By on February 4, 2015

kinkade

Imagine that you were a buyer of fine art. Not THAT kind of fine art, mind you—I’m not talking Seurat or O’Keefe here. Just some private collection pieces for your home, maybe in the range of $1K-$10K. Something a little unique and different, maybe not something the masses would enjoy. It might take a little bit of art education to truly appreciate it, but you are capable of appreciating it more than most.

Now, imagine that the only place you could buy them was in a Thomas Kinkade “Painter of Light” store, right next to prints of barns and horses and lighthouses. Now, imagine that the sales reps at that store don’t really want to sell you the higher end paintings, because buyers of that sort of thing are notoriously difficult to deal with, and they don’t really make any money on them, because the artists demand most of the profit. They’d rather just make their commission selling to the ignorant masses who want a touching portrait of Aladdin and Jasmine flying over Agrabah.

That’s what it’s like to be a guy who wants to buy something other than a CamCordima at any non-exotic franchise dealership in America—or maybe more importantly, what it’s like to be a guy trying to sell one.

Recently, I had the chance to rap with the manager of a Mazda dealership in a larger metropolitan area. I asked him, “So, excited about the new MX-5?”

He gave me a very corporate answer like “Yes, we are thrilled to experience the new SkyActiv technology in all of its radiant glory…” But then he said something very telling.

“Of course, it’s not a high volume model. And the margins aren’t going to be great. Even better, we get to deal with all of the ‘Miata’ crowd who want a discount for being in this club or that club or for having owned a Miata for 20 years.”

I had a similar experience again when speaking to the GM of a Ford store about the new GT350.

“Yeah, I think I’ve got a brochure around here somewhere if you’re interested. Excuse me, there’s a fleet customer here who I need to speak with.” I don’t blame him. If I had the chance to sell a few flatbed trucks or Transit vans to a corporation, I doubt I would spend any time talking to the guy who’s waxing poetic about the rumble of a flat-crank V8, either.

I spoke with another gentleman recently who was a partner in a independent used car lot. He told me about a beautiful 2013 E350 Sport 4Matic that he sold to a customer, and how finally getting rid of that car was going to enable him to go buy TWO used trucks at auction that week. “Those things we can really make some money on,” he excitedly shared with me. “People are still afraid of car payments in this economy. It’s much easier for me to move a few used trucks that I can get people into $210-220 payments on than these high-end cars. Those cars have two kinds of customers—over-educated pricks who come in here and tell me how much I paid for the car and how they don’t think I should be allowed to make any money on them, and then the people who don’t have any ability to actually pay for them.”

It’s a tough pill for automotive enthusiasts to swallow, but swallow it we must. Our business really doesn’t matter very much to car dealers. The cars we drool over are often headaches for them—they are often the most viewed car on a dealer’s website, which means that they have to field endless numbers of phone calls and emails about them from “buyers” whose credit isn’t good enough to rent a Popsicle stand, much less buy a performance-oriented car. As a result, a high-dollar, rare car will often take up a semi-permanent residence on a car lot, taking up precious floorplan dollars that could be used to acquire vehicles the dealer will move several times more often per year. And for most modern, sensible car dealers who have given up on the idea of the four-thousand-dollar front-end profit on cars, that’s what matters most to them—how quickly can I turn this car into money that I can go buy another car with?

That being said, the B&B of TTAC are a practical bunch. We often discuss how the most popular articles on this site are not about the launch of some exotic car, but of a new mid-sized CUV or family hauler. We have written more words about the previous-generation Toyota Camry than Melville wrote about whales. Even so, we can be a finicky bunch. We’re convinced that Car X would totally sell like hotcakes if only Manufacturer Y would be smart enough to bring it across the Atlantic for us. Then we go and mock anybody who is stupid enough to buy a new car and, God forbid, finance it.

Is it any wonder, then, that the dealers prefer the poor, ignorant masses, seeking their late-model mid-sized sedans?

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100 Comments on “Bark’s Bites: What You Want To Buy Isn’t What They Want To Sell You...”


  • avatar

    “It’s much easier for me to move a few used trucks that I can get people into $210-220 payments on than these high-end cars. Those cars have two kinds of customers—over-educated pricks who come in here and tell me how much I paid for the car and how they don’t think I should be allowed to make any money on them, and then the people who don’t have any ability to actually pay for them.””

    One of my clients with financial problems told me about how he wants to buy a used BMW 7.

    I did a Captain Picard face palm and replied:

    DON’T Do it to yourself…

    Then proceeded to talk about maintenance costs and issues…

    You might want to concentrate on your 30 year old girlfriend and yourself moving out of YOUR MOM’S 1-bedroom APARTMENT first – so she won’t have to sleep on the couch.

    Listen to me: buy a sensible car with AWD.
    200, WRX, etc.

    “That being said, the B&B of TTAC are a practical bunch. We often discuss how the most popular articles on this site are not about the launch of some exotic car, but of a new mid-sized CUV or family hauler.”

    The average buyer doesn’t have $70,000 – $2.9 Million to spend on a car. I’ve noticed as well that my Youtube views/income are highest on the boring Japanese-made, low-end cars I bother to review.

    I HATE having to talk about the “base model” of a vehicle, but it helps considerably when that Adseense revenue hits on the 23rd.

    You are absolutely right!

    I definitely will video the new Camry, Maxima and other $20,000 econoboxes – on iPhone6+ -since I know everyone LOVES that format.

  • avatar
    87 Morgan

    I believe the current generation Dodge Viper fits the picture you are painting perfectly.

    Awesome car, loads of power, way overpriced, and they litter showroom floors all over the country.

    • 0 avatar
      bryanska

      I wonder if they shouldn’t market these like Sears markets their tools and appliances.

      For many years Kenmore (and Craftsman still does this) would sticker their actual items with the features of the product. So right alongside the Kenmore (or Craftsman) label on the unit, there would be a bulleted list of marketing points:

      “Includes dough hook”
      “Stainless Interior”
      “Belt-driven torque”

      This always struck me as weird. DeWalt saws and Toro mowers don’t plaster their features all over in permanent stickers. I wonder if the Viper can do something similiar:

      “Impresses Wife” stamped into the speedo
      “Never Driven” hood decal

    • 0 avatar
      TMA1

      One Viper is a halo car that gets people to come in and buy Darts and 200s. Two Vipers are taking up one spot too many.

      • 0 avatar
        psarhjinian

        The days of halo cars–or at least halo cars like the Viper–getting people to buy economy cars is long, long dead.

        Case in point: Toyota Camry
        Case in point #2: Toyota Corolla

        The “halo car” at your typical Toyota dealership is the Prius.

        • 0 avatar

          While your comment was sarcastic, there is some truth to it. Someone is hardly going to sign up for a Journey or a Dart because…look at that pretty Viper or Challenger Hellcat they also make, which costs five times as much. So no, halo cars really aren’t that big of a deal anymore. I really don’t think that in the mainstream, people focus too much on a brand or its “mission”, and maybe not even with the luxury brands. By and large, they seem to look at specific cars and judge them on their own merit…not on some six figure impracticality that that automaker also makes.

          *However*, what probably does help sell cars is the attainable performance car. Imagine trying to finance a Charger R/T (which can be had in the $30K-$40K range), but it turns out you can only get approved on a Charger SXT or a loaded Dart. Would you go for it? You just might…

          • 0 avatar
            TMA1

            That’s fair. Last time I was in a Dodge showroom was to look at a Challenger Scat Pack, not the Viper sitting next to it. Presumably I could have been talked into a lesser Challenger.

            On the other hand, the guy who wants to see a Viper in person may show up to gawk, and leave with an awareness that the Dart is a thing. A thing possibly worth buying.

  • avatar
    rdodger

    This is true for sure. People come in to the dealership that have money and want to buy a higher end product and tell us how much they are willing to pay for it. They tend to quote Kelly Blue Book on new cars as well as their trade in. They believe that KBB is the Bible of car buying. If I have a good rapport with them I will ask them to find the ‘print check’ option on the KBB site. At this point they need to be educated on the car buying experience. Not every dealer wants to take your head off, believe it or not.

    • 0 avatar
      smartascii

      I can easily accept that the KBB is not the actual value. What’ I can’t accept as easily is that the retail KBB on the car you’re selling me is thousands of dollars too low, but the trade-in KBB on the car I’m trading in is thousands of dollars too high.

    • 0 avatar

      I’ve had very good experiences with dealerships simply by knowing what I was talking about, but being respectful and not beating them over the head with that knowledge. For the reputable establishments, if you make them *want* to give you a good deal—and your definition of a good deal is actually reasonable and allows them a fair amount of profit—you’ll come out on top. The dealership at which I ultimately bought my new car last year came out with an initial price that I thought was extremely fair, and that was that…

      • 0 avatar
        Dave M.

        Same here when I bought both the Outback and Trooper. I let the salesperson know they get one shot to hook me, both with their knowledge of their product and the price of the car. If they do it, I shake hands and take the checkbook out. And I refer a lot of people to them.

        I desire to reward competence. I want a good deal for both parties because the dealer needs to be there tomorrow to help me with any warranty/recall claims.

        Oh, and litmus test #1 is I want a solo test drive. Here’s my keys and a major credit card – I’ll be back, and I’ll even put $5 of gas in it because I’ll be gone at least 30-45 minutes.

    • 0 avatar
      baggins

      I never tell the dealer what KBB says, I just email 6 or 7 of them and ask for best price.

      Last car I bought listed for 33K. THe offers varied from 31 to 29K – same exact car. I bought for 29. Pretty easy.

      Not sure why I would pay more than the lowest price. It’s a zero sum game – you win, I lose.

      • 0 avatar
        highdesertcat

        The transaction price can vary from dealer to dealer because every dealer has a different level of money they need to make, depending on their overhead, efficiency, turn over, floorplan financing, ranking, etc etc etc.

        What I have found to be very successful is to ask what they need to sell the vehicle for. They get one shot at me because I don’t haggle. They shoot me a price and I either buy it, or I pass.

        I have passed on more than I have bit on.

        The kicker here is, that the buyer has got to be able to walk away. If the buyer starts to whine, dicker and haggle, the salesmanager knows the buyer is hooked, and just reels them in, hook, line and sinker.

  • avatar
    bball40dtw

    The guy that runs the Ford dealership I go to would be happy if Ford only sold the F-Series, Fusion, Escape, Explorer, and Expedition. The Lincoln dealership wishes it could sell ALL the Navigators and everything else used.

    If someone really wants a specific car, they should order it. I’ve done it three times and it’s been a great experience. If you want something crazy, like a manual transmission on a non-ST Focus or Tang colored paint, don’t get pissy about putting down a deposit. Negotiate a fair price before you order. Also get pre-approved for a loan somewhere else, and if the dealership is within a few basis points, give them the finance business.

    • 0 avatar
      ellomdian

      It’s funny – I think much of the TTAC Commentariat could benefit from putting on a nice shirt, calling ahead, and wandering into an actual, brand-name dealership for a few hours and listening to what people say when they walk in the door.

      I have a pretty close relationship with my BMW dealer, and they will tell you pretty bluntly that the masses that walk in to buy a car mostly want volume movers, but that they want to feel special while they are buying it. They have a few top-trim models on the floor, but it’s mostly to catch impulse buyers with new money – their reliable high end customers typically schedule appointments weeks in advance, will often order a car without setting foot in the showroom, and typically only show up in person for the delivery. The guy who walks in babbling about how sweet the e30 was probably isn’t going to have enough credit to test drive the new M3, let alone pay for it.

      • 0 avatar
        bball40dtw

        I completely agree. My last 5-6 car transactions have been painless because I built relationships with the sales people. I don’t want to waste their time, and they don’t waste mine.

    • 0 avatar
      dtremit

      Ah, but the incentive system tends to ruin ordering for domestics — they’re all valid for dealer stock only. So even though it’s easy, and the car’s just going to end up in the dealer’s next truckload from Wayne or Oakville or wherever, you end up losing as much as a 10% discount.

    • 0 avatar
      dal20402

      I know I’ve said this before, bball40dtw, but I wish I had ever encountered a dealer like yours. I think the Detroit market must really be better because of all the customers who are in the industry.

      My experience is that if you suggest to a dealer of a domestic or Japanese non-luxury make that you want to order a car, one of the following things will happen:

      1) They will say “No” because they don’t think it’s worth the time and effort
      2) They will quote you a price that’s MUCH higher than for dealer stock
      3) They will seem so incompetent you have no confidence that you will come out of the process with a car that’s anything like the one you wanted

      The makers themselves also make it hard, with very limited order windows for each model year and byzantine allocation systems that may leave you waiting for months to get your car built if you choose your dealer wrong.

      • 0 avatar
        bball40dtw

        Other dealers should do it like large Ford dealers do it around here. Even before I was able to get A-plan, I made a purchase in a similar way.

        I built a car via the online build and price site. Took the paper in. The salesman went through his order guide and verified everything. We negotiated a fair price that was over invoice but under MSRP, and he ordered the car. I then went to pick it up 8-12 weeks later. The day the car came in, the salesman called, we went over financing, I came in, signed, and picked up my car.

        If I want to order a car now, all I have to do is e-mail him, he’ll e-mail me back a form, and we go through the same process when the car comes in.

  • avatar
    sirwired

    The “ideal” prototypical TTAC reader “practical” car would be a well-maintained off-lease brown manual transmission diesel CamCordIma6 wagon.

    Meanwhile, the people that actually buy new cars don’t want to bother with a stick, hate the color brown in a car, and prefer the ride height and theoretical ruggedness of a CUV over the practical advantages of a wagon.

    • 0 avatar
      Daniel J

      For me, its about the loading height. The CX-5 Loading height is perfect for me at 6’2. I’d have to duck and squat to load something into a Magnum, for example.

    • 0 avatar
      Sigivald

      It is sadly true.

      (I say this from my recent test-drive-y experience.

      Audi and MB offer brown, but don’t actually *stock* it.

      BMW actually had brown in stock, which was impressive.

      Volvo offers on some models, but stocks only tan, which is still an improvement over greyscale not-a-color.)

      (I also want sky blue to come back.)

  • avatar
    Lie2me

    What is this anti “Everyman Who Talks a Good Line on the Internet” day?

  • avatar
    PonchoIndian

    Had a similarly difficult time buying ordering a Firehawk in Feb of 02. Went to almost a dozen dealerships in the greater Boston area. Not one of them even had a Firebird on the lot. Every one of them wanted a markup, and none of them even knew much about ordering the car. I was told to “just buy a WS6” at least 10 times.

    Ended up ordering one from Sewell Pontiac in Dallas for $500.00 over invoice (including the Firehawk package and all the options) and had it delivered to a local dealer for a $200.00 courtesy fee.

    Moral, the trick is it find the dealership who does cater to the enthusiast and do our business with them.

  • avatar
    dwford

    Literally minutes ago my co-worker in the internet department fielded a call about the Hyundai Equus. As she got off the phone we both exclaimed simultaneously “Thank God we don’t carry that car!”

    Give me an Elantra customer any day.

  • avatar

    New car franchise maybe. I find this situation is very much the opposite in the used car market. Stock your inventory according to what YOU know as well as finding the niche in your area. Carry a good selection of those cars and a handful of sleds you don’t like/know/care about but will sell and it’ll ‘work’ more often than not.

    I’ve found my niche to be Wranglers, late-model $9-14k entry-level cars (Fusion, Jetta, C300, 328i, Escape, Equinox), convertibles (Sebrings and Mustangs especially), weird nerd cars only geeks know of like SAABs and a low-mileage Grand Marquis LSE of all things, and late-model Lincolns.

    • 0 avatar
      Sigivald

      This reminds me … what’s with the Sebring?

      I mean, it makes NO sense to me, never had – and plainly eventually stopped making sense for Chrysler.

      Who buys it, and why?

  • avatar
    slance66

    I can certainly say that the 5 of 6 Toyota dealers I talked to or visited were very interested in selling me a 4Runner. They won’t leave me alone. Maybe there are cars they don’t care about, but Trucks, SUVs and CUVs are certainly cars they do care about selling.

    As for sedans, my BMW 328xi, while doing very well in the snow this winter, is a death trap, because I can’t see around any corner anymore with snowbanks 6-7 feet high at a minimum blocking all of them. I wish I had that 4Runner.

  • avatar

    So dealers don’t like educated buyers or people who don’t want to play their stupid games? Who knew?

    If dealers wanted to quickly move niche/performance cars then maybe they shouldn’t put additional markup on them every time…

    I remember when the Chrysler dealer I worked at put a $30,000 markup on a crossfire srt6. Pretty sure it sold a year later for under msrp.

    • 0 avatar
      dwford

      Actual educated buyers are few and far between. More common are people who THINK they educated themselves because the read some car buying advice column or looked at KBB.

      Since most salesmen only end up getting the minimum commission on the sale after a little discounting, they really aren’t interested in making you feel special about your Miata club or getting ground for hours about a $50k car. They just want to get it over with and move on to the next customer.

      • 0 avatar
        Lie2me

        Really? but yet keep you in the showroom for hours twisting your nuts on every little dealer add-on and financing scam they can think of. I’d love a salesman who “just want to get it over with and move on to the next customer.”

        • 0 avatar
          slance66

          Agreed. They need to send me their rock bottom price via e-mail. I’m not wasting my time negotiating in the showroom. Toyota has a new process to do this for Scion all the time.

          • 0 avatar
            PrincipalDan

            I honestly believe that educated salesmen are rarer than educated buyers.

            Most car salesman (especially new car salesmen) I talk to know less about their product than I did when I was selling shoes in a department store to help pay my way through college.

        • 0 avatar
          Garagezone

          For Sure… AFTER getting a price with the “sales professional” MANY a dealer sits you down for at least an hour’s worth of the twisting to get you to buy paint protection, fabric protection, extended warranties and floor mats and an endless litany of BS. Funny thing is, the “paint protection”, fabric protection and a few other things (stripes anyone) have already been applied and you’ll get them without paying if you hold out thru the torture. I’ve been handed off to at least three people trying to sell warranties the last time I tried to buy a Toyota.

          • 0 avatar
            56BelAire

            Sir, “How about ‘rustproofing’, or ‘polyglycoat’, if you want both I can give you a special deal of $499.00…….we can just add it into the financing……it’s easy”.

          • 0 avatar
            Dave M.

            That’s a hugely popular dealer game in Houston (I’m sure all over…), and it’s hysterical the excuses they have about the protections being put on “at the factory”.

            I wonder what the success rate is on folks who don’t know better? The going rate around here for “pad-ons” is $12-1500. Pure profit.

          • 0 avatar
            johnny ro

            My Audi dealer finance guy cheerfully agreed that he was trying to sell me bird shit insurance and did not miss a beat when I said “no thanks” and “lets wrap up here”. He was fake-punching the sales guy and laughing about something before I reached the door.

          • 0 avatar
            DenverMike

            They’ll simply unplug and keep the alarm if you decline it, but leave the harness wired-in. Just get the $24.99 auto parts model, and even if it doesn’t accept female plug they left, the (pre) wires are likely color-coded the same. Worst case, test-light.

          • 0 avatar
            highdesertcat

            “but leave the harness wired-in”

            Many new cars come complete with all the wiring except for the ‘head-unit’ for many optional items like alarms.

            A friend of mine found that out with his 2012 Grand Cherokee Laredo one night when the alarm system went off on its own, while he was asleep in the house and the car parked in his driveway.

            He didn’t have an alarm system, but that didn’t stop the alarm system from going off for some odd reason, honking the horns, flashing all the lights, turning on the radio, waking up his neighborhood.

            Someone called the cops. They showed up at his front door. He told them it wasn’t his car alarm. They showed him it was.

            After about 15 minutes it went off by itself.

  • avatar
    ItsMeMartin

    What you want to buy isn’t what they want to sell you – true, but I would like to point out one thing. While the only thing separating today’s luxury cars from the mainstream ones are the profit margins, the way the process of buying a car is conducted in an upmarket dealership differs significantly from the way it’s done in a normal showroom. Case in point: Volvo vs Renault.
    Volvo:
    “I would like it in pearlescent white (that has been offered for the previous model year only)” “No problem, that can be arranged”
    “Can I get a gas engine in that?” “We have not been allocated any gas engined models of this car this year but let me just call some Austrians, we will trade allocations”
    “I want the steering wheel in beige instead of black” “Beige it is”

    Renault:
    “Hello, I would like to inquire about a Mega…” “We have 2 in stock. Grey and silver. Diesel hatchbacks, both of them” “How about a bla..” “So, which one will it be?”

  • avatar
    JEFFSHADOW

    In the early days of the “InformationSuperHighway” I sold a new 1998 Oldsmobile Intrigue GX to a customer who traded in his Chevrolet Lumina coupe. He persisted in demanding “Blue Book” value for his car. I took him to the KBB website and showed him the values (outrageously high of course) and then told him to push the “cash out” button on the keyboard.
    He could not locate that button. . .
    In 2005 he traded in the Intrigue for a Mazda 3 (for his daughter) and I bought the Intrigue for $1,700. The Oldsmobile was still in mint condition yet $1,600 below KBB wholesale.

  • avatar
    eggsalad

    For $2k down, the Chevrolet dealer will order whatever I want.

    The Hyundai dealer tried to talk me into an Elantra sedan when I came in for an Accent hatch.

    Where am I inclined to buy?

  • avatar
    cdnsfan27

    I sell Audis for a living, we are known as a performance store and sell more R8’s, RS7’s and RS5’s than most stores. We convinced our GSM to order performance variants of our mainstream models and guess what, despite our best intentions they are gathering dust while base level FWD A3’s and A4’s are flying off the shelf. So if you are an enthusiast on a budget call me on my black on black Quattro stick A4 with the sports package and B&O sound. As for making money in F&I stop busting our chops, you refuse to let us make money on the front end so the dealer fee and F&I are our only profit centers. We just had our pay plan changed because salespeople were quitting over $100 minis on $50K cars.

    • 0 avatar
      eggsalad

      All a “salesman” does any more is demo the car, listen to your offer, and say “let me go talk to my manager”. Half an hour, tops. $100 for 1/2 hour’s work seems plenty to me.

      • 0 avatar
        cdnsfan27

        Your comment shows you know little about the luxury car business. Most customers only vaguely know what they want when they come in. My job is to inform and educate so they get in the right vehicle for them. Then test-drive to confirm their choice, brief negotiation, then paperwork, get the car detailed, initialize their Audi Connect and go over every aspect of the car with them. Afterwards stock in the trade, follow up with a second delivery if necessary. It is a lot of work. Most luxury car salespeople average 10-12 cars per month and devote a considerable amount of time to their clientele , it is not as easy as it seems.

        • 0 avatar
          eggsalad

          Obviously not. And that’s why your Manager changed the compensation structure. Now the question becomes: Can the owner make enough money with the new payout to stay in business?

      • 0 avatar
        CliffG

        Yeah, that stupid waitress comes by for about a minute every 15 minutes or so and then wants 20% of the total bill. And I’ll bet she isn’t even a licensed dietician, probably doesn’t know anything about the food really. She should go find a real job, like with the government or something.

      • 0 avatar
        dwford

        Selling a car from scratch to a fresh walk in customer takes a solid 3 hours – from introductions, to qualification to test drive to negotiation, detailing, f&i, delivery etc. The only way to do it faster is to have the car picked out in advance and do the negotiations through email. Even then f&i and delivery process is a solid 90 minutes.

        • 0 avatar
          eggsalad

          Yes, but it is the current dealership model that *caused* that.

          Even if it takes half an hour to find the right car for a customer…

          Then you give the customer an out-the-door price, take it or leave it, and explain financing options.

          Nope. Let’s all waste time haggling, then another half an hour with the F&I guy where I have to say “no, No, NO” over and over…

          Who is wasting who’s time here?

        • 0 avatar
          danio3834

          “The only way to do it faster is to have the car picked out in advance and do the negotiations through email. Even then f&i and delivery process is a solid 90 minutes.”

          That’s about right if things go smoothly, I’ve done deals this way for people. Unfortunately more times than not, something is forgotten or screwed up, usually something that was discussed in detail. I chalk that up to general incompetance and/or laziness.

    • 0 avatar
      dal20402

      You may have slightly misconfigured those performance variants. For close to the same price, I’d take a S4 with no options but sport differential and adaptive suspension in a heartbeat over that S-lined B&O’d A4.

  • avatar
    See 7 up

    A lot of these comments are apparently from dealers/salespeople. Can they please answer the following questions:

    Why is car pricing negotiable?
    Why not price like CARMAX – do your research and state your price, inserting into what the market at the time will bear and how much profit margin vs cashflow you need.

    I HATE haggling with a dealer, its annoying and will always leave anyone with the questions of “what if”. Just state your price and I’ll decide if I want to buy it, just like shoes, food, clothes, anything outside a house

    • 0 avatar
      dwford

      The price is negotiable because it is illegal for the manufacturers to set the selling price of a vehicle – they can only set the Manufacturer’s SUGGESTED Retail Price MSRP. Also, each dealer is an independent business, and independent businesses compete with each other. CarMax can set the price because it’s going to be the same price from one Carmax to the next.

      The solution is simple – just pay the MSRP and don’t haggle.

      • 0 avatar
        eggsalad

        “just pay the MSRP and don’t haggle”

        I love people who say that. It’s as if they’ve never bought a car before.

        I can go into any dealership and offer them MSRP + sales tax. They will laugh me out the door. They want their $2000 for the “Desert Protection Package” and another $400 for DOC fees.

        (Screw DOC fees. Some lady making $15/hr spends 20 minutes filling out forms. Tell me why that costs $400!)

        • 0 avatar
          danio3834

          Agreed, doc fees are hilarious. Just label it what it is, margin enhancement fee.

        • 0 avatar
          bball40dtw

          “Desret Protection Package”

          I see you’ve visited the Jim Click family of dealerships.

          • 0 avatar
            highdesertcat

            Not just Jim Click. Every dealer in the Southwest pulls that scam. A $7.95 bottle of NuFinish with a $1992.05 application charge for labor, done by some illegal alien.

          • 0 avatar
            bball40dtw

            The only dealership I have purchased from in the Southwest is Larry Miller VW in Avondale, AZ. They opened a dealership in Tucson after I moved. It would have saved me the trips up the the Valley to avoid Chapman VW and all of their terribleness. If you go through their internet sales department, they sell pretty much everything for $300 under invoice +$299 for tint. I could get the tint done cheaper elsewhere, but I never cared. I liked the dealership and the people that worked there.

      • 0 avatar
        See 7 up

        That really wasn’t my question. Laws can change and are often instituted for various reasons. What I am stating is why is car buying culture in the US a haggling culture. It doesn’t make sense since we don’t do this with anything else.

        Dealers could, law abiding (or if not, a willingness to change said laws), set the price just as CarMax does – per what they think the market will bear and their financial needs. CarMax is a dealer just like any other.
        Saturn did it as well.

        As for illegality of setting a price – is this really true? It seems they technically set the selling price whenever a contract is signed, correct? Or they set a selling price on any of their advertisements that differ from MSRP. MSRP is just a number. There is no reason it has to or needs to exist. And it doesn’t make sense for it to exist since you can’t even buy from a manufacturer.

        • 0 avatar
          Sigivald

          Nobody’s making you haggle.

          Internet sales departments offer you a set price. And of course you can just *pay the price on the window* without haggling.

          (And price enforcement schemes were held illegal under the Sherman Act until 2007, which the Supreme Court loosened it up a bit – but since they opened it up to a reasonability test, it’s hard to say, facially, whether it’d be held to apply to as regimented and integrated a market as car dealerships.)

    • 0 avatar
      28-Cars-Later

      I’d say it may vary but you probably don’t want to pay the carmax price unless it somehow includes a generous warranty and even then I would hesitate depending on make/model.

      • 0 avatar
        See 7 up

        Although I’ve never shopped at CarMax, their business success has proven what you said wrong. Millions of people apparently like their business model.

        • 0 avatar
          danio3834

          People like the No Haggle Policy because people generally don’t like haggling, but they also don’t like knowing they paid more than any one else. That’s why the “policy” works for CarMax. Every customer gets boned equally, so you don’t have to feel any more taken advantage of than the next guy, and that’s all most people really want.

          • 0 avatar
            See 7 up

            This.
            If you viewing getting shafted as paying a profit margin, then you’ll always feel shafted and frankly I am not sure how you get through life
            The vast majority of people would be happy just to pay the same price as everyone else, subject to obvious market fluctuations over time. But on a given day, most are happy to pay “$x” as long as the guy behind them is also paying “$x”

          • 0 avatar
            danio3834

            I view being shafted as paying any more than I have to. That’s why I don’t buy from places like CarMax. I’ll put the time and effort into finding a better deal elsewhere. For the average Joe who only buys a car only once every 5-10 years, I can see how the convenience factor is worth something to them, though.

            That’s really what you’re paying for at CarMax, is the convenience and selection. The No Haggle thing is worthless as there’s a dealer down the street who most certainly will haggle on an identical car.

          • 0 avatar
            56BelAire

            I concur Danio, decades ago when I was in the business it always bothered me more than a little that a “sharpie” could come in and hammer us for a buck deal on “X” car, then the next day an elderly couple would come in a lay down for MSRP on the same car “sharpie” bought for a buck deal.

        • 0 avatar
          28-Cars-Later

          Business success doesn’t prove anything right or wrong for the customer, it simply proves customers accept the price offered to them. A car is only worth what someone will pay for it.

          • 0 avatar
            See 7 up

            You do realize that a market with “no-haggle” prices can adjust to what people are willing to pay.
            This is the way the market works for almost all items. Plane tickets, clothes, gas, insurance.
            A car is only worth what someone will pay, correct. So you set your price, if it doesn’t sell or you are undercut by someone else, you lower it and hope it sells, just like anything else. No haggling is needed at all.
            Its a transparent price market from a buyers viewpoint, and I believe that is why it isn’t popular with the car sales business.

            As for business success – it proves plenty. It proves that customers like to cater to the business so it is “right” for them (which is a very subjective in and of itself and frankly only relevant to the customer based on what they feel is right)

  • avatar
    CoreyDL

    Selling my 11 year old GS430 caused a lot of people to come out of the woodwork who couldn’t actually afford it.

    Selling my 10 year old A8L caused a lot of people to think it was a Buick, stop and look at it, call me, then bail when they realized it was German.

  • avatar
    sportyaccordy

    Some dealers make things painful when they don’t have to be. I financed my Civic and my wife’s Rabbit. The Rabbit transaction took about 2 hours, I think. The Civic transaction took about twice that, and it’s been a month and they haven’t got me my title yet. This is a high volume dealership, mind you. The guy who did our paperwork insisted on having us dictate our info to him to physically write the forms.

    Regarding the dealer’s conundrum, a more appropriate title would be “What You Want Is What You Can’t Afford Or Get A Pat On The Back For Desiring”

  • avatar
    dal20402

    Bark, the Baruth family is collectively on fire today. First I read Jack’s piece, and then this.

    It’s a good thing for my personal finances that the dealership process makes buying anything except the high-volume product so painful. If it were easy I’d spend a lot more money on cars.

    Recently I compiled a very weird and eclectic list of the new cars I might be interested in buying. (To give you an idea of the scope, it contained, among many others, both a BMW M235i and a Ford Flex Ecoboost.) The only thing all of those cars had in common is that it would be torture to buy them. Not a single one was in a configuration I’d be remotely likely to find on sale at a dealer. And very few dealers, outside of BMW and Porsche, are remotely motivated to help you buy an oddball car.

    I would wonder how many sales the manufacturers lose because of this, but then I watch my neighbors and friends buy cars (always whatever’s on the lot) and I realize the answer is “basically zero.”

  • avatar
    JohnnyFirebird

    My year as a used manager at Volkswagen was weird. The used desire for those weirder cars – manual, cloth GTIs and manual Passat wagons and diesels of all flavours were much higher than new. Car nerds know that these cars are cheaper used, but if no one buys them new they’re harder to find.

  • avatar
    Freddie

    Simple solution for us car guys. Search inventories on-line and chances are you’ll find that turbo/manual you want is gathering dust at a dealer who will be glad to get rid of it. Worked for me when I bought my Chevy HHR SS.

    • 0 avatar
      dal20402

      Depends just how obscure what you want is. I was thinking about an EcoBoost Flex. Looking for one in a dark color with captain’s chairs, the power third-row seat, the sunroof, and the Appearance Package got me… none in the entire country. I could get one with three of those five things, but no more.

      Also, that’s an automatic $500-$1000 extra depending on how far you have to ship.

      • 0 avatar
        bball40dtw

        Dal-

        If you really want an Ecoboost Flex I know people that will order it for you. Exactly what you want. It may take a bit longer than usual for delivery because that plant is running balls out for the Edge/MKX launch.

        I know two people that have that exact Flex. Unfortunately, they are management leases and they can’t sell them.

    • 0 avatar
      pragmatic

      How easy is it to actually search many dealers inventory on line for odd ball configurations and/or colors? Sure Cars.com allows some searching but not all dealers advertise there.

      OEM web sites seem designed to be difficult to search for options. They will allow you to build and price a car then search for it. But the search does not include the car optioned the way you entered it. I want the car with heated seats, no sunroof or navigation first group of cars listed as exact matches have the sunroof (less head room) and navigation (an option I will not be needing). How are these exact matches?

      OK I can order. Last time I tried that (2003 G35 manual, no bose stereo and no rear spoiler) dealer wanted a deposit but would not give me a price or expected delivery date. So I bought the used Lincoln I’m now in the process of replacing.

      • 0 avatar
        dal20402

        There’s not much of a shortcut other than searching every single dealer’s inventory. Start with the high-volume stores in major metropolitan areas and then go from there. If you’re searching for Honda there are few enough dealers that you can do it easily. If you’re searching for Ford or Chevy… well, it’ll take awhile.

        • 0 avatar
          dtremit

          The Ford inventory system can be gamed, if you’re patient. By default it will search your nearest dealer, but there’s an “extended inventory” tab that will show you any dealers within a fairly wide radius (mine in Boston shows cars down to CT and up to ME).

          Of course, since it’s “your dealer’s extended inventory,” it won’t tell you *which* dealer has the car. But it will tell you the VIN, and Google will usually do the rest.

  • avatar
    chaparral

    Want a good example of “insulation from the front lines”?

    The car-buying process for an OEM employee is as follows.

    Walk into the dealership. Ask to see a salesman. Hand him the completed order form with my employee control number at the bottom and the check for the one-pay lease amount. Allow 3-6 weeks for delivery. Return a mechanically shot but cosmetically acceptable car on the return date.

  • avatar
    atl6090

    My Dad is the prick that has perfect business credit, usually leases or buys two vehicles at a time, every two years. He will break a salesman (gopher) until the guy that really makes the decisions shows up. He has even walked out the door with a manager stopping him to bring him back in. Its uncomfortable as hell, but I’m always happy with the payments. Most recently a 2014 Tundra (insane equity in those things), and a 2013 Sienna off the lot. The guy has owned/leased anywhere from 2-10 cars since he was 16 from working his ass off. One of his favorite lines is, “you can make money on the next guy, just not me.” My Dad is an a hole sometimes, but I love him.

  • avatar
    Japanese Buick

    I’ll cop to being part of the problem here, especially given the MX-5 example. When I bought my 2012 MX-5 to replace my 1996 Miata, I started with the “email a bunch of dealers” trick. But since I wanted was very specific with my request, none of the dealers I emailed had it and they all started pinging around for one. Which caused a mini-bubble in blue 6MT PRHT GT MX-5s with tan leather in my region. Any that had one (very few) would refuse to trade them to other dealers I guess because they figured I would eventually come their way and they could get the sale.

    One dealer who responded that they didn’t have it but would work with me quickly figured I was the guy who knew exactly what I wanted and knew more about the car than they did. Their solution to the potential time suck was to ride once with me to verify that I could really handle a stick, then they threw me the keys to one that was similar to what I wanted and told me to take an extended test drive and be back with it before closing time and if I wanted to buy they would find what I wanted. They had to trade to another state for it and I bought it from them for cash for a fair price that they made money on but not a killing, and the day it arrived I was in and out of the finance office in minutes.

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