning discovered that GM is looking into a direct online sales system apparently as a result of Tesla’s success. While they’re not abandoning the dealership network as yet, it appears even GM recognizes that some customers flat-out know what they want and simply don’t want to go through the hassles of the typical dealer experience. Not only that, but if they sell the car at MSRP rather than at dealer invoice, the manufacturer realizes much higher “gross profit” per vehicle than selling through a middleman.

      Meanwhile, most of us already know that the majority of a dealership’s profits don’t come from auto sales but rather through factory-authorized auto service. At a currently-typical $90/hour for labor, even if the mechanic is personally making $20/hour, there is enough profit per week to pretty much cover all other expenses in operating the dealership. Assuming as a rough example that a dealership has 15 bays open a mere 10 hours per day, that’s $13,500 per day coming in 5 days a week, 52 weeks a year not counting holidays. That’s over $3 million per year gross income–not even considering profits on parts or car sales. Sure, overhead will come out of that, but it still adds up to a probable $1million+ net profits before any sales are included. And before you mention that such a number is unsustainable, I might note that with all the dealerships in my area, I have NEVER seen even one bay empty in their service departments for more than the time it takes to move one vehicle out and another in. My local Chrysler dealership has even stacked models right outside some bay doors so the mechanic can work on another vehicle while awaiting parts for the one inside.

      Since all of us know that any car will need service multiple times through its lifetime, direct sales of cars by the manufacturer would have almost no impact on the dealership’s core business while potentially increasing the real profits by simply having more of that brand’s models on the road needing services. Making your customer happy with their service ensures repeat business.

  • avatar

    RE: “you can’t say, “no” when the task is already done.”

    Laughable. Just say NO and walk if need be. Order one without the stuff. I can’t believe this has to be explained.

    I sometimes visit ten dealerships a week. I can assure you they aren’t all the same.

    I thought participants here would be at least somewhat web savvy. No one knows about YELP, DealerRater, PissedOff.com, and the host of other Internet tools that allow consumers to sound off? As a group, this seems to be a pretty computer illiterate bunch. No one in this group has ever received a survey to fill out from an OEM or JD Power? There is a new level of accountability in dealer land, for better or worse. A bunch of pissed off consumers could literally bury a dealer. Consumers have NEVER had things better than they do right now. But here we find a covey of whiners.

    • 0 avatar
      Vulpine

      * “… But here we find a covey of whiners.”
      Based on your own commentary, I would think you’d consider all these other sites as “a covey of whiners.” After all, they have no overall interest in the automotive industry. The people here are automotive enthusiasts and in most cases have at least some idea of what the industry is all about, even if they don’t agree with your conclusions. We’re the ones who hope to have some influence (and in some cases have) on the industry other than just saying, “XXXX brand is crap” the way most of those sites you mentioned get filled.

      Sure, some of us are hard-core fans of one brand or another. Some even do go as far as throwing a smattering of that ‘fanboi’ language; but we have all at least been trying to maintain a reasonable debate without using personal attacks the way you have. (Just because I don’t respond to every one of your comments doesn’t mean I don’t read them. I’m not a victim the way you have implied, but I AM trying to make things easier for the true victims–the ones who tend to be grossly manipulated by abusive dealerships.)

      For that matter, I do remember “industry analysts” coming through dealerships and hearing the managers say things like “be on your best behavior while they’re here.” You may simply not know what’s going on behind the scenes at the places you visit. Long-term exposure to a given dealership is what gives you the chance to see how things are really done. While I know you’re going to consider this as totally irrelevant, I’d suggest you watch that reality program about “secret diners” where business analysts go in without the knowledge of the restaurant manager. Almost invariably they discover underhanded tricks being used to increase and siphon profits and abuse customers. I’m not saying the actual tactics are relevant, only that in every case it takes extended observation to discover these things.

      That said, you continue to harp on “just shop around”, flat-out ignoring the repeated statements that:
      1.) If the buyer wants a specific brand, shopping around may mean having to drive 50 to 100 miles or more away from home just to get to a different dealership carrying that brand.
      2.) If they buyer doesn’t care about any given brand, he may still need to drive excess miles just to shop a different dealership owner as one person or corporation may own an entire string of dealerships in the buyer’s locality–meaning every one of them will be run effectively identically. I’ve clearly pointed out that where I live, one owner operates two Ford dealerships 15 miles apart in my county. Another owner operates three separate brand dealerships also in one county. The next county over has a single owner operating dealerships for seven different brands in one strip of road and three more about 10 miles away.

      In other words, shopping around for a different dealership (one that’s run differently) is nearly impossible in some cases. Which directly argues your statement of, “I sometimes visit ten dealerships a week. I can assure you they aren’t all the same,” as demonstrating that you don’t stay at any one dealership long enough to know HOW it is run; you’re just there to teach them (offer advice). They may adopt your suggestions or they may not. How do YOU know once you’ve left? We, as customers, have to live with these dealerships in our neighborhoods and have long-term exposure to their methods. Also, as I have said before, I did manage to effect some change at one dealership for the better and that dealership is now realizing better sales and repeat business compared to even last year when they were driving customers away.

      Yes, I also said I used Social Media–of which Yelp and those other sites you mentioned are but small examples. However, the sites you mention are great for talking to other consumers but don’t have much, or any, affect on the business side of the products involved. Certain other sites are frequently monitored by the manufacturers themselves and commentary THERE tends to result in relatively rapid and direct action. As we have already seen from other TTAC articles, manufacturers tend to pay more attention to automotive blogs than they do to sites like Yelp.

  • avatar

    I mean GROSS PROFIT on a single car deal, based on a $30K vehicle.

  • avatar

    RE: Author: DenverMike
    Comment:
    @Ruggles – Fair deal? Depends.

    🌝 How long has it been sitting on the lot?

    NO

    🌝 Is it a new model or outgoing?

    NO

    🌝 Supply/demand?

    NO

    🌝 Popular options/color?

    NO

    🌝 Incentives?

    NO

    🌝 Free maintenance?

    NO

    🌝 Free bedliner, floomats or other goodies?

    NO

    AVERAGE GROSS PROFIT. AVERAGE!!!!

    It’s like negotiating for anything. Too many variables. But the current national average (transaction) is a good place to start. Then take 15% off. I could live with that, without knowing anything else.

  • avatar

    RE: “I already addressed your point. I’ll copy and paste it, just in case you are as bad at scrolling up as you are at using the “reply” button:”

    Which point. I use the Reply Box. It HAS a button.

    RE: “As I’ve told you before, the issue for buyers is that they feel manipulated.”

    And that get fixed HOW? This thread is a perfect example. The people here don’t even seem to know what constitutes a “fair deal.”

    And YOU think the most important thing is for the consumer to feel they weren’t manipulated. They probably had to be manipulated to get them up to a fair deal. So what. You really have strange priorities for a self described business person.

  • avatar

    @ PCH101 RE: “I’ve addressed that point. You can disagree with it if you like, but don’t pretend that I didn’t answer you.”

    Do you or do you not agree that an AVERAGE gross profit of $3K is “fair and reasonable on a $30K vehicle?

  • avatar

    RE: “Author: ajla
    Comment:
    “Is there ANYONE here who thinks a 10% gross profit on a car deal, front and rear, is unfair?”

    I don’t assign “fairness” to a dealer’s gross profit under the current sales system. No car dealer is entitled to a profit, I don’t care how much investment they have made.”

    The question is, is $3K fair?

    RE: “The only thing that matters is that they meet the figures I want. If that gives them 30% or 1% GP, I don’t care.”

    If this doesn’t prove my point, nothing does.

  • avatar

    RE: “Author: ajla
    Comment:
    He seems to want a number like “8% gross profit for the dealer is a fair deal”.”

    Christ! AVERAGE! Is there something unclear about this?

    • 0 avatar
      ajla

      Yes, like why should a consumer care about a dealer’s average gross profit in the first place?

      It’s the dealer’s job to make a profit. It is my pleasure to purchase a vehicle. I care as much about their average GP as they care about me getting the vehicle under MSRP.

      If people are cutting into that average GP enough that dealers need to go whine about Carfax ads and TrueCar then good for us.

  • avatar

    Foaming? Actually, I’m getting ready to go to bed.

  • avatar

    RE: “I wasn’t referring to a specific spread. I was referring to the tactics.”

    One thing at a time All dealers don’t use the same tactics. But they ALL operate on the same business principles.

    10% gross profit, or not? Fair or not?

    • 0 avatar
      Pch101

      “All dealers don’t use the same tactics”

      They’re all similar enough for the purposes of this discussion. Variations of the command-and-control approach — yes, I know that you are baffled that such a thing exists — are the norm.

      “10% gross profit, or not? Fair or not?”

      Neither. Your question is irrelevant.

      Ironically, your fixation on the spread (i.e. the subject that I wasn’t discussing) shows your own use of command and control. You want to redirect my comments to something that I never mentioned, while you obfuscate, disregard my points and pretend that I didn’t answer you.

      Once again, I’m not talking about specific spreads, so don’t bring that up with me again — I won’t answer that question. What I’m talking about are the tactics that are used to confuse the customer so that he or she doesn’t understand the deal. This happens, and if you have experience in this business, then you damned well know that it happens.

      If you wish to reply to this comment, then click on the gray “Reply” box in the bottom right-hand corner of this post. If you know how to work a four square, then you can surely figure that out.

  • avatar

    RE: “Yes, like why should a consumer care about a dealer’s average gross profit in the first place?”

    The question pertains to the definition of a “fair deal.”

    RE: “It’s the dealer’s job to make a profit”

    Really.

    RE: “I care as much about their GP as they care about me getting the vehicle under MSRP.”

    But you feel free to throw terms like “unfair” around?

    RE: “If people are cutting into that average GP enough that dealers need to go whine about Carfax ads and TrueCar then good for us.”

    Like I’ve said. The consumer has NEVER had it so good. When have dealers whined about TrueCar ads?

    • 0 avatar

      I don’t know if dealers have whined about TrueCar ads, but we recently reported on a Federal Trade Commission investigation into dealers’ possible collusion concerning TrueCar. Innocent until proven guilty and all that, but it’s clear that dealers weren’t thrilled with some of TrueCar’s policies.

      http://www.thetruthaboutcars.com/2013/09/ftc-launches-investigation-whether-car-dealers-colluded-against-truecar/

  • avatar
    ajla

    @Ruggles:

    “But you feel free to throw terms like “unfair” around?”

    Feel free to find where I’ve used the term “unfair”.

    “Like I’ve said. The consumer has NEVER had it so good. When have dealers whined about TrueCar ads?”

    I said “Carfax ads and TrueCar”, not “TrueCar ads”. You have written plenty on your blog and at Ward’s about dealers not liking TrueCar.
    ________________________
    (Sorry for missing the reply button).

  • avatar

    RE: “”But you feel free to throw terms like “unfair” around?”

    Feel free to find where I’ve used the term “unfair”.”

    I AM having trouble keeping up with the barrage from this crew, plus the three other discussions I’ve been following today. What’s YOUR beef?

    RE: “”Like I’ve said. The consumer has NEVER had it so good. When have dealers whined about TrueCar ads?”

    I said “Carfax ads and TrueCar”, not “TrueCar ads”. You have written plenty on your blog and at Ward’s about dealers not liking TrueCar.”

    I doubt you even understands the issues. Do you even know what a DMS is? Do you understand that TrueCar gets its revenue from dealers? Who did you think funds them?

    The Carfax issue is completely different and is currently under litigation.

  • avatar

    Mr. Ruggles,

    Based on your extensive knowledge of the retail car business, what are your recommendations to consumers on how they can get the best possible deal on a new car?

  • avatar

    RE: “I don’t know if dealers have whined about TrueCar ads, but we recently reported on a Federal Trade Commission investigation into dealers’ possible collusion concerning TrueCar. Innocent until proven guilty and all that, but it’s clear that dealers weren’t thrilled with some of TrueCar’s policies.”

    Whined? More like withdrew their support when their so called partner was caught backstabbing them. TrueCar lost about $78 million last year before they changed their policies, but they just came up with a new one that got things fired up again. The FTC issue has to do with whether or not dealers conspired and colluded to put TrueCar out of business. Dealers DID, in fact, compare notes to see if other dealers were having a similar experience.

  • avatar

    @ Mr. Schreiber – Mr. Ruggles,

    RE: “Based on your extensive knowledge of the retail car business, what are your recommendations to consumers on how they can get the best possible deal on a new car?”

    Thanks for the respectful question. My advice is to shop. Know your credit score. If you can get preapproved for a car loan, do so. Be prepared, however, for the fact that the manufacturer may have an artificially low interest available. If they do, it will probably be in place of a rebate of some kind. There probably won’t be a rebate if you want to buy an “import.” Weigh any available rebate against the interest on a market rate loan. Only 720 credit scores and up qualify for the cheapest interest rates these days. IF you want a service contract, remember that if you finance it in with zero percent, your getting cheap money on the service contract too. If you are over 50 you might want to consider credit life insurance. You pay a rate, in most states, the same as a twenty year old. AND it gets financed at ZERO percent if that’s what the car loan is. Some people try to finance as much as they can at ZERO percent. But I’d see if any available rebate has more value first. Leasing can be a great way to get bang for the buck, but it isn’t for everyone. But its like buying an option. You lease for 36 months. If the car isn’t worth the residual value at end of term, you walk away. If it is worth more, you might be able to make a profit. Some credit unions offer balloon financing. It depends on how important the payment is to you. If you pay cash, none of this stuff matters, although I know a lot of wealthy people who prepay balloons and lease contracts, then decide what to do at end of term.

    There are many resources available these days. What isn’t well available is the understanding on the part of consumers to interpret that information. email me at ruggles@msn.com and I’ll answer more specific questions. But remember, if you get a deal better than the average, the dealer will make it up on “vulpine” and his buddies. :)

    • 0 avatar
      mcs

      >> RE: “Based on your extensive knowledge of the retail car business

      That’s good advice. I’ve done the lease pre-pay option in the past and it worked out well. The pre-pay amount was less than what the total number of would have been.

      Ronnie, I think he’d be an interesting addition to TTAC. We just need to work on that reply button thing :^)

  • avatar

    RE: “Pch101
    Comment:
    “All dealers don’t use the same tactics”

    They’re all similar enough for the purposes of this discussion. Variations of the command-and-control approach — yes, I know that you are baffled that such a thing exists — are the norm.”

    No they aren’t. I guarantee I’m in a LOT more dealerships in a week than you, and have been for decades. Like I said, the business principles are the same.

    RE: “10% gross profit, or not? Fair or not?”

    Neither. Your question is irrelevant.”

    Why are you afraid to offer up a definition or quantification? Are you afraid your ignorance will show?

    RE: “Ironically, your fixation on the spread (i.e. the subject that I wasn’t discussing) shows your own use of command and control.”

    This is a discussion with a group, not a single person.

    RE: “What I’m talking about are the tactics that are used to confuse the customer so that he or she doesn’t understand the deal. This happens, and if you have experience in this business, then you damned well know that it happens.”

    Again, why don’t YOU teach us the proper tactics to achieve a FAIR gross profit? You seem to think you’re smarter than all of the 16K dealers out there, right? Teach us all. I’m sure it will be revolutionary and I’ll anxious to hear it. I’ll then want to know how you know it would work. You’ve seen some of the brain dead comments here. Go for it. Satisfy customers while surviving and making ROI. The industry is waiting to hear about it.

    • 0 avatar
      Pch101

      All this time, and you still can’t work the “reply” button? Seriously, give it a shot.

      Your gross margin question is wholly irrelevant to what I’m discussing. In the future, I will ignore it.

      Let’s focus on the tactics that are used to confuse buyers. Most of the readers here will have experienced variations of these, sometimes including the use of the four square and a barrage of numbers that are meant to confuse the customer.

      People dislike that sort of thing. If you are going to deny that this happens, then I’ll dismiss you as a liar and move on. But if you acknowledge it, then you should also recognize that it is a deliberate effort to confuse the customer. Not negotiate, but to confuse.

      In a fair negotiation, both sides come away from it understanding what the terms are. In car sales, the buyer often has only a vague understanding of what happened, because different numbers are moved simultaneously in an effort to confuse the terms of the deal. It’s the deliberate effort to confuse the buyer that is unfair.

  • avatar

    RE: “Author: Les
    Comment:
    “So don’t trust them. SHOP!”

    I shopped, and got bupkiss. I got the deal I did by blind luck.”

    I’d rather be lucky than good. How about you? If you shopped and didn’t get what you wanted, perhaps what you wanted wasn’t reasonable.

    • 0 avatar
      Les

      Everything that wasn’t a local dealership told me the deal I wanted was reasonable.

      KBB.com and Edmunds.com all valued my trade at around $14,000 wholesale, $16,000 Retail.

      The build-and-price tools at Car-and-Driver, Cars.com, Truecar and Chrysler’s own website all told me that the car I wanted with the options I wanted would MSRP for around $18,000.

      Everything I’d learned about negotiating and shopping for cars from online sources including Consumer Reports and this very website told me that MSRP already includes a ‘fair’ profit margin, and that Dealers can furthermore make at least some profit even going below Invoice.

      Mathematically, everything said that $5,000 difference (Cash deal, no financing) could not possibly be anything but reasonable.

      Then I went to the nearest dealership, they went through my trade-in top to bottom and told me they could make a deal at $7,500. I told them I could only go up to $5,000 and they came back and swore up and down they couldn’t possibly go below $6,000. I left, re-thought my finances, found what corners I’d have to cut in my lifestyle to make it happen and came back saying I could meet $6,000. They came back and told me after ONE WEEK’S worth of depreciation on my trade-in they could only make the deal work at $8,500 and this time they were standing firm at that price.

      Not once did they actually tell me what number they were assuming my trade was worth, and they as much as said if I left to try and re-work my finances again the price would only be even higher next time they saw me if I didn’t sign on the dotted line right then and there.

      I got the impression that they assumed I was loaded and was just trying to negotiate out of habit and not a genuine need to save money, and it was more important to them to shake me down (Yes, it actually did feel like a shakedown) for as much as they could get than to ensure they hadn’t soured me to their dealership and spread word of how they’d soured me around town.

      Second dealership, meh.. the general impression I got from them I can’t tell if they were trying to cheat me or were just genuinely incompetent.

      Third dealership, I was told I could expect an out-the-door price of $7,000. I replied that any lower than that I’d be more willing to sign, but I absolutely would walk at even a penny over $7,000. I made sure they understood this, and they indicated that they did and it would be no problem, and that in all likelyhood if I came in-person with my trade they could possibly come in under $7,000 if they liked what they saw.

      I went out of my way to drive down bright and early to show them my trade. They brought me into the back office and had me sit there for half an hour, then came back with a ‘take-it-or-leave-it’ price of $7,400.. I know it’s ‘only’ 400 over but I was quite firm and had been given to understand that they knew I meant that. They also not once looked at my trade-in, not so much as a glance at it sitting out there in front of the building.. them inspecting my trade-in being what I had been told was the entire point of me coming to talk to them that morning.

      This was all happening over my First choice of car, which MSRP’d for around $18,000. I had a Second choice in mind that would’ve cost $16,000 not counting my trade-in which had almost everything my first choice had, but it had more limited availability and it was lost to the aether while I was being jerked around by salesmen who kept jerking me around dangling figures they knew they weren’t going to honor in front of my face rather than just telling me outright, “I’m sorry sir but we just can’t meet your price.”

      I’d been shopping for cars over the course of several months, and had gotten into the habit of trawling Autotrader for fits-and-shiggles purely for entertainment. At this point I’d pretty-much given-up and was surprised that by happenstance a search had found Exactly the same car that the first dealership swore couldn’t be had for anything under $3500 above my price-point. I contacted that dealership, almost three times as far away from me as the next farthest one I’d contacted. They said $5,000 was no problem based on my description of my trade-in over the internet and could I be there that night? I could.

      I drove up there, they greeted me. I inspected the car and saw that it was good. I wrote a check for $5,000, swapped keys, and that was it.

      Tell me again how what I wanted was unreasonable.

  • avatar

    RE: “Your gross margin question is wholly irrelevant to what I’m discussing. In the future, I will ignore it.”

    Humor me or forget about it.

  • avatar

    I’m not going to waste time talking about a false premise. Consumers want to know all of the details. Isn’t that what you want too?

  • avatar

    RE: “Author: Pch101
    Comment:
    “I’m not going to waste time talking about a false premise.”

    So you deny that these tactics exist. Why am I not surprised?”

    To repeat myself. Its a new day of accountability. Are you helpless. If there are tactics you don’t like, complain about it. Dealer Rater, PissedOff.com, etc. etc. etc. Are you helpless? JD Power. Answer a survey once. I don’t really know what you are describing but you give it much more weight than it deserves. Buyers have tactics. Sellers have tactics. Both parties have a purpose. Both sides can walk away. If you need a nanny, rent one.

    • 0 avatar
      Pch101

      “If there are tactics you don’t like, complain about it.”

      That’s what some people are doing on this thread. Yet this clearly makes you unhappy. Should they follow your advice by complaining, or not?

      “I don’t really know what you are describing but you give it much more weight than it deserves.”

      Don’t worry, you established your credentials as a social Darwinist several hundred posts ago. Anything tactic is acceptable, just so long as it results in a sale.

  • avatar

    RE: Author: Les

    Everyone has a story. Don’t try to make yours typical, whatever it is. I don’t even understand it anyway. If you found what you wanted, good for you. That’s why buyers should shop. Aren’t you glad you did? Do the other deals regret not taking your deal? Does the dealer who did regret it? Don’t try to make a single deal into a typical one. There is no such thing as a typical car deal.

    • 0 avatar
      Les

      What is your point?

      What are you trying to prove?

      I seriously don’t understand what you are trying to accomplish here.

      Unless you are a troll, and your purpose is to infuriate those you are debating with without achieving any resolution on the issues you are discussing. In which case, Great Job!

      • 0 avatar
        Pch101

        “I seriously don’t understand what you are trying to accomplish here.”

        He’s a true believer.

        If you read between the lines, his comments are very educational. Car dealers live on an entirely different planet when it comes to ethics.

        When you wonder how they sleep at night, you can see the answer right here: They have rationalized every bad behavior that you can think of. They feel righteous, blame buyers for everything, and can’t put themselves in the shoes of the average consumer.

        They get so steeped in the culture of car sales that they can’t escape it, not even for a minute. They can only see the business from one side and are unable to understand why buyers might feel justified for not being as thrilled about it as they are.

        You should apply the lessons here to your future car purchases. Don’t lay all of your cards on the table, and understand that the price that you pay is largely determined by how you behave. If you look like an easy mark, then they’re going to go for the max and believe that you are getting what you deserve.

        • 0 avatar
          FreedMike

          “He’s a true believer.

          If you read between the lines, his comments are very educational. Car dealers live on an entirely different planet when it comes to ethics.”

          Hole in one.

          The typical car sales process is basically a mind game played for fun and maximized profit, and the game is played at a level that most people are simply unaware of, or able to cope with. If “Ruggles” wonders why there’s such a deep seated resentment toward car dealers, it’s quite simple: people figure out they were played, and they resent it. It makes them distrustful and angry. Makes perfect sense.

          People who make their living doing this are human too. At some level, they are also emotionally damaged by manipulating other people (or, in some cases, they’re probably good at manipulating other people BECAUSE they’re emotionally damaged). Why do you think the car biz attracts so many liars, druggies, and drunks? Once upon a time, when I was between jobs, I applied at a dealership, and the sales manager said something like this: “I have only one question – do you use drugs? You can shoot heroin into your eyeballs after work, but when you’re here, you have to be clean.”

          That’s why they have to come up with their own “code” that you talk about. They know their behavior is borderline, so they need to justify it to themselves.

          Freud would have a field day with the whole thing.

    • 0 avatar
      Vulpine

      With one statement, you told us everything we need to know about you:
      “Everyone has a story. Don’t try to make yours typical, whatever it is. I don’t even understand it anyway.” By intentionally (or otherwise) NOT understanding his story, you emphasize what we have been saying all this time; that many dealerships will do anything they can to eke out more profits from their victims. The simple fact that Les tried three different ‘local’ dealerships, then had to drive more than three times the distance to the fourth one–probably 50 miles away–AFTER doing all the research and KNOWING what price would be reasonable for himself AND the dealership, shows that every one of them tried to bilk him for more than he was willing to pay because they thought his desire for the vehicle would override his common sense on the price.

      I myself was trained to understand that there are two types of customers; the window shoppers who won’t buy at any price and the buyer who falls in love with the car and is typically willing to pay any price. My initial task at the dealerships I worked was to ensure the love of the customer for the car of choice–get them so enthusiastic that they’re not going to walk out on it. Then I was to hand them over to the ‘Finance Manager” who would actually talk numbers. It quickly became obvious which type was which, especially since I tended to at least try to understand the cars themselves and could usually point the customer to the vehicle that would best meet their needs and at least most of their desires. In many cases I didn’t even need to offer a test drive to know who the window shoppers were and the test drive itself effectively sold the car. On the other hand, the Finance Manager cost me several very willing buyers by playing the ‘Negotiation Game’ just a little too hard. In trying for an $8,000 profit on one specific vehicle, he cost the company over $6000 the dealership would have had in the bank. That’s when I discovered that particular dealership had a habit of re-writing the ‘invoice’ to show a higher MSRP than factory. I quit shortly afterwards and got into security system sales, where I made pretty decent money until–again–the manager started screwing both the customers and the salespeople. That particular business ended up getting shuttered by the IRS and the manager went to jail. It also ended up costing me thousands of dollars in back taxes because he lied on the tax forms telling his salespeople he was taking out income tax while telling the IRS we were “contract salespeople” and pocketing the difference. After that, I got out of retail sales of all types, now working for myself as a private consultant. At least I know what I’m charging my clients end to end and my clients feel like they’re getting a ‘fair deal’ for my services.

      • 0 avatar
        FreedMike

        @Vulpine…

        Wait a sec…did your employer give you a W2, or a 1099, at the end of the year?

      • 0 avatar
        Les

        ” The simple fact that Les tried three different ‘local’ dealerships, then had to drive more than three times the distance to the fourth one–probably 50 miles away–”

        Just thought I’d point-out.

        I live in a rural area, for me ‘local’ is ‘less than 100 miles away’ (The first dealership was about 60 miles away), the last dealership I checked was close to 150 miles with a vehicle of brand/trim/options I wanted which all the other dealerships in my area swore up and down didn’t exist within 500 miles.

        • 0 avatar
          Vulpine

          I was going to use 100 miles as the 3x distance but figured Ruggles would assume I was exaggerating and try to pan it as a facetious argument. I’m actually glad to see I was underestimating the distances.

          Personally, I live within 25 miles of nearly every brand on the market–with multiple DIFFERENT dealers of each brand, and I still am looking at one a little more rural to buy my next Jeep simply because they keep some pre-modded models (both by their own shop as well as multiple “expeditionary vehicle” shops) at reasonable prices. The stock Jeeps average cheaper than the local dealerships (at least by their online pricing) and the modded once are only barely more pricy than buying the parts and doing your own labor.

  • avatar
    Zykotec

    I’ve just read this whole discussion (I think, some may have posted more comments in the time I was reading) And I don’t understand all the hard time Ruggles is getting here. Ok, he misses the ‘reply’ button (a small one at the lower right of any comment) and he doesn’t come off as very empathic (seriously, you can’t make good deals if you’re feeling sorry for your customers)
    But he provides a lot of useful insight into the business world for those who are willing to actually read his comments, and he answers direct questions fully and seemingly very honestly. I know a lot of people have bad experiences with car dealers, with 60 million cars sold each year in the US, I would be very surprised if everyone was happy. And yes, dealers will try to use the customers ‘weakness’ or lack of preparedness to make more money. It’s a business ffs, and they have to make back the money they lose to the guys who get the ‘good deals’. Does any of the experienced buyers here really hope for a world where the dealer has to tell you a line like this ‘I’m sorry sir, we just recently felt bad about trying to give an old lady an unfair deal, so we can’t really can’t let you negoiate the price any lower,since we allready are on our margins to make a profit here’…
    Some (a lot ) of dealers are unexperienced bullshitters and a**holes, you don’t need to buy from them…
    No one out there is being forced to buy a new car…
    (PS, I only buy/sell used cars, and usually only make deals that make both me and the buyer/seller feel satisfied)

    • 0 avatar
      Vulpine

      Here’s the point. Ruggles seems to insist that the current way of selling cars is the only one that does or ever will work, totally ignoring that society has changed due to changes in technology. People are far more willing to order direct from the manufacturer simply to avoid what they perceive as an abusive experience at the dealership.

      YES, I do agree that he has experience AND that what he talks about has worked for nearly 100 years; but with almost instantaneous communications available world-wide AND the ability of the customers to communicate directly with the manufacturer, the current dealership paradigm is obsolete and this is the point Ruggles refuses to even acknowledge.

      Empathy is not the point of the discussion. It’s the simple fact that one company is currently proving that direct sales work and that right now Tesla is in effect being forced to adopt “traditional” methods merely to be able to sell cars in some regions. I am very willing to expect that the ‘traditional’ dealership Tesla opens in Tyson’s Corner, Virginia will NOT be traditional, but rather a simple display room, a limited number of test drivable cars and a service center. I don’t think they will carry any more inventory than the ‘mandatory’ 10 cars that state requires.

      I also expect that if Tesla’s system continues to work at that location, local traditional dealerships will attempt to influence legislation forcing Tesla to make that dealership independent of the factory and thus block Tesla from selling direct permanently in that state. Why? Because if Tesla’s methods work and the manufacturer realizes higher profits as a result, other manufacturers will attempt the same methods and potentially drive the independents out of business. NADA already has legislation in place in most states preventing manufacturers from directly competing with Association dealerships. For them, “across the street” could mean “across town” for all they care. Anywhere in the same county could be enough to claim a corporate-owned dealership is competing directly with an Association dealership–or the same state. Direct-to-door sales would be easy to fold in under that same legislation and these dealerships don’t even want that much competition.

      The problem is that with the change in technology and Tesla’s current success, especially if Tesla can prove that NADA in particular is promoting and abusing monopoly power through collusion between dealerships to fix prices at an unreasonably high level–especially if those prices can be proven to be significantly above MSRP. Current window stickers cannot be trusted to reveal actual MSRP as SOME dealerships have been alleged to print their own stickers with an artificially-inflated MSRP which results in even higher profits for the dealerships. The consumer ends up the ultimate loser–or did until today’s technology allowed said consumer to realize just how much difference there is between one dealership’s ‘sticker’ price and another’s. Worse, we are also quite aware of how some dealerships have gone so far as to grossly inflate the price of a new model especially if they believe there will be a high demand for that model. I witnessed this one myself when the original “New Beetle” came out from Volkswagen and one (non-VW) dealership offered several for more than $10,000 over MSRP.

      Buyers don’t want lines like, “‘I’m sorry sir, we just recently felt bad about trying to give an old lady an unfair deal, so we can’t really can’t let you negoiate the price any lower,since we allready are on our margins to make a profit here,’’ They simply want to walk in, plop down their money and drive out. Is that really so difficult to understand?

      • 0 avatar
        Zykotec

        I understand your point about wanting to go and buy a car at ‘sticker price’ like you may buy an Ipad or a can of coke. But who’s to say that the price you pay is fair then ? The only car I’ve bought at a dealership cost me a lot more than if I had chosen to travel 500 miles to buy the same car. And I made that decision because I know cars here will also have a higher resale value compared to one from down south where they use more salt on the roads (This is in Norway btw) and because I had the chance to give the car a good lookover and test-drive. And I now also have a local dealer that I’ve had the chance to measure up and down, and who has to look me in the face when I had/have questions about the car. I also understand that the dealer here will have less of a margin for profit as they have a smaller customer base and fewer cars that spend more time on the showroom floor.
        And if I was desperate to show off my ‘new Beetle’ to whoever would think I was ‘more worthy’ for owning one, that feeling would be worth the extra price, just like it is to buyers of new apple products…
        Of the 60 million car buyers, the (guessing a number here) 5 millions who felt they got a ‘good deal’ be negotiating a ‘good price’ would not like to have to pay the same as everyone else…

        • 0 avatar
          FreedMike

          “I understand your point about wanting to go and buy a car at ‘sticker price’ like you may buy an Ipad or a can of coke. But who’s to say that the price you pay is fair then?”

          In standard retail transactions, the customer can usually be confident that the price he pays is the same price the next customer will pay. A lot of retail stores also have price guarantees on big-ticket items.

          This isn’t the case in the car business. You can pay quite a bit more than the next guy for the same exact product, and if the manufacturer starts a rebate program the day after the deal closes, that’s too bad for the buyer.

          Worth noting: this is also the case in the airline business, and their customer service ratings are notably poor too.

  • avatar

    @ Zykotec- RE: “(PS, I only buy/sell used cars, and usually only make deals that make both me and the buyer/seller feel satisfied”

    At last, an actual market participant. Deals are made with both parties are satisfied. Otherwise, why make the deal? I don’t know a dealer whose mission in life is to piss of buyers. That would be a strange way to do business. There will always be whiners, who actually get a fair deal but think they got screwed because they don’t understand the business world.

    Thank you Zykotec. You will now be labeled a “troll” by those who could learn, but think they already know anything.

    • 0 avatar
      FreedMike

      “I don’t know a dealer whose mission in life is to piss of buyers.”

      Really? Most dealers I’ve bought from – not to mention the dealership did a five-month stint in during the ’80s – have done a pretty good job convincing me that’s EXACTLY what their mission is. And you know what? That’s all part of the schtick. They WANT you emotionally invested – not only in the car, but in the negotiation process as well. The more emotionally invested you are, the harder it will be for you to drive down the street to dealer ABC.

      Hard sell tactics are, at their most basic level, emotional manipulation. Most people are not manipulative, and have no idea how to handle it when someone’s doing it to them.

      And for the dealers who do business this way (and there are plenty of them), this is a big, blunt, nasty advantage on their part.

      No wonder Tesla wants to do away with this dynamic.

    • 0 avatar
      Les

      “Thank you Zykotec. You will now be labeled a “troll” by those who could learn, but think they already know anything.”

      No ruggles, just you.

      Because your tone and general attitude in these discussions makes you look like an A–hole.

  • avatar

    RE: “Ruggles seems to insist that the current way of selling cars is the only one that does or ever will work, totally ignoring that society has changed due to changes in technology.”

    No, Tesla SO FAR has proven what we market participants already know. A niche player can sell direct as long as they can make money while controlling the supply demand balance. At some point, an OEM needs economy of scale to become mass market. Perhaps Tesla intends to remain “niche.” I doubt it. Musk has a plan.

    RE: “People are far more willing to order direct from the manufacturer simply to avoid what they perceive as an abusive experience at the dealership.”

    Except they can’t because OEMs have NO INTENTION of undermining their current distribution network. First, they have more sense than that. Then there is the matter of the lawsuits from doing so due to the contractual relationships they have entered into.

  • avatar

    RE: “The people here are automotive enthusiasts and in most cases have at least some idea of what the industry is all about, even if they don’t agree with your conclusions. We’re the ones who hope to have some influence (and in some cases have) on the industry other than just saying, “XXXX brand is crap” the way most of those sites you mentioned get filled.”

    Enthusiasts can be great resources based on their knowledge of a particular brand or brands. Understanding the auto business is something else again. The world is full of experts who have never “suited up.”

  • avatar

    RE: “I’m not a victim the way you have implied, but I AM trying to make things easier for the true victims–the ones who tend to be grossly manipulated by abusive dealerships.”

    Suggestion – Learn the business first before trying to change it. And get rid of the victim mentality. If you want prices to be fixed so everyone pays the same, the best negotiators get penalized for doing the work and research to get a better deal. But try to get “price fixing” passed the FTC. Dealers don’t own them by any stretch.

  • avatar

    RE: “I’d suggest you watch that reality program about “secret diners” where business analysts go in without the knowledge of the restaurant manager. Almost invariably they discover underhanded tricks being used to increase and siphon profits and abuse customers. I’m not saying the actual tactics are relevant, only that in every case it takes extended observation to discover these things.”

    I’ve taught dealers to mystery shop themselves for twenty years, and have done so al over the U.S. and Japan.

    RE: “That said, you continue to harp on “just shop around”, flat-out ignoring the repeated statements that:
    1.) If the buyer wants a specific brand, shopping around may mean having to drive 50 to 100 miles or more away from home just to get to a different dealership carrying that brand.”

    Why would I want to ignore the facts of life. Where is it written “every consumer should get exactly what they want easily?”

    RE: “2.) If they buyer doesn’t care about any given brand, he may still need to drive excess miles just to shop a different dealership owner as one person or corporation may own an entire string of dealerships in the buyer’s locality–meaning every one of them will be run effectively identically. I’ve clearly pointed out that where I live, one owner operates two Ford dealerships 15 miles apart in my county. Another owner operates three separate brand dealerships also in one county. The next county over has a single owner operating dealerships for seven different brands in one strip of road and three more about 10 miles away.”

    It is what it is. However, I’ve done work with enough dealer groups to understand the intense competition between outlets.

    RE: “In other words, shopping around for a different dealership (one that’s run differently) is nearly impossible in some cases. Which directly argues your statement of, “I sometimes visit ten dealerships a week.”

    My purpose of visiting dealerships has nothing to do with car shopping. It has a LOT to do with my understanding of how different dealerships are from one to another while they are all trying to achieve the same objective.

    RE: “I can assure you they aren’t all the same,” as demonstrating that you don’t stay at any one dealership long enough to know HOW it is run;”

    Thanks to some experience I can readily identify dealership characteristics with a MUCH deeper understanding that amateurs. An amateur doesn’t even know the question.

    RE: “you’re just there to teach them (offer advice).”

    Only a fool provides advice without underlying knowledge of how the dealership operates. Fools don’t last long as consultants.

    RE: “They may adopt your suggestions or they may not.”

    No shit!

    RE: “How do YOU know once you’ve left? We, as customers, have to live with these dealerships in our neighborhoods and have long-term exposure to their methods.”

    More whining. Learn the business first before trying to change it. You’ll have a lot more credibility.

    RE: “Also, as I have said before, I did manage to effect some change at one dealership for the better and that dealership is now realizing better sales and repeat business compared to even last year when they were driving customers away.”

    Did they thank you and send you a check? :) Maybe you can leverage that success story into a real business.

    RE: “Yes, I also said I used Social Media–of which Yelp and those other sites you mentioned are but small examples. However, the sites you mention are great for talking to other consumers but don’t have much, or any, affect on the business side of the products involved.”

    If you sour enough consumers on a particular dealership, it will impact their bottom line. That said, there are always cranks that don’t know a good deal from a bad deal.

    RE: “Certain other sites are frequently monitored by the manufacturers themselves and commentary THERE tends to result in relatively rapid and direct action. As we have already seen from other TTAC articles, manufacturers tend to pay more attention to automotive blogs than they do to sites like Yelp.”

    Really! :)

    • 0 avatar
      Vulpine

      * “Why would I want to ignore the facts of life. Where is it written “every consumer should get exactly what they want easily?””
      Where is it written that if a car buyer wants a deal, he MUST drive hundreds of miles away and spend a minimum of one full work-day away from his job to buy a car? That may be a cliché, but it is very typical of how people are forced to buy cars because of the typical dealership games.

      * “It is what it is. However, …”
      Why? Sure, I understand competition between dealer groups; this should mean they’re going out of their way to undercut their competitors. In the specific example cited, they all did the same thing–jacking up the price rather than undercutting their competition. Les should not have been forced to drive an hour away or more just to get what every bit of research said should have been his original deal. This more implies a collusion between area dealerships than any level of competition between them.

      * “My purpose of visiting dealerships has nothing to do with car shopping. It has a LOT to do with my understanding of how different dealerships are from one to another while they are all trying to achieve the same objective.”
      Then why do you support these Dealer Games if you are trying to understand the differences? It seems to me that even you would be looking for some method of changing the established to improve sales and customer satisfaction. “More of the same” is not an improvement on either side of the game.

      * “More whining. Learn the business first before trying to change it. You’ll have a lot more credibility.”
      And you have a lot less credibility with that statement by the simple fact that due to years of proximity experience with a given dealership, we’re far more likely to know that dealership than you’re going to learn in 4 or 5 hours. Weeks or even months of observation may be required to learn the facts, especially if they’re doing something underhanded like the examples I’ve cited elsewhere.

      * “Did they thank you and send you a check? :) Maybe you can leverage that success story into a real business.”
      Yes, but not enough to open my own dealership. Why should they when that dealership DID change its policies?

      * “RE: “Certain other sites are frequently monitored by the manufacturers themselves and commentary THERE tends to result in relatively rapid and direct action. As we have already seen from other TTAC articles, manufacturers tend to pay more attention to automotive blogs than they do to sites like Yelp.”
      Really! :)”

      We’re holding this conversation here, aren’t we? Assuming for a moment that the OEMs do follow this blog, is it not likely that they’ve read both sides of this discussion and come to their own conclusions? Neither of us may be fully satisfied with the outcome, but I’m betting that the OEMs are watching the outcome of Tesla’s latest venture very closely.

  • avatar

    RE: “For that matter, I do remember “industry analysts” coming through dealerships and hearing the managers say things like “be on your best behavior while they’re here.”

    Dealerships are afraid of “industry analysts?” News to me.

  • avatar

    RE: “When you wonder how they sleep at night, you can see the answer right here: They have rationalized every bad behavior that you can think of. They feel righteous, blame buyers for everything, and can’t put themselves in the shoes of the average consumer.

    They get so steeped in the culture of car sales that they can’t escape it, not even for a minute. They can only see the business from one side and are unable to understand why buyers might feel justified for not being as thrilled about it as they are.”

    Yes, dealers ARE steeped in the culture of business where they are reminded at every turn what their objective is. And if they forget the mission, the lesson is cold and brutal.

  • avatar

    RE: “And again you ignore the fact that you’re wrong on at least one count as buying direct from the factory IS an option–in fact for the moment the ONLY way you can buy a Tesla. And it’s working well enough that Tesla has already sold tens of thousands of cars–of two different models–without ruffling the feathers of their customers. In fact, I know of only a very, very few Tesla owners who have made any complaint at all about their buying process or the vehicles themselves. Tesla’s customer satisfaction rate is the highest in the industry–barring the fact that analysts like JD Power haven’t even looked at Tesla or consider them too niche, at least for now.”

    And Saturn was a “success story” for a while too. Let’s give it some time before taking a victory lap. They need economy of scale to achieve mass market. OR perhaps they WANT to remain niche?

    • 0 avatar
      FreedMike

      Saturn didn’t fail because of its selling strategy – in fact, I’d say this was a key reason the brand managed to stick around as long as it did with the products it had to work with.

      Think about that: for ten years, all those dealers had to sell was a compact sedan, wagon and coupe. And not only was the range limited, the platform wasn’t updated until 2003. But even so, this model sold quite well, and Saturn actually had a very loyal following. It all went wrong when they introduced the Ion, which bombed.

      Saturn died because GM failed to provide competitive product for the brand. End of story.

  • avatar

    RE: “While they’re not abandoning the dealership network as yet, it appears even GM recognizes that some customers flat-out know what they want and simply don’t want to go through the hassles of the typical dealer experience.”

    What do you think was the basis for the Saturn experiment twenty five years ago?

    RE: “Not only that, but if they sell the car at MSRP rather than at dealer invoice, the manufacturer realizes much higher “gross profit” per vehicle than selling through a middleman.”

    You fail to understand the difference between gross profit and net profit. You fail to understand the issues with trying to retail cars via a huge corporate bureaucracy versus a nimble small business with local connections. You fail to understand the fact that mass market OEMs need the inventory buffer provided by dealers. As an amateur there is no way you could understand that. In theory, direct from the factory sounds simple. Let’s see what OEM wants to be the first to undermine its own distribution network. Any exec to propose such idiocy would be fired.

  • avatar

    RE: “Meanwhile, most of us already know that the majority of a dealership’s profits don’t come from auto sales but rather through factory-authorized auto service.”

    For someone pontificating as an authority you have YET to do any math on the costs of operating a car dealership. You don’t understand the difference between gross profit and net profit, let along “departmental net.” And you pull numbers out of your ass.

    The only place you’ll find $20 trained techs might be in a country store in N. Dakota, IF there. I had $40K – 60K techs in the 1980s. Amateurs have to pull stuff out of their ass because they don’t know the real deal, but think they do. The rest of your math on dealership finances is garbage. HINT: Start with cost structure first. IF a dealership DID pay a tech $20/hr, what would the cost be to the dealership? Show us you understand the business world.

  • avatar

    The majority of shop work done in the average dealership is warranty, PDI, and internal work, plus discount coupon work. Franchise dealers don’t do a lot of customer pay as a total of service revenue. Parts gross profit is limited by insurance companies and by the fact that most dealers are selling parts at a HUGE discount to their competitors, other body shops and independent repair shops.

    You really ought to learn the business first……

  • avatar

    RE: “Author: danio3834″

    Excellent commentary about the issues facing mass market OEMs in the real world, something Tesla has yet to encounter. Take away the dealer inventory buffer and find out what happens to Just in Time inventory for parts needed for production.

  • avatar

    RE: “I also expect that if Tesla’s system continues to work at that location, local traditional dealerships will attempt to influence legislation forcing Tesla to make that dealership independent of the factory and thus block Tesla from selling direct permanently in that state. Why? Because if Tesla’s methods work and the manufacturer realizes higher profits as a result, other manufacturers will attempt the same methods and potentially drive the independents out of business.”

    Dream on.

    RE: “NADA already has legislation in place in most states preventing manufacturers from directly competing with Association dealerships.”

    Why do you need to just make stuff up? NADA has NO LAWS in place in ANY state. NADA doesn’t make laws. Besides, NADA is a national organization. And contractual agreements between OEMS and their dealers, NOT TO MENTION COMMON SENSE, stand in the way of OEMs trying to undermine their own dealers network.

    • 0 avatar
      Pch101

      You’re being rather disingenuous. NADA doesn’t just publish data and host conventions, it also lobbies for legislation and makes campaign contributions.

      Last year, NADA spent about $3 million on lobbying, and another $3.6 million in campaign contributions. NADA is a major player in both respects.

      Happy reading: http://www.opensecrets.org/orgs/summary.php?id=D000000080

  • avatar

    RE: “Tesla’s current success”

    Notice the word “current.” I football team scores a touchdown in the first minute of the game and they’ve won the game?

    The car seems to be great. I’ve been thinking about buying one with Musk guaranteeing its value, a risky move on his part. But revolutionizing the business? There is a BIG difference between the wishful thinking of amateurs and the real world.

    • 0 avatar
      Vulpine

      I really do wish you would keep these comments in context as you make it EXTREMELY difficult to maintain a coherent discussion (which is, I believe, why you don’t). As it is…:

      * “Notice the word “current.” I football team scores a touchdown in the first minute of the game and they’ve won the game?”

      I’ve never stated that they’re winning the ‘game’, yet for now they’re jumping out to a strong challenge against the traditional methods. They’re doing well enough that it clearly raises question as to whether another OEM couldn’t succeed through the same methods. This also means that traditional dealerships are facing a different kind of competition that not only can, but if not stopped WILL destroy their business IF it continues to succeed. Rather than waiting for “the market” to decide, groups like NADA would rather upset the scales and simply prevent that competition from succeeding through legislation (a true socialist methodology) than risk irrelevance in the open market.

      In fact, let’s carry your own simile out to an illogical conclusion. Let’s say that team Tesla has scored an unexpected touchdown in the first few minutes of play. Team NADA turns to the judges and says, “team Tesla is cheating. They’re letting the quarterback make touchdowns.” The judges say, “Ok, from here on, the quarterback can no longer make a touchdown–he MUST have some other player make the score.”
      Now, what if team Tesla scores another touchdown by handing the ball off to the cornerback, who makes a long run past all the defenders for the goal. Team NADA again complains, “Team Tesla is cheating. Their runner is faster than ours!” Will the judges then say, “Ok, team Tesla may no longer let any one runner take the ball all the way to the goal line”?

      • 0 avatar
        Pch101

        “I really do wish you would keep these comments in context as you make it EXTREMELY difficult to maintain a coherent discussion (which is, I believe, why you don’t).”

        It’s a command-and-control tactic that he uses as he attempts to own the discussion. Think of it as the blog equivalent of the four square.

      • 0 avatar
        Zykotec

        IE, Chrysler may not use pointy front ends or huge wings on their Nascars racers anymore, Fords SOHC Hemi will not be allowed in drag racing, F1 cars may not use huge fans under the body etc. etc.

  • avatar

    RE: “The consumer ends up the ultimate loser–or did until today’s technology allowed said consumer to realize just how much difference there is between one dealership’s ‘sticker’ price and another’s.”

    Today’s Technology? Haven’t we had eyes available for a while?

    RE: “Worse, we are also quite aware of how some dealerships have gone so far as to grossly inflate the price of a new model especially if they believe there will be a high demand for that model. I witnessed this one myself when the original “New Beetle” came out from Volkswagen and one (non-VW) dealership offered several for more than $10,000 over MSRP.”

    If that is the market price, the market will determine it. If no one will pay it, so what if they ask it. The new Corvette seems to be bringing over MSRP. If people stop paying it, the market adjusts. Isn’t that how capitalism is supposed to work? Or should we create a bureau so a consumer can apply for a hardship card, entitling them to special treatment in the business world if they feel like a victim. Of course, we’ll have to eliminate the extra good deals for the best negotiators to pay for that. We could create a socialized auto business so everyone pays the same, controlled, of course, by folks who know what is fair and what is not. That works, right?

    • 0 avatar
      FreedMike

      ” Of course, we’ll have to eliminate the extra good deals for the best negotiators to pay for that. We could create a socialized auto business so everyone pays the same, controlled, of course, by folks who know what is fair and what is not. That works, right?”

      Franchised restaurants do this all the time, and no one calls that socialism. Maybe this is why people don’t dread going to franchised restaurants, but many DO dread going to a car dealership.

      Lessons to be learned here?

    • 0 avatar
      Vulpine

      * “Today’s Technology? Haven’t we had eyes available for a while?”
      Eyes can only see for 7 miles on the surface of this planet. The internet gives those eyes global reach. Too many people want to ignore that fact.

      * “Or should we create a bureau so a consumer can apply for a hardship card, entitling them to special treatment in the business world if they feel like a victim. Of course, we’ll have to eliminate the extra good deals for the best negotiators to pay for that. We could create a socialized auto business so everyone pays the same, controlled, of course, by folks who know what is fair and what is not. That works, right?”
      Great job of taking the response to the opposite extreme–yet another traditional debating (and sales) technique. When you carry the datum to the ridiculous, you either make yourself out a genius–or a fool. Expecting someone to agree with that ridiculous then either makes that other person a fool or a genius.
      We both know the world is not such a black and white place, though for many they want it so. That is the purpose of negotiation but to be quite blunt, that’s also why our government is shut down right now–one side of the negotiation simply refuses to negotiate and will do ANYTHING it can to eliminate something it doesn’t like, despite the fact that the majority of Americans couldn’t care less about that one aspect. Those supposed “geniuses” have done nothing but made themselves perceived as idiots because of it. There can be no “On/Off” with negotiations, there has to be a middle ground where both sides can be satisfied but in like one certain political party, auto dealers don’t want to compromise and would rather lose the deal than give in even a little bit–as again exemplified by Les’ experience.

  • avatar

    RE: “that many dealerships will do anything they can to eke out more profits from their victims.”

    Shocking. So many victims! :)

  • avatar

    BTW, restaurants don’t take trade ins and people pay the posted price and don’t try to negotiate it. Just in case you were wondering. Financing is rarely an issue to, BTW. Great analogy. :)

  • avatar

    Vulpine – Your eyes can’t tell the difference between a Monroney Label and a dealer add on sticker?

  • avatar

    RE: “Author: FreedMike
    Comment:
    Saturn didn’t fail because of its selling strategy – in fact, I’d say this was a key reason the brand managed to stick around as long as it did.”

    Saturn stayed around as long as it did because GM was hard headed and didn’t want to admit its mistake. It was NEVER viable.

    RE: “Saturn died because GM failed to provide competitive product for the brand. End of story.”

    As if YOU would have a clue. When they were given competitive products, like the Aura, consumers flocked to Honda and Toyota to be abused in the traditional way. Why would they have done that in such disparate numbers if they REALLY wanted a No Hassle approach?

    • 0 avatar
      danio3834

      Saturn’s ultimate failure reall was because of their products, or lack thereof. The Aura was too little, too late, and the rest from the last decade were basically re-badges of products consumers could get at other GM franchises. No haggle pricing can work as a business model, but only if you have a really desirable product.

      High demand stifles haggling without really needing to have a policy in place.

    • 0 avatar
      Vulpine

      * “Saturn stayed around as long as it did because GM was hard headed and didn’t want to admit its mistake. It was NEVER viable.”
      As a former Saturn owner, I STRONGLY disagree. If anything, their cars were too good, UNTIL GM started simply re-badging Opel cars as Saturns. Which also directly argues your next point:

      * “When they were given competitive products, like the Aura, consumers flocked to Honda and Toyota to be abused in the traditional way.” The Saturn Aura was 100% the Opel Aura modified to US specs–no longer a Saturn-built product. As such, it was never a competitive product because Opel itself was failing in Europe at the time and is still struggling 8 years later. Had GM continued building Saturns in their own assembly plant to Saturn designs–perhaps using the Opel platform as a base–Saturn might still be around. When Saturn lost the things that made Saturn unique, THAT’S when Saturn started to die.
      For that matter, do you want to know one of the things that made Saturn unique? It was the Japanese-style manufacturing process that greatly simplified the assembly of the cars. Maybe you should check out who is currently running the Spring Hill, TN assembly plant that used to be Saturn’s.
      I might also note that just about the same time that Saturn started selling re-badged Opels, their selling policies also switched to the traditional one. In other words, GM did it to themselves. CEO Waggoner and at least two CEOs before him effectively destroyed GM as a conglomerate as well as all three brands that Waggoner ended up shutting down. Buick only survives due to its Chinese market (even now talking about bringing in yet another Opel under the Buick badge). Cadillac is completely re-imaging itself to compete more directly against BMW and Mercedes (performance luxury) while Chevrolet is trying to take on everything else. Meanwhile, Chevrolet and GMC pickup trucks are so identical that they’re now assembled on the same production lines with little more than cosmetic differences–yet are priced as much as $3000 apart for otherwise identically-equipped models. Over at Pickup Trucks dot Com you frequently see the argument that having two separate truck lines is stupid and uneconomical and to a point I agree, even though I disagree as to which of the two is the “better” truck–which is due purely to the aesthetics of the fascia–the nose of the truck.

    • 0 avatar
      FreedMike

      @Ruggles:
      “As if YOU would have a clue.”

      Ah, yes, the troll emerges…

  • avatar

    RE: “Because your tone and general attitude in these discussions makes you look like an A–hole.”

    Sorry you can’t handle the truth.

    • 0 avatar
      Les

      Case in point.

      Whatever ‘truth’ you may have, it will die with you because nobody wants to actually Listen to you because you are deliberately abrasive.

      This may hurt your Objectivist sensibilities that actual people with actual emotions place how they feel when they try to communicate with you over whatever ‘truth’ you claim to be imparting, but that’s the way the real world works, why you whinin’?

  • avatar

    RE: “Author: Pch101
    Comment:
    You’re being rather disingenuous. NADA doesn’t just publish data and host conventions, it also lobbies for legislation and makes campaign contributions.

    Last year, NADA spent about $3 million on lobbying, and another $3.6 million in campaign contributions. NADA is a major player in both respects.”

    As I said, NADA is a NATIONAL organization. Their lobbying is at the national level. BTW, $6.6 million is chump change these days. I thought this discussion had to do with state law.

    • 0 avatar
      Pch101

      While I realizing that parsing is second nature to you, let’s deal with the substance of the comments.

      NADA and various dealer associations lobby for legislation, operate PACs and support candidates. The interests of NADA and the state dealer groups are aligned, and board members often serve on both, sometimes simultaneously.

      NADA’s current president was CEO of the California New Car Dealers Association for a decade prior to taking that job. You’ll find that the directors of NADA (there are many of them) are also involved in the state organizations, including in leadership positions.

      Surely you must know this. If you’re going to resort to lying, then expect to be called out on it.

  • avatar

    RE: “I’ve never stated that they’re winning the ‘game’, yet for now they’re jumping out to a strong challenge against the traditional methods.”

    So did Saturn.

  • avatar

    RE: “Rather than waiting for “the market” to decide, groups like NADA would rather upset the scales and simply prevent that competition from succeeding through legislation (a true socialist methodology) than risk irrelevance in the open market.”

    What legislation is NADA proposing to thwart Tesla?

  • avatar
    danio3834

    Ruggles, just use the reply button already. I’d like to see you stick around here, but you’re seriously f*cking with the flow of the comment threads. The moderators may eventually tire of it as the rest of us have.

  • avatar
    Zykotec

    This discussion has become way to long and complicated to follow, and as I have no experience with American car dealers, I’m afraid I’m going off a cliff soon, but honestly, Les, your story here is a successstory from a buyers point of view isn’t it ? You may have been wrong by making your maximum price your first offer, as the dealer was probably expecting negotiations to start, and the dealer didn’t fall for the ‘walking away’ trick (that wasn’t a trick from your side) and you then failed even more by leaving, and then returning with a better offer,thereby putting yourself in an even weaker position. (Btw, I’m in no way a dealer, but I’ve learned some tricks from a brother in retail, and I’ve handled pay negotiations for the union at at the factory I work at two years in a row )
    Negotiations are a lot like playing chess. Putting an experienced player against a novice can be hard for both parties, since none of the players act the way the other is expecting him too, or is trained to respond to.
    BTW, I bet a lot of the buyers who feel ‘violated’ by dealers, were quite happy with their deal until they came home to their SO’s, or heard the (most likely made up) stories about ‘great deals’ in the lunch room at work…

  • avatar

    Again, for the record:

    1. I am an advocate for Tesla being able to establish its own company owned dealerships. In speaking with a variety of NADA leaders, including current Chairman David Westcott, they don’t seem to be concerned about it. Why would they be? The VA deal had NOTHING to do with NADA. Tesla had never filed an application for a dealer’s license with the VA DMV until they did. Then the matter of the ten cars came up and was somehow resolved. What did any of this have to do with NADA? I don’t even know any dealers concerned on way or the other. Why would dealers be concerned? Are they quaking with fear their OEM will start allowing consumers to order direct, bypassing the dealer and undermining the OEM’s distribution system?

    2. If ANY of the current auto OEMs wants to establish an order direct from the factory model, let them try. If they think it is smart business to back stab and undermine their dealer body, let them go for it.

    3. Despite this small group of the “infuriated,” complaining to each other about auto dealers, one thing is clear. Consumers would prefer to play the game if there was no chance they’d lose. Regardless of what consumers say on surveys, MOST want to have the opportunity to get a better deal. But to do so, there is a chance they might pay more than the last person. In other words, consumers want it both ways. Sounds like human nature to me, having your cake and eating it too. And dealers are supposed to be upset about this? In surveys, consumers HATE dealers, but LOVE the one they just bought from. That is a fact and could be instructive for those who want to be instructed.

    4. Auto Consumers have never had it so good.

    5. You don’t always get what you want. Mick Jagger.

    6. If you need a nanny, have the presence of mind to hire one.

    7. Buyers remorse wasn’t invented recently.

    8. Learn the math of the business before convincing yourself you have all the answers.

    9. When Chrysler and GM went into C11, they legally abrogated all of their dealer agreements? Why didn’t either of them establish a factory direct model then? What’s to keep ANY auto OEM from establishing a new division based on direct order TODAY? GM never had a problem establishing its NEW Saturn division with a single dealer owning all outlets in a particular market. That was a “change.”

    10. What’s a DMS? What’s the average gross profit on a new car deal? What expenses have to be taken out of the gross profit of a new vehicle? What does the profitability, or lack of profitability, of other dealership departments have to do with the profitability of the new vehicle department? What determines a used vehicle’s value? If 100 of the same Yr/Make/Model of car went through an auction, same color, same miles, same condition, would they bring the same money? If a business person pays an employee $100., what is that employee’s cost to the business? If you can’t answer these questions, you need to start listening and stop pontificating. If you get through these questions there are hundreds more you should master before wading into waters over your head. Only 100% is a passing grade.

    • 0 avatar
      Vulpine

      Continue the quote, Ruggles…
      “You get what you need” That means the buyer doesn’t necessarily make the purchase THERE, or buys something less than they want because they can’t afford it.

      That’s also why I almost invariably custom order my vehicles now–no dealership tends to carry what I want–they almost invariably over-equip it, forcing me to wait as much as three months to get what I need. This wasn’t always the case as they used to carry a range of each model, at least one of which would at least be close to what a customer wants. If you go to a dealership now, it seems the vast majority are high-end models with one or two base models as price leaders. They almost never carry anything in-between any more.

  • avatar

    http://wardsauto.com/blog/people-love-their-dealer-hate-yours#comment-22921

  • avatar

    RE: “High demand stifles haggling without really needing to have a policy in place.”

    So true. One Price No Hassle works fine when demand exceeds supply. But that NEVER lasts.

  • avatar

    Maybe the moderators can explain why they provided a “Leave a Reply box, especially in light of the fact that blogs from the beginning, including and especially LinkedIn, work this way.

    • 0 avatar
      mike978

      Or you could do what most if not all do on this site when replying and click the reply button. That way your reply can be seen in context to the original post. It would make it much easier to follow this thread.

    • 0 avatar
      28-Cars-Later

      This site uses WordPress software, and every WordPress site I have seen uses a reply button.

    • 0 avatar
      Les

      Since Ronnie Schrieber, one of the editor alummni and moderators of this site, has Already explained what the ‘Leave a Reply box’ is for and how use of the ‘reply’ button at the end of posts is intended to differ the odds that you are a genuine Troll rapidly begin approaching 1:1.

    • 0 avatar
      Vulpine

      By the way…
      “Maybe the moderators can explain why they provided a “Leave a Reply box, especially in light of the fact that blogs from the beginning, including and especially LinkedIn, work this way.”
      That initial box which is at the top of even this list, is clearly intended for the reader to reply to the author of the article, NOT every single sub-commenter whose on comments include a “reply” box.

  • avatar

    RE: “As a former Saturn owner, I STRONGLY disagree. If anything, their cars were too good, UNTIL GM started simply re-badging Opel cars as Saturns.”

    As an actual market participant, I can tell you Saturns were generally pieces of shit. After the new wore off, they sucked on the wholesale market, the true test of a vehicle’s value. They became a mainstay of the BHPH crowd, along with the Ford Taurus.

  • avatar

    The Aura, on the other hand, was a fine vehicle and does well on the wholesale market.

    • 0 avatar
      28-Cars-Later

      Please define “well”.

      MY2007 Aura V6 XE, MSRP $20,345:

      On the low miles end does 7-9

      09/19/13 OMAHA Regular $8,800 36,667 Above LT BLUE 6G A Yes
      10/03/13 LOUISVLL Regular $9,000 39,482 Above TAN 6G A Yes
      09/18/13 NEWORLNS Regular $8,400 42,705 Above BLACK 6G A Yes
      09/10/13 ORLANDO Regular $7,800 53,814 Above WHITE 6G A Yes
      10/02/13 SAN ANTO Lease $8,300 55,495 Above WHITE 6G A Yes
      09/25/13 SAN ANTO Lease $7,900 57,495

      On the high miles end does 3-4 or less

      09/25/13 NJ Regular $1,650 205,996 Below RED 6G A Yes
      09/24/13 DENVER Regular $2,800 199,700 Below GRAY 6G A Yes
      09/17/13 ARENA IL Regular $1,500 187,793 Below BLACK 6G A Yes
      09/26/13 DFW Regular $3,000 184,122 Below SILVER 6G A Yes
      09/19/13 NEVADA Lease $3,000 147,719 Below BLACK 6G A Yes
      09/26/13 DETROIT Regular $3,900 145,051 Avg MDGOLD 6G A Yes
      09/24/13 PHILLY Regular $3,500 133,219 Below SILVER 6G A Yes
      10/02/13 UTAH Regular $4,700 130,636 Avg BLUE 6G A Yes
      09/25/13 UTAH Lease $2,900 129,268

      Camcords still do better on wholesale with the same miles and same package.

      2007 Camry LE V6:

      Low

      10/04/13 PA Regular $11,900 53,762 Above SILVER 6G Yes
      09/17/13 RIVRSIDE Regular $11,000 55,795 Above WHITE 6G Yes
      09/11/13 NJ Regular $10,600 59,059 Above SILVER 6G A Yes
      09/17/13 BALTWASH Lease $10,000 63,135 Above SILVER 6G A Yes

      High

      10/03/13 CHICAGO Regular $6,500 155,311 Avg GRAY 6G A Yes
      09/17/13 MINNEAP Regular $6,500 164,849 Avg GOLD 6G A Yes
      09/18/13 CALIFORN Regular $6,000 171,774 Below SILVER 6G A Yes
      09/24/13 NYMETSKY Regular $7,100 194,943 Avg GOLD 6G A Yes
      09/25/13 NY Regular $5,600 197,459 Below GREY 6G A Yes

    • 0 avatar
      Vulpine

      * The Aura, on the other hand, was a fine vehicle and does well on the wholesale market.”
      Tell that to the Aura owners–including the ’07/’08 Chevy Malibu, by the way. Some, very low mileage models, still price at about $15K but here’s one priced at half that :

      2008 Chevrolet Malibu LT
      Blue, 4 door, FWD, Sedan, Automatic.
      jan (Individual Seller) ~ 30 mi. away
      $7,900
      99,000 mi.

      And others with less mileage listed on cars dot com marked:
      Not Priced
      32,215 mi.
      Why not priced? The owner told me it doesn’t run when I called the number associated with that specific one.

      Meanwhile, the older Spring Hill built Saturns tended to last longer and as such didn’t go in for trade-in until after they had 100,000 miles on them and still carried 25% to 50% of their new price as resale value. I’m talking cars up to 10 years old before they were traded. Now that Saturn is totally defunct, their value has plummeted, but prior to that they did hold value at least as well as their Japanese counterparts. Interestingly, my own 2002 Saturn Vue is still on the road and giving my father-in-law almost double the gas mileage as any previous vehicle he has owned and surprised him with its performance and handling.

  • avatar

    RE: “Meanwhile, Chevrolet and GMC pickup trucks are so identical that they’re now assembled on the same production lines with little more than cosmetic differences–yet are priced as much as $3000 apart for otherwise identically-equipped models.”

    Its been this way for decades. 30 years ago I had a GMC franchise. A GMC was a Chevy with a GMC package.

    • 0 avatar
      Vulpine

      And as I noted, BUYERS are saying GM needs to shut down one of those brands to save money. GMC on average only sells half as many trucks as Chevrolet which means if they dropped the GMC brand the Chevy trucks would become almost competitive in overall sales numbers to Ford while even Chryslers RAM trucks sell more than GMC.

      • 0 avatar
        doctor olds

        @Vulpine- “BUYERS are saying GM needs to shut down one of those brands…” Absurd!! GMC is strong and profitable, Sierra represents plus business at higher unit profit. The fact the GM production system builds Sierra as s trim level of a Silverado is one element of why this is a good business plan. Your notions about the cost elements are disconnected from business reality.

  • avatar

    RE: “Had GM continued building Saturns in their own assembly plant to Saturn designs–perhaps using the Opel platform as a base–Saturn might still be around. When Saturn lost the things that made Saturn unique, THAT’S when Saturn started to die.”

    Might still be around? Saturn NEVER made any money for GM. NEVER. And One Price has NEVER worked for very long. Current production methods and scheduling, and the supply/demand equilibrium required for One Price to work, aren’t compatible.

    • 0 avatar
      doctor olds

      Saturn product was not competitive even with the other GM small cars from a quality perspective, as a matter of fact. Lutz’ planned revitalization of the brand with (finally) good product was snuffed out by the financial collapse of ’08.

      In the end, Saturn had product to back up their customer experience capability that led to their historic high customer satisfaction ratings. The Astra, actually typical of laggard European quality, was not a bright spot. It was a stop gap measure. My son bought one (against my advice) and had some irritating quality glitches. He liked the package, the style, but was relieved to trade it on a Regal GS. The NA built Buick has been completely trouble free.

  • avatar

    RE: “If (and I will emphasize that word) Tesla intends to continue on its current build-to-order policy and simply try to project pre-production inventory as compared to post-production, they may get hit less by that depreciation and thus realize more gross profit.”

    Maybe we should give them a while before declaring victory and taking laps.

    • 0 avatar
      Vulpine

      * “Maybe we should give them a while before declaring victory and taking laps.”

      Maybe we should give them a while before declaring them a loser and taking laps. Hmmm? I am at least open minded; you’ve declared them a loser before the game has really begun.

      • 0 avatar

        Again, for the record:

        1. I am an advocate for Tesla being able to establish its own company owned dealerships. In speaking with a variety of NADA leaders, including current Chairman David Westcott, they don’t seem to be concerned about it. Why would they be? The VA deal had NOTHING to do with NADA. Tesla had never filed an application for a dealer’s license with the VA DMV until they did. Then the matter of the ten cars came up and was somehow resolved. What did any of this have to do with NADA? I don’t even know any dealers concerned on way or the other. Why would dealers be concerned? Are they quaking with fear their OEM will start allowing consumers to order direct, bypassing the dealer and undermining the OEM’s distribution system?

        2. If ANY of the current auto OEMs wants to establish an order direct from the factory model, let them try. If they think it is smart business to back stab and undermine their dealer body, let them go for it.

        3. Despite this small group of the “infuriated,” complaining to each other about auto dealers, one thing is clear. Consumers would prefer to play the game if there was no chance they’d lose. Regardless of what consumers say on surveys, MOST want to have the opportunity to get a better deal. But to do so, there is a chance they might pay more than the last person. In other words, consumers want it both ways. Sounds like human nature to me, having your cake and eating it too. And dealers are supposed to be upset about this? In surveys, consumers HATE dealers, but LOVE the one they just bought from. That is a fact and could be instructive for those who want to be instructed.

        4. Auto Consumers have never had it so good.

        5. You don’t always get what you want. Mick Jagger.

        6. If you need a nanny, have the presence of mind to hire one.

        7. Buyers remorse wasn’t invented recently.

        8. Learn the math of the business before convincing yourself you have all the answers.

        9. When Chrysler and GM went into C11, they legally abrogated all of their dealer agreements? Why didn’t either of them establish a factory direct model then? What’s to keep ANY auto OEM from establishing a new division based on direct order TODAY? GM never had a problem establishing its NEW Saturn division with a single dealer owning all outlets in a particular market. That was a “change.”

        10. What’s a DMS? What’s the average gross profit on a new car deal? What expenses have to be taken out of the gross profit of a new vehicle? What does the profitability, or lack of profitability, of other dealership departments have to do with the profitability of the new vehicle department? What determines a used vehicle’s value? If 100 of the same Yr/Make/Model of car went through an auction, same color, same miles, same condition, would they bring the same money? If a business person pays an employee $100., what is that employee’s cost to the business? If you can’t answer these questions, you need to start listening and stop pontificating. If you get through these questions there are hundreds more you should master before wading into waters over your head. Only 100% is a passing grade.

      • 0 avatar

        http://wardsauto.com/blog/people-love-their-dealer-hate-yours#comment-22921

        My last word. Over and out.

  • avatar

    RE: “While I realizing that parsing is second nature to you.”

    Funny you should call being accurate “parsing.”

    RE: “The interests of NADA and the state dealer groups are aligned, and board members often serve on both, sometimes simultaneously.”

    Often, CERTAINLY not always. The heavy lifting us done at the state level by state associations. NADA is RARELY involved in that. Tesla’s issues are at the state level which has little or nothing to do with NADA. Their beef in TX is with the TADA. In VA, with the VA DMV, NOT the state dealer association. Its not the dealer associations fault Tesla just now got around to applying for a dealer license.

    RE: “NADA’s current president was CEO of the California New Car Dealers Association for a decade prior to taking that job.”

    Sure, so what. That’s an administrative position. The weight comes from the Chairman, new every year. Most of these guys come from states. Go figure.

    RE: “You’ll find that the directors of NADA (there are many of them) are also involved in the state organizations, including in leadership positions.”

    WOW. A revelation that the national level organization might have had experience with a state association. WOW!

    • 0 avatar
      Pch101

      It’s nice that you take things literally when it serves your agenda.

      The point being made is that dealers form political lobbies and get legislation that serves their interests. This is just a fact — quibbling over which specific organization does what lobbying completely misses the complaint being raised about dealers writing legislation that serve their interests.

      And again, your style is quite typical of industry sales tactics. Salespeople claim to desire a win-win, even as they pursue a win-lose deal. You don’t really want to create satisfaction for both parties unless the customer is a pushover; you just want to dominate the exchange and blow smoke. Trying to negotiate a win-win with a car dealer is just an expensive waste of time.

  • avatar

    RE: “This may hurt your Objectivist sensibilities that actual people with actual emotions place how they feel when they try to communicate with you over whatever ‘truth’ you claim to be imparting, but that’s the way the real world works, why you whinin’?”

    I came here as a consequence of another Tesla blog from LinkedIn and expected the discussion to actually be about Tesla, not whining from people complaining about car dealers in general. Then these whiners proposed the idea that Elon Musk was going to wipe out all those nasty car dealers and replace them with a system that would overcharge EVERYONE, thereby making consumers thrilled with Tesla. Sorry if me frank and candidate approach offended your tender sensibilities. You really should hire a nanny when venturing out into the cold real world of business.

  • avatar

    RE: “Please define “well”.”

    Seven year old cars holding 35 – 38%? I’ve seen a lot worse. I’ve seen three year old Chryslers with 35% residuals.

    • 0 avatar
      28-Cars-Later

      I agree 35% in a few years, sounds about right for Chrysler cars, esp during the DaimlerChrysler era. If you say 38% is “good” for a GM car then I’ll agree. But if you compare it to all cars it loses its luster a bit, esp when a Camry of the same period can do 50%+.

    • 0 avatar
      Vulpine

      My 7-year-old Jeep is holding between 50% to 66% residuals. It’s a Chrysler product.
      My local Ford dealership offered me 70% for it as a trade in–sight unseen and unsolicited. (Which, by the way, is another Bait and Switch tactic they use.)

      • 0 avatar

        http://wardsauto.com/blog/people-love-their-dealer-hate-yours#comment-22921

      • 0 avatar
        28-Cars-Later

        Chrysler/Dodge car is a different animal than a Jeep or Dodge truck from the wholesale perspective. Back in the early 00s Chrysler cars had a horrible reputation brought on by the 2.7 oil sludge fiasco, transmission issues, and general poor build quality.

        • 0 avatar
          Vulpine

          Perhaps a valid point, 28-cars. How does that excuse my local dealer from sending me an unsolicited offer of so much money for my vehicle without even putting in, “when you trade for ‘X’ vehicle” in the fine print?

          • 0 avatar
            28-Cars-Later

            There’s no excuse; in short, some dealers are hustling scumbags. The reason they can offer you X amount in their “offer” is because trade is a variable.

            I have a friend who gets similar solicitations for his 2009 Pontiac G8 V6. If I had to guess I would say its because that a particular model is selling very well at auction, retailing very well, or a combination of the two. They know what their margins are on new product, and they can estimate a black book value based on your model/year/mileage. They would love to sell you a new car and dip into margin a little (so you get a “deal”) and then have a NICE car to retail or wholesale, something that will sell quickly and/or return a nice profit when it does sell. Dealers might make money on a new car sale to you, but if your trade them a 2000 Neon with 190K on the clock at one of those “Push/pull/tow your trade for 4K in credit”, there is little to no gain to them on the trade. Their goal is to get paid twice.

        • 0 avatar
          28-Cars-Later

          Additional: The only Chrysler car products of the period worth looking today for wheels IMO are the 4-cyl Cloud cars and mayyybe the Neon, I’ve seen quite a few battered but running. LH is unique for what it was but today I’d be hesitant to plunk down four or more figures on one.

  • avatar

    RE: “It’s nice that you take things literally when it serves your agenda.”

    When it serves the facts.

  • avatar

    RE: “The point being made is that dealers form political lobbies and get legislation that serves their interests. This is just a fact — quibbling over which specific organization does what completely misses the complaint being raised about dealers writing legislation that serve their interests.”

    Be accurate and there won’t be quibbling. Just get your facts right and don’t try to guess at people’s intent while stating you “know.” Do you think ANYONE would lobby in favor of things that do NOT serve their interests? How about Elon Musk? What are HIS lobbying intentions?

    • 0 avatar
      Vulpine

      * “Be accurate and there won’t be quibbling. Just get your facts right and don’t try to guess at people’s intent while stating you “know.” Do you think ANYONE would lobby in favor of things that do NOT serve their interests? How about Elon Musk? What are HIS lobbying intentions?”

      Diversion–another tactic.
      Why should THEY lobby unless they feel something is unfair to them? They want government to protect their way of life–whether it be state or federal–so they can continue cheating their customers.

    • 0 avatar
      Pch101

      “Be accurate and there won’t be quibbling.”

      I was accurate. I was commenting about the things said by other posters — I never complained about NADA or the state dealer associations.

      My point was your insistence on focusing on irrelevancies. Had you pointed out that it was the state associations that were doing the lobbying at the state level, then I would have respected your answer. Instead, you implied that there was no lobbying at all, when we all know that dealerships have powerful associations that carry a lot of political clout at the state level. Getting you to be candid about it is about as easy as a root canal.

  • avatar

    RE: “And again, your style is quite typical of industry sales tactics. Salespeoople claim to desire a win-win, even as they pursue a win-lose deal. You don’t really want to create satisfaction for both parties unless the customer is a pushover; you just want to dominate the exchange and blow smoke. Trying to negotiate a win-win with a car dealer is an expensive waste of time.”

    More arbitrary statements fraught with emotion. Unless you propose price fixing, what do you propose to do about the business world? Asked before: Do you want to create a bureau so those with special needs get a special card? Who will pay for that? Maybe YOU won’t be able to get YOUR cheap deal because the little old lady gets it instead.

    • 0 avatar
      Les

      You deliberately couch your arguments in language and tones intended to incite extreme emotional reactions, and then complain about our statements being fraught with emotion.

      The Troll is strong with this one.

    • 0 avatar
      Pch101

      There was no emotion in my reply. It’s actually quite the opposite — I’m suggesting to others here that they leave their emotions behind, forget about the notion of cutting a “fair deal” and just go for the jugular (albeit with some subtlety; using head-on attack tactics doesn’t work.)

      Unless you’re a fleet manager or buying Ferraris, forming a relationship with a dealership or members of his sales team is useless. The focus should always be on getting the lowest price, the highest trade-in value and the cheapest money, not on trying to make friends. They aren’t your friends.

  • avatar
    DenverMike

    @FreedMike

    RE: “The more emotionally invested you are, the harder it will be for you to drive down the street to dealer ABC.”

    I’ve never understood the “emotional” part of buying a car or truck. It’s an inadament object. Trust me, there’s more where they came from. I’ve met some people fanatical about their cars, but none of them had children. I don’t have kids myself, but perhaps they lack perspective in life. Or emotionally stunted. The way “Ruggles” stirs up emotions around here is very telling. Yeah the dealers have it made, once they smell weakness. That’s when they move in for the kill… But we made them this way. They need discipline like kids or pets. We’ve got the money, and should own them. Who’s the Boss? Walk in with authority and low-ball the heck out of them with a ridiculous offer. What’s the worse that can happen? It’s good for a laugh, depending on the salesman, and lightens the mood. Buying a new vehicle should be fun, if not a blast… As long as I’m having a good time, I don’t care. And I can drive away in my old truck (or rental), just the same.

    • 0 avatar
      FreedMike

      For most folks, buying a new car is a very exciting thing, particularly if there’s a family involved. Salesmen play on this, and I can’t blame them.

      And NEVER take your kids along to buy a new family vehicle – maybe they come along when you’re picking out the car, but when it comes time to make the deal, leave them home. Trying to negotiate a car deal with two kids squirming and screaming their way through a showroom is exhausting as hell, and the dealer knows it.

  • avatar

    RE: “And as I noted, BUYERS are saying GM needs to shut down one of those brands to save money.”

    So Buyers know better how to run a car company? I guess they would since they know better how to run dealerships, right?

    • 0 avatar
      Vulpine

      * “So Buyers know better how to run a car company? I guess they would since they know better how to run dealerships, right?”

      So who went bankrupt, GM, or the buyers?

  • avatar

    RE: “Author: Vulpine
    Comment:
    * “Maybe we should give them a while before declaring victory and taking laps.”

    Maybe we should give them a while before declaring them a loser and taking laps. Hmmm? I am at least open minded; you’ve declared them a loser before the game has really begun.”

    You REALLY need to work on your reading comprehension.

  • avatar
    racer-esq.

    I can see how some of the commenters have possibly been ripped-off by car dealers. If someone acts like a jack*ss and doesn’t treat you with respect just leave. Don’t waste your time trying to deal with them. You’re not going to win because by wasting your time dealing with them you’ve already lost.

    An example of that kind of behavior is not using the “REPLY” button to thread discussions.

    Also relevant (and I have to remind myself of this sometimes but it has gotten out of control here): http://imgs.xkcd.com/comics/duty_calls.png

  • avatar
    doctor olds

    Ruggles hit the nail on the head when he wrote:”Don’t be a victim. Put in the work. Or, at least stop whining about it.”

    There is really no excuse for the victim mentality with all the information available today. If you don’t like the way they treat you, or the deal, just walk away. The buyer always has this power.

    Too many folks have been propagandized to see themselves as victims, primarily thanks to one political party in America, at least.

  • avatar

    RE: “Author: doctor olds
    Comment:
    @Vulpine- “BUYERS are saying GM needs to shut down one of those brands…” Absurd!! GMC is strong and profitable, Sierra represents plus business at higher unit profit. The fact the GM production system builds Sierra as s trim level of a Silverado is one element of why this is a good business plan. Your notions about the cost elements are disconnected from business reality.”

    Good points. Another small detail is that GMC is the brand handled by Buick dealers, who have lost Olds and Pontiac. In a market with Chevrolet, the GMC dealer provides a competitor that can work in the consumer’s favor.

  • avatar

    Has the irrational exuberance flamed out here?


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