Tag: Car Buying
TrueCar, the prolific third-party car shopping site, is changing the way it does business in the hopes of mending dealer relations and reversing the company’s flagging fortunes.
When TrueCar president and CEO Chip Perry took the helm of the site last December, his stated goal was to make amends with ornery partners and bring the company out of a period of turmoil.
Carfax has become so commonplace that it’s now standard practice for many car buyers to ask for it when shopping for a used car. Its database has grown over the years to the point that it now claims to to have the most comprehensive vehicle history database in North America.
The reports include such valuable information as title brands, accident history, and even service history for some vehicles, but it has some limitations that unscrupulous dealers are using to their advantage. The missing data allows these dealers to represent damaged cars as clean and use the Carfax report to support those claims.
The Internet brings transparency to the car buying process and allows us to search the whole country for our favorite car. While shopping for a WRX a few months ago, I got quotes from dealers as far as 1,500 miles away. I ended up skipping the local dealers and travelling to a dealer 80 miles away in order to get the best price.
Leaving your immediate geographical area can be beneficial in many instances, especially if you can find a more competitive market that’s reasonably close. Unscrupulous dealers have caught on to geographical buyers who are only looking for the lowest price. These dealers combine geography and psychology in order to dupe buyers to come in and often get rewarded for their shameless behavior by making the sale.
When I was a kid, there was a plentiful selection of automobile choices for old people. There were Buicks. There were Cadillacs. There were Lincolns. There were Oldsmobiles. There were even a few Japanese cars that clearly catered to the elderly. “Enlarged Speedometer Font” was an actual option on more than one vehicle when I was younger.
But what about today?
I buy a lot of cars, which means I often find myself thinking about car sellers and buyers. These are two interesting groups of human beings. In many cases, they’re openly trying to screw you. In other cases, they have no idea they’re screwing you, and you don’t discover they have until four days later when you go to put your briefcase in the trunk and it’s full of rain water.
This got me thinking: What is the least trustworthy group of automotive sellers in existence?
I’ve bought cars from all of them. New car dealers. Used car dealers. Family members, friends, auctions, and strangers on the Internet, from Craigslist to Cars.com to Autotrader to web forums. Every transaction is a little different. And every time, I’m wonder to myself: Is this person going to screw me?
That’s why I’m soliciting your opinion on a topic that’s near and dear to my heart (and wallet). Which car seller can you count on to be the very worst?
Last week, I told you the tale of my friend Rodney’s grandmother who got taken to the cleaners recently by a Cleveland-area Buick dealer. That story’s not quite finished — apparently there have been a few conversations and trips back and forth to dealer, and at one point the “lost paperwork” excuse came into play — so I’ll update all of you once everything shudders to a final halt.
As can be expected from the always-contrarian B&B, not all of you were on the side of the elderly lady in the case. One particularly interesting comment went something like this: “It’s ironic that Jack and Rodney are complaining about the dealer making money off Grandma while at the same time smirking to themselves knowing how often they did that back in the day.”
Well, I cannot say that I ever charged anyone over sticker price for any new car, ever. Not even during the week that the first Ford Expeditions started arriving at dealerships and customers were doing everything but using lethal force to get their hands on one.
That doesn’t mean that I didn’t see some people get “grossed” in the most hardcore method imaginable. So, without further ado, here are a few tales of outrageous dealer-profit fortune, including one in which your humble author played the villain.
TTAC Commentator Matador writes:
I own two cars (and two older pickup trucks): a 1995 LeSabre with 223,000 miles and a 2001 Audi A6 Avant with 165,000 miles on the clock. I drive 80-100 miles per day for work. Between work and personal miles, I drive about 45,000 miles per year. The trucks aren’t daily driven too often and are only used when I need to move something that won’t fit in the wagon. Gas isn’t that cheap!
The Buick isn’t going anywhere. It was my first car and I am a firm believer that you don’t sell your first. I would like to drive it a little less, though, keeping it for special occasions. Since the Audi is my main car, the Buick only receives about 35 percent of my overall miles. I love the way that the Buick handles and I am a huge fan of the 3800’s reliability.
I would really like a Buick wagon, but the Century wagon doesn’t appeal to me at all and the Roadmaster is out of my price range (I could have two Rivieras for the price of a decent Roadmaster wagon). I’m not partial to any brand, or against any brand, though I do find Hondas kind of boring.
Imagine the following scenario: You’re a Buick salesman. An elderly woman comes into your showroom to inquire about a replacement for her Regal. You decide that she’s a great candidate for an Encore, and since you have some previous-year Encore stock you decide that she’s a great candidate for a 2015 Encore instead of the new model. There’s a $149/month lease deal available from GM Financial. What kind of deal do you make for this woman?
If your answer is, “I’d charge her over sticker for the vehicle, switch the lease company to make some back-end money, and add nearly a thousand dollars of profit in fees above that,” then you might just be the salesman that Buick GMC of Beachwood, OH needs.
Earlier this week I wrote about how CarMax is heavily constrained by a market that has flip-flopped between six years worth of heavy car sales and about 18 months of resurgent truck and SUV demand. Long story short, CarMax’s acquisition costs for trucks, SUVs and crossovers has gone up considerably, and the supply of this inventory has cratered due to new car dealers keeping the bulk of this inventory for themselves.
Not everybody liked what I wrote. Case in point.