By on December 4, 2015

005

I come before you today to state a simple truth, a truth that is so obvious that it doesn’t even need to be said, yet it has never been properly addressed. The car franchise dealership, as we know it, is broken.

It’s too bloated. It doesn’t live in the now. It spends far too much to acquire its customers. It doesn’t focus on the things that matter. Some OEMs wish that they could eliminate it. In most cases, it’s owned by a guy whose only achievement in life is having been born to the owner of a car dealership.

It’s also the only business in America that intentionally operates in a way that is frustrating and oppressive to its customers. You could never run any other business in America the way that a car dealership is run. The posted price means nothing. Virtually no two people will pay the same price for a car. Even once the price is finally negotiated, surprises keep coming to the point where virtually nobody is entirely sure if he or she got a fair deal on his car.

But it doesn’t have to be this way. If I owned my own dealership (and, honestly, could I really be any worse at it than 90 percent of the guys who own dealerships?) here’s what I’d do to help my dealership make more money, sell more cars, be more ethical, increase customer satisfaction and loyalty, and even have more fun doing it.

Fire Everybody in the Building

Do you know why all car dealerships appear to be run nearly exactly the same? Because they’re all run by “Car Guys.” Car guys act like there is some mythical, deep magic involved with running a car dealership. Twenty years ago, maybe there was. But today? There isn’t.

Any process that needed a “Car Guy” can be done now, and done better, by software. Need to evaluate a trade-in? There’s software for that. Need to price your new or used car inventory? Yep, there’s software for that. Need to put together a “four square?” You guessed it. There’s software to calculate shop hours and rates. There’s inventory software for your parts department. Anybody who can read a software manual can run a dealership.

If we are going to change the culture at Bark Motors, we have to start by getting rid of the people who established the culture, and that includes all the Car Guys. Sorry, fellas, you’re out. Don’t worry, there are always dealers looking for F&I guys and Used Car Managers. You’ll be fine. But who are we going to replace you with?

Hire a Young, Diverse Staff and Pay Them Appropriately

The average dealership staff can be described with three words: stale, male and pale. Most dealerships are run entirely by older, white men. There’s no reason that this has to continue — we all know that the average customer is far more informed than the average salesperson is about the cars on the lot. The Lot Lifers don’t add any value to the dealership. So why do we need to keep them around?

My classified ad for hiring salespeople would look like this:

Young Professionals Wanted For a CAREER in Automotive Sales!

NO Dealership Experience Required OR Desired.

Work a 40-hour work week, and earn a base pay that will cover all of your bills PLUS a highly competitive commission plan.

Full Medical, Dental, and Vision coverage.

We LOVE College Graduates! Women Are Encouraged To Apply! 

And then I’d watch the applications roll in. Young people can’t shut up about how terrible the job market is, and yet, you virtually never see young people working at car lots — or, if you do, they’re the overweight, khaki-wearing, GED-recipient type. Bark Motors would focus on removing the stigma that college graduates have about working in Automotive Retail. We’d pay more to college graduates— I’d love to see diplomas framed at every desk.

We would have a 50-50 male-to-female ratio on our sales staff. We’d do away with the misogynistic culture of the car dealership and make Bark Motors a friendly and safe place for women to work. We might even set the tone by hiring a female GM — most of the female GMs I have encountered are sharp as tacks and tougher than leather.

Not only would I hire a great, diverse team, I’d keep it by doing exactly what my ad promised. By getting rid of the 20-year, gold-watch wearing boat anchors in the management offices, I’d be able to pay my salespeople real wages AND provide them with opportunities to move up the ladder quicklyI’d appeal to the Millennials’ careabouts by getting the dealership involved in the local community by encouraging them to seek out ways that we could give back. I’d give them rotating weekends off, and I’d mandate a maximum of a 40-hour work week. Working at a car dealership doesn’t have to be a death march, and it doesn’t have to be a place where society’s castoffs work. Not doable, you say, Mr. Car Guy? Like Hell. Enterprise Rent-a-Car can do it. So can we.

In my opinion, this would be the most revolutionary and the most impactful change we could make. But, there’s a lot more that would need to be done.

The $4,000 Dollar Fantasy Is Dead, and We’d Drive the Stake Into Its Heart

We would do everything necessary to turn inventory quickly at Bark Motors. We’d buy an inventory pricing software suite, and we’d live by it. We’d quickly learn what our average front-end retail gross on a car was, and that’s where we’d start our used car pricing — no more trying to load up a car with profit when it’s fresh on the lot. The goal would be 12 inventory turns a year (meaning we’d sell our entire lot every month), and we’d have a hard 60-day turn policy. If a car is on the lot for more than sixty days, it would be sold at auction. We wouldn’t fear wholesale losses.

Used car inventory would be value-priced, meaning that while we wouldn’t necessarily be a one-price, non-negotiating store, we’d price the cars correctly from the outset and discourage discounting unless absolutely necessary. I picture a Progressive Insurance type of scenario, where we would show the customer a list of similar vehicles at other dealerships, and show the customer how our car compared to the competition. Sometimes we’d be lowest, and sometimes we wouldn’t.

New car pricing would start at invoice, minus any factory rebates or incentives. The sole purpose of our new car inventory would be to feed our Service and Parts departments, as well provide trade-ins to our used car department. Trade-ins would be valued fairly, but we wouldn’t overspend on trades to make deals happen, unless we needed to do so to hit our OEM bonuses.

Bark Motors Would Be a Digital Dealership, First and Foremost

According to the National Auto Dealers Association, around 80 percent of customers are doing research online before they visit a dealership. So Bark Motors would assume that every customer is an online customer. We’d have the same pricing on all of our third-party websites (we’d advertise on all of the major players), our website, and on the window stickers.

We would be diligent in using our customer relationship management tools to track our customer interactions, and we’d never assume that a customer was just a “walk-in.” While we would value phone calls and emails, we would also understand that, also according to NADA, most customers do not contact the dealership before arriving on the lot. For those customers who do contact us, we would attempt to conduct as much of the transaction online as possible and reduce the amount of time that they spent in the dealership, but we would not engage in self-negotiation — the pricing on the website would remain the sale price.

Not only would we ask where customers saw our cars, we’d ask where they did all of their research, including those customers who don’t buy. This would help us understand customer buying behavior and focus our efforts in the places where our customers prefer to study up.

Bark Motors wouldn’t spend a single dime on traditional, expensive forms of advertising, such as television or radio, unless it was funded by manufacturer co-op dollars (which are earned by selling new cars). We’d focus on the advertising media that targets in-market shoppers, rather than large swaths of the public who may or may not be interested in buying a car. We’d take our savings from eliminating that advertising and use it to cut the margins on our cars.

The Sale Would Revolve Around the Experience

I would implement an “up system,” so that customers wouldn’t be treated like chum in a shark tank — customers would be treated as guests, not enemies. We’d do our best to get the entire process completed in less than 90 minutes, including finance and delivery and we’d incentivize our sales reps for making that happen. We’d invest real money into a children’s play area, and we’d update the videos, games, toys and furniture semi-annually.

Salespeople wouldn’t specialize in new or used cars, they’d work the entire dealership. We’d focus on having our salespeople build relationships with customers, and we’d be as transparent as possible throughout the process. The computer screen on the desk would never face the salesperson — it would be placed where the customer and the salesperson could see all the numbers.

Since CSI scores are so incredibly important to franchise stores, I would ensure that no customer ever had a reason to ever give us less than a perfect score. While we’d focus on an expedient process, we’d also focus on providing outstanding customer service. If a customer chose not to buy from us, a manager would be sure to follow up with the customer to see what we could have done better to gain that customer’s trust and, ultimately, his business.

The Finance Office Would Stop Being Mysterious

Lastly, the customer would have one ambassador throughout the whole process, rather than turning them over to managers. The sales rep would walk the customer through their trade-in, their financing, and their delivery. No more “going to the manager” to discuss a deal — we’d have an open sales floor with no closed doors. No more long, awkward silences for customers. They’d have a friend throughout.

In the financing process, customers would be provided a copy of their credit score and a list of financing options. No more burying customers in order to make back-end profits. While we’d still want to make the F&I office profitable, it would no longer be a place to confuse and mystify customers. We’d ensure that the payments were within the customer’s stated comfort zone, and we’d offer only the best and most reputable insurance and warranty products.

So … is this Fantasy?

I don’t think so. Most dealers around the country are doing some of these things, but none that I’ve encountered are doing all of them. As long as the retail car business continues to be the incestuous mess that it is, with the majority of dealer groups owned by second- and third-generation car dealer families, it will be tough to break the mold.

However, I truly believe that the first dealership to fully embrace the new, customer-focused model I’ve described here will have an opportunity to break free from the pack. There are other items to address (inventory mix, lot size, the building itself, service and parts departments), but the customer experience is the one thing that dealers can nearly completely control, and yet, it appears to be the one thing that they focus on the least. Everything else is secondary until we fix the way our customers feels when they walk out of those doors.

So, tell me; would you shop at Bark Motors?

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211 Comments on “Bark’s Bites: Here’s What Bark Motors Would Look Like...”


  • avatar
    sirwired

    Whenever the question of why state law PROHIBITS manufacturer-owned dealerships (which would solve a lot of these problems), somebody inevitably states “Well, OEM’s couldn’t possibly be any good at it, Because Reasons.”

    Yet they never state why the supposed impossibility of a company doing something in a profitable fashion requires legal enforcement, or what the harm would be if an OEM tried, and failed, to run a profitable dealership. It would be utterly impossible for me to make a living as a pro-football linebacker, yet there’s no law stating that somebody as scrawny as myself is forbidden from the position.

    Right now, dealerships can abuse customers with few limits and the franchise laws keep dealers from doing something about it.

    Does the franchise-owned dealer structure also feed into what a PITA it is to special-order cars these days?

    • 0 avatar
      bball40dtw

      Ford tried, and failed to run profitable dealerships, even during the late 90s SUV boom. GM failed before that. Jacques Nasser had Ford doing everything except for making quality products. It’s better to focus on what drives profitability. For auto manufacturers, that doesn’t include running dealerships in the US.

      Now if Tesla thinks that’s their best course of action, fine, they should be allowed to do it.

      • 0 avatar
        ajla

        I don’t even want manufacturers to run dealers.

        I just wish I could legally order a car direct from the manufacturer at MSRP with the exact options I want and have it dropped off in my driveway without having to hassle with the typical car dealer stuff.

        • 0 avatar
          sirwired

          Well, I understand the idea of a showroom anyway. No matter how much research you do on a car, there’s no substitution for sitting in one in person and making sure it feels right for you.

          • 0 avatar
            ajla

            There are ways to sit and even drive cars without visiting a new car showroom.

            Auto shows, manufacturer sponsored ride events, rentals, Carmax.

            Plus with a lot of enthusiast vehicles (Corvette, Hellcat, STI, GT350) most dealers don’t allow test drives anyway.

            There are certainly reasons to have brick and mortar stores. I just wish I had the option of avoiding them.

          • 0 avatar
            stuki

            For some people.

            Others, not so much.

            Heck, some people are fine with buying a bloody wife without meeting her first…….

            There’s nothing a priori wrong with a franchise dealership. Chances are, it serves a good portion of the buying public well. What is wrong, is the lack of other ways of buying a car, for the remaining portion(s).

    • 0 avatar
      PeriSoft

      “Does the franchise-owned dealer structure also feed into what a PITA it is to special-order cars these days?”

      This was the thing that honked me off the *most* when I was car shopping. I could go to Ford’s web site and make the perfect Fusion at a price I could afford. None of them actually existed, and if you special order, you lose all the incentives, so the price goes up by three or four thousand bucks.

      I ended up with a Sonata because while I wanted a Fusion more and *the car I wanted* was better, Hyundai was the only company that delivered a car I wanted to drive to a dealership. With Fusions it was either $18k fabric-and-four-speaker-stereo specials or a $40k AWD Titanium monster with special pearl paint that was twelve grand out of line.

      I’m still not entirely sure why these online car configurators exist except to show you something you can’t get unless you wait two years and scour five thousand used car ads.

      • 0 avatar
        gasser

        +1 on this. In October/November had the same experience pricing and looking for a Ford Fusion SE Hybrid. Good luck with that. Most fusion hybrids are Titaniums with that $500 paint job and a list of options that I neither understand nor need. Most of the inventory here in L.A. seems built to whatever is the current special of the month and if the in stock model had a $195 extra, your price goes up by thousands.
        P.S. I am still driving my 7 year old Lexus because of this business model.

      • 0 avatar
        bball40dtw

        You don’t lose the incentives. You get whatever the incentives are at delivery. At least that’s what happened when I ordered by C-Max and Focus ST.

        • 0 avatar
          indi500fan

          Agree…it doesn’t fit everyone’s buying schedule, but the incentives typically max out as the model year wraps up. If you order near the “closeout” date for the particular factory run, you’ll be pretty well assured of getting the best incentives.

          • 0 avatar
            bball40dtw

            Right. And if you want something specific, you should be okay with paying near MSRP – incentives. You aren’t going to get the “best deal” by ordering something.

          • 0 avatar
            matador

            Agreed- you get the best deal on the “ugly ducking”. We bought a new 1992 F250 for a great price, because it was ordered up custom as a nice XLT with tutone, and had a lot of power goodies, but it had manual 4×4 hubs and was a regular cab with a 351.

            If nobody wants it, you’ll save. If everybody wants what you want, the dealer won’t budge much, if at all.

        • 0 avatar
          Scoutdude

          It depends there certainly are incentives with the *(must take retail delivery from dealer stock by 00/00/00).

      • 0 avatar
        raph

        Odd, I special ordered a 2015 Mustang GT, albeit through their X-plan and also recieved a 500 dollar rebate at the time.

        I configured the car like I wanted, Figured the the down payment and considered what Ford would finance me for over the time period I wanted then showed up at the dealership. It all went off without a hitch.

    • 0 avatar

      RE: “Whenever the question of why state law PROHIBITS manufacturer-owned dealerships (which would solve a lot of these problems), somebody inevitably states “Well, OEM’s couldn’t possibly be any good at it, Because Reasons.”

      They first say, state law isn’t what prevents OEMs from being in the retail business. Its their own franchise agreements. Your thinking begins with an erroneous assumption, and declines from there.

  • avatar
    NoGoYo

    Maybe someday I’ll be able to afford a car from a dealership.

  • avatar
    MrGreenMan

    I think you may overshoot the mark with the employee arrangement, as you’re drifting into “no commission” territory. If you have a sales staff with the base pay being too plush, it’s like having no commission incentive at all, and then you get either the Best Buy or the Saturn Dealership experience: Customers are inconveniences that interrupt the latest story in the break room.

    I know that it was Providence working to keep me from buying it, but I went to a Saturn dealership to buy a Sky Redline once. I came back a couple times. Nobody cared on the sales staff. You want a test drive? Oh, we aren’t doing test drives this afternoon. I had my then wanna-be-professional Dockers and polo shirt on, and my checkbook with me, but nope – no interest at all.

    The youngest member of the staff talked to me – but she didn’t know anything about the car other than, you know, people seem to like them, they look sporty.

    That said, my last used car purchase sounded a whole lot like this experience; I’ve seen the finance guy mystery mumbo-jumbo, and it certainly wasn’t that this last time around – my sales guy even sat in with me, even though he didn’t say anything. I’ll shop there again. Called me once a week thereafter to ask if I was still happy with the car; didn’t try to upsell anything more.

    • 0 avatar
      FreedMike

      Yes, you will get some people who will slack off, but keep in mind…this is 2015 and good paying jobs don’t grow on trees. Can the slackers and everyone else will get the message. Or maybe institute a bonus program based on a number of metrics (sales, customer service scores, etc).

      By the way, have you been to Best Buy lately? You get asked umpteen times if you’ve been helped. Honestly, it’s annoying.

      • 0 avatar
        CoreyDL

        I don’t go to Best Buy, because I can order the thing I want from Amazon for 25% less, not deal with a salesman, and have it presented at a box at my door.

        If Amazon fails, NewEgg will have it.

        • 0 avatar
          krhodes1

          But with rare exception, you can’t get something from Amazon RIGHT NOW. And sometimes, I need a computer bit RIGHT NOW, not two days from now with free shipping. Also hard to fondle things at Amazon.

          Though I agree, the Smurfs are annoyingly friendly these days.

  • avatar
    MrGrieves

    I absolutely would shop there. But the good ol’ boy dealership culture is too deeply ingrained and protected by franchise laws and car dealer special interest groups. Especially in the deep South. I’ve seen incredible displays of abuse to customers from all makes of car dealers. I’ve seen some racial diversity, but never a female sales or finance person.

    The only “business” that abuses its customers more is the health care industry, but that’s a whole other can o’ worms…

    • 0 avatar

      And the beauty of it is if you get “abused”, you can keep looking until you find a dealer who satisfies you. That’s the market at work.

      AGAIN, it isn’t franchise laws that “protect” dealers, it is the Sales and Service agreements they sign with their supplier BEFORE they make a multi million dollar investment.

      • 0 avatar
        dal20402

        Except when you have one dealer in your city and the alternative is 200 miles away. Or when the bad dealer has the one example of the car in the country that’s configured the way you want it. I can’t believe you spend so much time and effort defending a system that doesn’t even bother to disguise its regulatory license to seek rents.

      • 0 avatar
        stuki

        So, since franchise laws don’t do a darned thing, why not just get rid of them?

        Tesla sure wouldn’t mind.

        And neither would most car buyers.

  • avatar
    FreedMike

    Sounds a lot like Carmax, to be honest.

    Worth noting – in my recent car shopping experience I saw a widely divergent set of standards. Some dealerships worked a lot like Bark Motors, others were old school.

    But 30 years ago, they were ALL old school.

    So…some progress is being made.

  • avatar
    gtemnykh

    Nice ideas in concept, a local dealer did the no-haggle price, non comission, non car people sales staff and it wasn’t anything special. Particularly frustrating was dealing with guys my age (in one case literally a kid I went to high school with) who were just last week working at Best Buy with a similarly complete lack of knowledge about the products they were selling. Absolutely clueless about the cars they were selling. If you were doing something for a living, wouldn’t you take a slight interest in mastering the “subject?” Carmax is basically what you’re describing, and my experience with them has likewise been mediocre.

    Recently, I test drove an Outback with a “stale, male, pale” sales guy and he knew EVERYTHING about the Subaru inside and out. I’m so used to knowing more about the car I’m test driving than the sales drone that I was initially taken aback, but ultimately very satisfied with the experience. He was friendly and not pushy at all, but was a commissioned guy.

    • 0 avatar
      bunkie

      Way back when I sold hi-fi gear, I was that salesperson. I was passionate about the product and genuinely hated seeing customers walk out with less than the best gear in their price range. I was once lambasted by the owner for selling a certain model of speaker (the best one in the place) because it didn’t have the margin of some more well-known models. I had the second-best sales record of all the staff. The guy with the best record? He was a pushy, spiff-driven a-****. His return rate was awful. Mine was so low that there was no comparison. Bottom line? I may not have made the most immediate money for my boss, but I did wonders for his reputation. I repeated this when I sold Apple IIs for a Boston chain. The other stores referred their tough customers to me because I really knew how to solve customer problems and answer deep questions. Really good salespeople are worth their weight in gold. I ended up starting a nice little consulting business once I left.

      So, to answer the question? I would probably buy at Bark’s Motors.

      Postsript: I just brought my CTS into the dealership for an inspection and a small warranty repair (fog light switch). I got a quote for the almost $250 for a fuel system cleaning, $80 to replace the air filter, a $240 rear diff fluid change, a $140 cabin-filter replacement (part cost on Amazon: $14, installation difficulty: 15 minutes), and about $150 for a brake fluid flush. Almost $900 in total. It came with a hard sell. It’s no wonder people defer maintenance at these prices. Next weekend it’s two hours to do most of this work myself for a total investment of $120 in fluids, parts and a tool to fill the rear diff.

      • 0 avatar
        Truckducken

        Hey, don’t knock that dealership: they’re just following the Benz/Bimmer service model to the letter!

        • 0 avatar
          redmondjp

          When you understand the fact that it is the service department that keeps most dealerships profitable (not selling new cars), this makes perfect sense.

          • 0 avatar
            bunkie

            Oh, I do understand it. I simply choose not to participate in being the shearee whenever possible.

            Despite my being a Cadillac fan, owning one and having to deal with the local dealerships here in Manhattan is a miserable experience. It’s really criminal and if Cadillac really wants to sell cars here, they need to open a bespoke dealership with a much higher level of experience quality. One need only visit the BMW, Mercedes and Audi dealerships on 11th avenue to see how it should be done. All three of these facilities are exceptional with the MB dealership looking like something out of future utopia. No Cadillac owner should have to wait in a grungy, ill-located, no-seating room in a building located in a place that would double as a set for a post-apocalyptic movie set.

          • 0 avatar

            This is a common misnomer. If you understood how the accounting is done, you’d know better.

      • 0 avatar
        krhodes1

        @Bunkie

        I was you at the start of my career, running the business machines dept at the local Staples. Other stores would send their difficult folks to us to deal with.

        Service is where the money is. Particularly these “flat rate” services. My BMW dealer gets $150 to do the cabin filter out of warranty – yeah, right. I was quoted $225 to mount and balance four snow tires a couple weeks ago.

        As I have said before, once out of warranty and I am paying, my cars will never darken the dealer’s door again. I don’t need a loaner, and I don’t like their cappuccino that much.

        I do give them credit for quickly learning that the upsell was lost on me though – no, I am not paying $225 for a tire rotation and alignment on a car that tracks like a TGV. Nor am I paying for anything that BMW won’t pay for under the maintenance coverage (though I will DIY it). They tried the first time or two with my 2011. Helps that they have assigned service advisors so I always deal with the same person every time.

    • 0 avatar
      sirwired

      A no-commission outfit with terrible sales people is more a function of poor hiring, poor training, and insufficient pay than it is a direct result of the no-commission model.

      Ignorant commissioned sales people don’t generally last as long, because they have more difficulty closing sales (although there nevertheless appears to be no shortage of those guys), but ignorant salaried sales staff must be trained and/or fired.

      (And even a “no-haggle” dealership still sends you through the trade-in and finance gauntlet, even if the price of the car itself is “flat”.)

      Really, the reason why dealerships have stuck with the customer-unfriendly model is because sticking the screws in customers isn’t very much fun for anybody involved, but it IS profitable.

      • 0 avatar

        To pay a good wage you have to make profit, something auto buying consumers are resistant to pay. If you want to prove this to yourself, just advertise your triple net cost and negotiate the margin. You’ll then see what consumers really think. First, the vast majority don’t understand business, but think they do. After all, its easy, just like running an auto dealership. Just give the consumers what they want and let the dollars roll in.

  • avatar
    indi500fan

    I had an interesting experience at a newly opened Kia dealership last year.
    The store is owned by a group of black guys, and nearly all the sales people were bright smiling young black and Asian guys and gals. The only problem was when it came down to getting the “final” price, my wife and I were led to a walled-in office near the back of the showroom where a 50 something white guy with all the annoying stereotypes we associate with painful car buying took over the process. Needless to say we walked out pretty quickly.

  • avatar
    01 Deville

    No offense meant, but some of that I will do this, I will do that read like a transcript of Trump Hyperbole. Gratifying to hear, but not very believable.

  • avatar
    ajla

    “So, tell me; would you shop at Bark Motors?”

    1. Are you going to have a dealer fee? And if yes how much?

    2. Are you going to add things like pinstripes/nitrogen tires/roadside assistance equipment to every vehicle?

    3. What is your service center going to be like?

    • 0 avatar
      S1L1SC

      This is it right here – I was ready to buy 6 weeks ago, and had a deal worked out until:

      1) One vehicle in the color I wanted on the entire Easter seaboard. Had leather seats, so the price would have been an extra $1,500. This wasn’t the deal breaker though.

      2) $899 dealer documentation fee. Plus an additional $330 for tax, title and tag (I don’t mind paying tax, title and tag, but in my opinion that is part of the documents… especially if you are charging me almost $900 extra…)

      3) $1000 surcharge for using outside financing – That should have been disclosed up front. Plus their interest rate was a good 7% higher and 12 months shorter than my bank approved rate.

      4) Incentives would have changed by the time a consumer-special order model would have arrived.

      I ended up walking out.

      If nothing else you should be able to lock in a price and incentives at the time of ordering a vehicle if they do not have what you want on the lot – but until the manufacturers get a clue on that…

      • 0 avatar
        dal20402

        “If nothing else you should be able to lock in a price and incentives at the time of ordering a vehicle if they do not have what you want on the lot”

        This. Unfortunately, dealerships, which for the most part are more interested in churning their inventory, would fiercely resist anything that makes special-ordering easier.

    • 0 avatar

      He’s not going to try to make money, so you’d better buy something that doesn’t need to be warrantied or serviced by Bark Motors, because they won’t be around long.

  • avatar
    28-Cars-Later

    I honestly don’t know how I would do it today, and I’m aware enough to know there is a breadth of difference between new and used car shops so I really don’t know how the newbies operate vs what I did. However I will point out something in your thinking which is incorrect: while you certainly should consider all candidates which meet defined criteria, you should *not* go out of your way to create a Model UN which is what it sounds like you propose. Not only is this discriminatory, and under lawsuit you *will* have to demonstrate how you choose one candidate over another, there are products in the talent management space which help in finding the best candidates using psychology:

    https://www.kornferry.com/products/talent-selection/selection-assessments

    http://www.ddiworld.com/product-guide/selection-and-assessment/interviewing/targeted-selection

    https://www.calipercorp.com/products-and-solutions/pre-employment-assessments-3/interview-guides/

    If you are building a new multi-million dollar car shop from scratch and will hire 50+ employees, it makes more sense in the long run to use an assessment method. Bark’s Used Cars down on the corner with <5 employees and <20 inventory is more likely to get away with the discrimination you propose.

  • avatar
    dwford

    I haven’t laughed so hard in a long time. Not sure if this piece was meant to be comedy or fantasy. Bark’s Motors would get wildly crushed by those evil car guys in both sales and profit, and Bark’s would be the Best Buy of cars in the neighborhood – where people go to look, but then go buy at the cheaper evil car guy store.

    Are there shady aspects of the car business, and do people get taken advantage of? Yes, definitely. But even the most straight forward and open car salesman is working the emotional angle, looking for common ground with the customer, and presenting the customer with information in a way that the customer will accept so as to make the sale. Much of the hated negotiation in a car dealership actually happens between the salesman and the sales manager, and between the finance manager and the banks. THAT’S how many deals get done that otherwise couldn’t.

    A car salesman’s job isn’t to be coffee runner, daycare provider, or financial advisor. The car salesman’s job is to assess the customers needs and wants, figure out what financially the customer can afford, and find the right car and the right financing for that customer. There is a skill involved. Sadly, the down and out types who typically need to scramble and negotiate in other aspects of their lives can make most successful salesmen.

    Every industry has developed their own idiosyncrasies. Why, in real estate, do the agents not openly tell buyers what the other offers actually are? No price transparency there either, and people end up over paying for houses every day. No price transparency in retail either. People overpay at stores all the time. It’s the consumers job to seek the best deal. If they don’t then that’s on them.

    • 0 avatar
      olddavid

      Bark has reached his Peter Principal limit. Idealism has had this model since 1960. It always gets fed its lunch by the sharks. I guess America has voted with its wallet and feet, because the Bark point will have its floorplan pulled on day 120.

      • 0 avatar

        That’s ironic that you misused “principal.”

        • 0 avatar
          olddavid

          You did get the point, though, I hope. Idealism and the Hall-Dobbs Management system went head to head in the late 1950’s and early 1960’s. The fact that all of you know what a four square sales technique is tells who “won” that battle. The “principle” of mass market system sales has numbers on their side. I retired early because of this when transferred back to the US. I had to look myself in the mirror everyday.

      • 0 avatar

        I doubt it would take that long. If the lender understands the business plan, poor Bark will probably have to pay cash for his inventory. Bankers tend to be pragmatic rather than idealistic. If you don’t have a track record of success, you probably won’t get a banker to back you.

        Here’s a couple of “Old Davids” who think alike on this issue. I grew up in the business at Moral Motors. This stuff is nothing new. One Price? The illusion of “Transparency?” But now, anyone who can read a software manual can run a dealership. It must be easier now than decades ago?

      • 0 avatar
        Lou_BC

        The old Hawk and Dove theory.

        Doves do fine with other doves but throw a hawk in the mix and it all falls apart.

        In business hawks with hawks is the dominant model because every one assumes everyone is out to kill them. There would be no ‘con’fidence men if there was no trust.

        Sad but true.

        • 0 avatar
          Lou_BC

          “Bark Motors would get crushed by consumers.. more actually drowned by consumers pissing on his leg, taking Bark’s price quotes to competitors.”

          Human nature unfortunately functions at a primitive level. There are those that would slit “Bark Motor’s” throat to save a dime and dealerships would slit one’s throat to make a penny.

          That doesn’t mean “Bark’s idea/ideal is wrong because it cannot compete.

          That is like saying DAESH is a superior form of Middle Eastern government since no one can compete with it for long without outside political interference.

          Once again ruggles defence of the current system boils down to “the ends justifies the means”.

          “And there’s hungry children in the world too.”

          Ever wonder why?

    • 0 avatar

      RE: “Bark’s Motors would get wildly crushed by those evil car guys in both sales and profit, and Bark’s would be the Best Buy of cars in the neighborhood – where people go to look, but then go buy at the cheaper evil car guy store.”

      Bark Motors would get crushed by consumers.. more actually drowned by consumers pissing on his leg, taking Bark’s price quotes to competitors.

      RE: “Why, in real estate, do the agents not openly tell buyers what the other offers actually are?”

      Because it is non of the other buyers effing business.

      RE: “No price transparency there either, and people end up over paying for houses every day. No price transparency in retail either. People overpay at stores all the time. It’s the consumers job to seek the best deal. If they don’t then that’s on them.”

      First, you need to define “over paying.” Most consumers don’t have any understanding of what a business needs just to exist. For example, if you ask consumers if a dealer is entitled to a return of 10%, most consumers say “YES.” When you ask them if a dealer is entitled to a $3K profit, they use terms like “thief,” “robber.” etc. Well, $3K is 10% on a $30K vehicle and the cost of sales has to come out of that. Facility, Rent or mortgage, property taxes, insurance, interest on a LOT of money for capital loans and floor plan loans, and then the BIG ONE, STAFF! Porters, office staff, janitorial get paid before sales people and managers. Then there is advertising. Do you think all of those websites, and their upkeep, are free? How much is left after the expenses are taken out of the $3k? What is the total return on capital investment? Is it anything an auto OEM would have an interest in given the massive capital involved? What do you think dealers came into being in the first place? Answer: The auto OEMs needed their capital, experience, and local connections.

  • avatar
    Pch101

    The customer who is intent on negotiating would find another dealer who would undercut you, while you would be forfeiting the profits that you could have taken from the overpayers who would have helped you to keep the customers who pay less.

    The airline industry knows this. The full fare customers provide the profits, but there aren’t enough of them to allow an airline to ignore the bargain hunters who are needed to use up the excess capacity and cover the overhead. A car dealership isn’t that different, it just feels a lot nastier.

    • 0 avatar
      bball40dtw

      Ain’t that the truth. American Airlines earns 50% of its revenue on 13% of its customers!

    • 0 avatar
      dwford

      Or the banks, who make the majority of their profits from fees, not lending

    • 0 avatar
      Toad

      The Bark Motors model assumes that all customers are nice, honest people that have done their homework and are just looking for a clerk to help them into their new car. Sort of like the rental counter at Enterprise.

      However, the Bark’s Safe Space Motors concept starts to come apart when the customers are forgetting that their trade in’s motor oil has 50k miles on it, their 580 FICO score, their plan to buy a champagne pickup on a malt liquor budget, or that their plan is to take your price/trade offer and shop it to every dealer in a 50 mile radius.

      Bark’s Safe Space Motors assumes a nice, properly diverse, financially secure person swapping one nice car for another. In reality it is more like his brother picking up another car and promising to treat is gently over the weekend. We know how that works out.

  • avatar
    thelaine

    You are all wrong. Dealers are awesome. If you get screwed, it is your fault. Grow up.

    – Ruggles

    • 0 avatar
      bball40dtw

      Ruggles is NADA’s Mothra. Somewhere, dealership personnel are singing the prayer that summons him.

    • 0 avatar
      FreedMike

      +1

    • 0 avatar
      Drzhivago138

      I’m completely out of the loop here. Who is Ruggles?

      • 0 avatar
        bball40dtw

        https://www.linkedin.com/in/davidsruggles

        He used to be someone that commented on TTAC about dealership matters. He had the habit of not responding to someone by clicking the reply button, but making a thread down the page. He also sees no faults with the current dealer model and has no issues with any sales tactics that car salesmen use.

    • 0 avatar

      Actually, all dealers aren’t awesome. If they are lacking, the market will rid us of them. BUT, if you get screwed, it is your fault. Grow up and get over it. But first, you might need to define “screwed.” Hosts of consumers who were treated well think they were screwed simply because they don’t understand business.

      • 0 avatar
        Lou_BC

        “BUT, if you get screwed, it is your fault.”

        Um, that used to be a common defense in sexual assault.

        ‘The bitch had it comin’

      • 0 avatar
        Scoutdude

        And lots of people who think they got a good deal got screwed. Probably less than back in the day but they are still out there and there are enough of them that the crappy dealerships can survive.

        • 0 avatar
          Lou_BC

          Scoutdude – agreed.
          Ruggles saying that people should just report fraudulent dealers is true but for a guy who allegedly has a degree in “behavior” that isn’t how people tend to work.
          a. How do you file a complaint if you aren’t really sure how you got screwed or how much were you screwed?
          b. There are differences between what is legally correct and what is morally or socially correct.
          c. As you pointed out, some have no clue that they got screwed.
          d. Like sexual assault many are just too embarrassed to report.
          e. A local dealer in my town got in trouble several times for “deceptive and misleading” sales and advertising practices. How many people were fleeced before someone complained? Myself and several friends were exposed to those practices a few times when pricing out vehicles but as Mr.Ruggles stated “just look around until you find a dealer that keeps you happy.” Many people are accustomed to sleazy car sales practices and just shrug it off and move on.

  • avatar
    Highway27

    One thing I’d like to see is with the customer surveys: Either make them have a meaningful range, or make them pass/fail. That means get away from the stupid “Everything must be 5 stars!” When I have an interaction with a dealer now, I don’t want to fill out a survey. Maybe it wasn’t 5 stars. Maybe it was good, but not exceptional. Maybe it was 4 stars. But that’s not an indictment of the dealership or the service department or whatever, it’s that normal interactions aren’t stupendous. I’m perfectly happy to take my car in for an oil change, get a shuttle ride to work, find out that the work was done on my car, get a shuttle ride back, and go on my way. I don’t see why there’s any reason for that to be ‘5 stars’, nor for there to be pressure for me to claim it is.

    And honestly, I don’t want to have a service manager call me to find out why I gave you a 4 for something. I’m busy, they’re busy, why waste time on that. Nobody has an expectation of perfect, spend your time on the things that get BAD reviews.

    • 0 avatar
      Pch101

      “I don’t see why there’s any reason for that to be ‘5 stars’, nor for there to be pressure for me to claim it is.”

      The manufacturer will punish the dealer by withholding cash for ratings that are below 5 stars.

      • 0 avatar
        Highway27

        I know that. And that’s a stupid reason. That’s what needs to be fixed. Maybe it’s not something that a dealership can do anything about, but it puts bad pressure on everyone, because it’s entirely unrealistic. Why have 5 stars if it’s pass/fail? Make it Pass/Fail, or make it so that the rating has some meaning. And don’t punish the customer AND the dealership by having all sorts of follow-up nagging.

        “What could we have done to make you give us 5 stars?”

        “Get rid of the stupid 5-star rating system if 4 is a failure.”

        • 0 avatar
          Pch101

          Anybody with half-of-a-brain at HQ should know that a dealership that is supposedly adored by everyone is gaming the numbers. These surveys don’t make much sense if the goal is to measure and compare performance.

          However, the purpose may be to **motivate** dealership performance, not to measure it. The actions that the dealership needs to take in order to convert the less-than-perfectly-happy customers into five-star voters is what is desired by the manufacturer. Withholding cash for perception is about the only tool that the OEM has for influencing dealership customer service.

          • 0 avatar
            Lou_BC

            I had a salesman almost beg me to give him a good rating on the satisfaction survey.

            Are you f^ckin’ kidding me?

            The guy was a clueless moron who contributed zero to the sales transaction other than finding the keys to the truck.

            If it wasn’t almost exactly what I was looking for the price I was willing to pay I would have told the guy to drive it up his ruggles er azz.

          • 0 avatar
            Pch101

            Give the dealership a one-star rating on the survey, and see what happens next. That’s what I’m talking about.

            If you haven’t bought a luxury car, then you wouldn’t know about this.

          • 0 avatar
            Lou_BC

            Pch101 – I got a follow up phone call as to why I gave a poor rating to the salesman.

    • 0 avatar
      MBella

      I agree with you Highway. Mercedes had a 1-10 system. A couple of 9s killed your survey, even though most people think they are giving you a good score. They also have a question asking if someone at the dealer explained the survey to you. That yes or no would drop your survey below the acceptable range. When I tell someone that’s never been involved in the dealer business that unless they give top marks for everything on the survey, you are failing them, they are always very surprised.

  • avatar
    SCE to AUX

    I’d shop at Bark Motors. Experience is more important to me than price.

    But I think some people tolerate the traditional dealer experience because they think they can get a better deal. Perversely, some people trust it, because it’s ‘known’.

  • avatar
    ChicagoDave

    Almost point by point this describes the CarMax business model, though obviously only for used cars. No hand offs to sales managers, no finance department or managers, a focus on customer experience, a deep online experience, etc. And probably the most diverse workforce in the industry.

    What surprises me is that more haven’t copied this approach. It’s hard to break really old, entrenched habits. And you’re right that an Old Boy’s Club certainly exists in a big chunk of the industry.

    • 0 avatar
      CoreyDL

      Doesn’t CarMax just result in too high prices for the average used car shopper who’s -aware- of what they’re doing? Every time I’ve ended up looking at a CarMax car, it’s been overpriced.

      • 0 avatar
        28-Cars-Later

        F*** Carmax. You only get a 30-day warranty and have to buy “MaxCare”. Oh but its 125pt inspected? So is every other CPO in existence. So you rape me on the “no haggle” transaction price and then stick it to me on the extended warranty? Oh and who buys the paper on the extended warranty? Why can’t I just go to the dealer for a CPO where I have a shot at negotiating the transaction price and maybe have an extended warranty included? F***ers.

      • 0 avatar
        ajla

        Carmax cars are priced higher but they do tend to have better upfront quality than what you find on franchised lots and WAY better quality than the biohazrds on nonfranchise lots.

        • 0 avatar
          28-Cars-Later

          Wow so they picked the best of five, too bad I can’t go find the best examples myself armed with actual resale information. When you control an auction channel you can siphon off the cleanest examples for yourself and not pay auction fees because you own the channel. I’d have less of a problem with this if the goal was to save the buyers fees (which vary but are at least $250/car) and offer the car at a better price than the competition which does pay those fees. But that’s not the end result with Carmax. For the inflated purchase fee I can’t negotiate an extended warranty should be included in the current business model. But its not apparently, because: get bent consumer. F these people. Depending on the dealer, I can negotiate a price esp if I use their financing. I may still get dinged on an extended warranty there too, but I have a chance to reduce my total cost. I don’t at Carmax and they don’t offer me something I can’t do on my own aside from taking some quality product out of general circulation which hurts everyone. I hope these people eventually slip up and some branch of Fedgov comes after them for whatever reason.

          • 0 avatar
            ajla

            “too bad I can’t go find the best examples myself armed with actual resale information.”

            Driving all over Central Florida and dealing with lots of dealers or private owners searching for a used vehicle that looks like it had reasonable maintenance performed on it and is without cigarettes burns in the seats or an Armor-All bath is a hellish proposition. Avoiding all that is just about worth the Carmax premium for me (depending how much it is).

          • 0 avatar
            28-Cars-Later

            I haven’t done a estimate in awhile but the last time I did one its was 29% over the actual mean cost (not including buyers fees which probably knock out 2-3% of this figure). This is unacceptable to me. The trick is Ajla is the older a model gets the more difficult it is to find clean. You have to buy two MYs old when supply is probably at its peak, otherwise yes you are in a unicorn hunt.

        • 0 avatar
          gtemnykh

          re: carmax car quality

          I looked at a 2013 Avalon (ex rental) that was priced at the very high end of the market. It had curb rash on a few of the rims, nasty, noisy “Fuzion” brand tires, and the carmax key dongle that they crammed past the door seal had deformed the seal, causing an extraordinary amount of wind noise.

          They very effectively turned a premium large sedan into a worse driving experience than my critic-maligned 2012 Civic, it was actually impressive.

        • 0 avatar
          dal20402

          The unicorn hunt is far easier when you have the internet to help you. Much less running all over town and looking at total losers.

          Of course, it may end up causing you to buy cars from outside your geographic area and pay the expense to retrieve them. I’m in Washington. I paid about $500 for the plane ticket and expenses to retrieve my Lexus from California and about the same to ship my old Acura from Bumf***, Idaho. In both cases the car I got by spending that extra cash was amazingly, spectacularly better than I could find locally.

          • 0 avatar
            CoreyDL

            Mine came down to me from Michigan! It was from Grand Rapids, IIRC. Had lived its life before that dealer in NC though.

            My GS was sold to a dude in Michigan who picked it up on a trailer, so now it lives up there.

          • 0 avatar
            dal20402

            If it were practical to rent a pickup and car trailer, I would have gone to pick up the Acura myself. Being a city slicker I don’t know anyone with one to borrow, and the deciding factor in having it shipped ended up being that 1) it wasn’t *that* expensive and 2) I couldn’t in good conscience ask anyone else to make the truly godawful 12-hour drive, with a car of unknown quality, with me. Couldn’t fly in like I did to pick up the LS because, well, it was in Bumf***.

          • 0 avatar
            28-Cars-Later

            There’s a GS listed for $2700 at a BHPH near me, I’m half tempted to inquire but also know about being car poor.

          • 0 avatar
            CoreyDL

            Lol, ain’t no way that thing is any good for that money.

            You got enough cars already anyway – what, four?

          • 0 avatar
            28-Cars-Later

            Only three.

    • 0 avatar
      28-Cars-Later

      Its a GFY business model to customers and to Manheim because they operate their own auctions and don’t pay Manheim fees to acquire product outside of trade. If they didn’t have supply locked up their leverage to margin would be much less and thus a better deal for the customer vs standard CPO. But they do, so its a big middle finger to you and because you don’t understand the back end of the business you’re none the wiser.

      • 0 avatar
        ChicagoDave

        Last I checked nobody was forcing anybody to buy a car at CarMax, and yet they keep growing and selling a huge amount of cars. It’s like screaming that iPhones are overpriced while Apple is selling 13m of them in a single weekend.

        • 0 avatar
          28-Cars-Later

          “Nobody ever went broke underestimating the intelligence of the American public.”

          -paraphrased from H. L. Mencken

          https://en.wikiquote.org/wiki/H._L._Mencken

          “It’s like screaming that iPhones are overpriced while Apple is selling 13m of them in a single weekend.”

          There are several problems with this argument. I can buy a USED Chevrolet Impala from many sources and its all the same product, condition and mileage are the only major variables. A NEW Iphone is a relatively fixed cost item no matter who sells it, used is more in line with the Carmax analogy and its pricing may vary. The other thing to note is the Iphone product is in a near duopoly with Google Android, there are many car manufacturers to choose from in a given segment. Phones also do not have the expected durability and lifespan of an automobile. Phones can also be sold to customers under 18 (or legal driving age wherever) and sell for a cost well under what an automobile anywhere would cost.

      • 0 avatar
        matador

        Aren’t Manheim cars cheaper than the CarMax dealer auction cars, though? I thought that CarMax’s auctions were as puffed as their “retail” prices.

        Cars are a commodity, like wheat or copper. I’ll buy from whoever’s sellign the same quality for the lowest price

        • 0 avatar
          28-Cars-Later

          Manheim is the largest auction house in the nation, and I think the world. There are privately owned auctions outside of their control, but they essentially control the flow of used cars in the US. Dealers pay buyers and sellers fees plus a la carte fees such as pre sale or post sale inspection, costs which are ultimately passed on to you. Carmax in a normal world would have to go through them to purchase product they don’t take on trade, however they developed their own product channel by holding their own auction, thus for themselves saving those fees and putting them in a position to cherry pick their own product. My issue with them is they turn around and stick it up the customer’s rear end in pricing AND they are cherry picking decent product which would be otherwise available to the general population. I implore the public to stop patronizing them as they do not benefit you in any meaningful way.

          Pay 20-27% margin with no haggle pricing? Check
          Pay for extended warranty beyond 30 days? Check
          Get less selection at competition due to cherry picking of product? Check.

          Financing may be the only way they could actually be giving you a better deal and in ZIRP I can get zero/near zero from the new car dealer on CPO or my credit union.

          • 0 avatar
            28-Cars-Later

            MY11 Cadillac Deville (DTS) Base

            31K otc

            No Haggle: $23,998

            http://www.carmax.com/enus/view-car/default.html?id=12489117&AVi=1&No=0&Rp=R&D=90&zip=91301&ASTc=cadillac%20dts&Q=73d2219f-a633-48c3-b6e5-c8235e880b78&Ep=search:results:results%20page

            ACTUAL VALUE: 12-15 on condition and area (my guess is they paid 14). Eat it proles and love the *astounding* 9-13K markup.

            MY11 Cadillac Deville base

            10/08/15 TX HOBBY Regular $23,800 14,471 Above PEARL 8G A No
            09/10/15 DETROIT Regular $14,700 49,186 Above GREY 8G A Yes
            08/07/15 PA Regular $14,250 49,694 Above GREY 8G A Yes
            09/01/15 PORTLAND Regular $14,100 56,038 Avg SILVER 8G A Yes
            11/18/15 SAN ANTO Regular $10,500 64,617 Below SILV 8G A Yes
            11/05/15 ATLANTA Regular $11,700 74,075 Avg CREAM 8G A Yes

            MY11 Cadillac Deville “Luxury”

            08/05/15 DALLAS Regular $19,500 14,722 Above WHITE 8G A Yes
            09/24/15 TAMPA Regular $14,900 51,198 Avg RED 8G A Yes
            08/05/15 MILWAUKE Regular $16,000 58,887 Avg CREAM 8G A Yes
            11/19/15 CHICAGO Regular $12,800 67,779 Avg RED 8G A Yes
            08/05/15 MINNEAP Regular $14,200 70,202 Avg RED 8G A Yes
            10/07/15 LAKELAND Regular $6,000 161,126 Below VANILLA 8G A No

            But then conversely we list a Townie for LESS than what its doing vs others in similar mileage.

            MY10 Lincoln Town Car Sig L

            50K

            18,998

            http://www.carmax.com/enus/view-car/default.html?id=12627138&AVi=4&No=0&Rp=R&D=90&zip=91301&ASTc=Lincoln%20Town%20Car&Q=b68640c4-d425-46e3-b7bd-73195e5446e9&Ep=search:results:results%20page

            MY10 Lincoln Town Car Sig L

            12/13/13 PA Regular $24,800 53,135 Avg BLK 8G No
            07/22/14 PHILLY Lease $22,000 53,478 Avg SILVER 8G O No
            08/18/15 PHILLY Lease $16,000 55,771 Avg SILVER B 8G O No
            10/14/14 PHILLY Lease $20,200 57,492 Avg SILVER B 8ET O No
            07/22/14 PHILLY Lease $22,200 60,389 Avg SILVER 8ET O No
            03/27/15 PA Regular $21,000 63,587 Avg BLACK 8G A No

            My overall thought is still F these people and stop doing business with them. If they get cute with 10K markups on one model means they will do it again on others. I don’t feel like posting another one but they did it on an MY11 XJ too, and 5K on an MY11 XF. Dealer’s gotta make money but that’s ridiculous esp when the extended warranty is NOT included.

          • 0 avatar
            matador

            Wow- that’s almost doubling their money! I’m sure that the Manheim cars were sold for less than $24,000 at the small dealers.

            They may be fast, but my time is certainly worth a few thousand dollars!

        • 0 avatar

          An auction is competitive bid. If you won a bid, you paid market price on that day. CarMax auctions are for dealers only. If you want to buy at a real auction, get a dealer’s license. Exactly how would CarMax auctions be “puffed?”

          • 0 avatar
            matador

            I didn’t phrase that the best. I was asking if their prices at their dealers auctions were higher (“puffed”), in comparison to the Manheim dealer auctions.

            I know they’re dealer auctions. I could see being a “dealer” as a hobby, but not much of a career. I like seeing the numbers, though- it’s interesting….

          • 0 avatar
            28-Cars-Later

            @matador

            That’s the point, they are very much out of touch with reality with some of this pricing. Let’s say they are buried on a trade for whatever reason, then sure price it high and take nothing less than the trade + house pack. I can choose to negotiate or I can choose to walk away. Dealer can’t move the car for what they have in it to some schmuck, it either sits there forever or they take it to the block and see what the market will pay. This is how its supposed to work. Oh but you *can’t* negotiate with these c***suckers. You know what really grinds my gears? These people.

            @ruggles

            One of the franchisees did not pay a bid of 20K at one of their auctions, it just didn’t happen. Everyone has Black Book, everyone can see what it was trading at, and nobody got buried on this particular DTS whether it was trade or an auction buy.

            “Exactly how would CarMax auctions be “puffed?””

            I’m not implying it was, I am implying this sold for around the market price if it was sold at one of their auctions to themselves and then the awful s***stain GM decided to add an eye-watering 10K on an discontinued MY11 Cadillac to see what low FICO moron was going to come and grossly overpay (oh what happens to the future bad paper @ 19%+? Didn’t we just go through this in 2008?). A reputable dealer might list it at $19,9 at retail and take low $18s on trade negotiation etc and still make $4Kish on a $14K buy which is pretty darn good on a relatively low cost floorplan in say 60 days. These unscrupulous people make reputable dealers like yourself look like scum and it demeans the whole business. I spit on them. I would eat their children if I could.

            “CarMax auctions are for dealers only. If you want to buy at a real auction, get a dealer’s license. ”

            Although requirements vary from state to state, your dealer lobby has made this near impossible. Funny how that works.

  • avatar
    DenverMike

    What’s bizarre to me is the “destination charge”. I refuse to pay it. What other business hits you up separate at the register for getting merchandise or ingredients to the store? Wtf, that should be rolled into the price. Raise prices if you have to.

    All I see on the road now is private, lowest bidders shipping the new cars anyway. Some with crappy pickup trucks and trailer. Either way, it’s the dealer’s problem. Why don’t they tack on an extra charge for their darn utility bills too??

  • avatar
    Drzhivago138

    >The $4,000 Dollar Fantasy
    >The 4,000 Dollar Dollar Fantasy

  • avatar
    Waftable Torque

    I remember considering applying to work at Enterprise. I went on their website, and saw an application form that wanted to know every job you worked, your income, and all employment gaps.

    I was so offended by their application form that not only didn’t I bother, I boycotted them, and they’ve never earned my rental car business since.

    • 0 avatar
      CoreyDL

      I got as far as a phone interview with them, for their management program (this was 2010 or so). She had asked me (as her last question) if I was truly done considering going into law, since I had my BA in poly sci.

      My reply, “Yes, at least for now.” was not good enough, and the phone interview was as far as I went.

      Overall, I’m glad it went that way now. Working there would have made me miserable.

    • 0 avatar
      Land Ark

      I worked as a claims adjuster for Progressive for 2 years. I enjoyed a couple aspects of it but the pay was awful, management would not support you if someone asked to speak to them, we had way too many claims to work to keep customers happy, I had to take statements and also do estimating and the shops treated me like the scum of the earth, the pay was paltry (did I mention that yet?), there was no reward for doing great work, and it was a dead end.

      I really hated it most of the time and I would never go back.

      However the entire time I was working there and ever since, I always felt sorry for how bad Enterprise employees had it.

      I work with several former ERAC employees and I just can’t compete with the stories of BS they put up with.

    • 0 avatar

      Are you serious? Every job I’ve ever applied for has asked all of those questions. Why was that offensive to you?

  • avatar
    I've got a Jaaaaag

    All you need to know about selling cars

  • avatar
    OzCop

    I like the pie in the sky concept but have issues with your “fire the entire staff” approach, and hire only younger, more diverse employees. How do you get around the age discrimination? And what would be the upper age limit in terms of that hiring? How long could one expect to work for Bark Motors before being dismissed due to age?How do you get around the diversity issue if you have your quota of gender based staff and those of various ethnicities? What makes you think the average buyer would choose your approach to auto sales vs the current concept? I pretty much know when I walk into a dealership what I want and how much I am willing to pay. I never go in and walk out with the car or truck I want right there on the spot. I take some time to think about it, look at other dealers, and while taking that time, more often than not, the dealership will call me with a better offer, or at least an incentive that will sweeten the pot. I’m an old guy, and have purchased a boat load of new cars and trucks in my lifetime, as well as a few used vehicles. My experience with 20 something aged sales people have not been too pleasant for the most part, and they generally hand me off to someone more experienced. All that said, overall the concept isn’t that far fetched, but I’m sure there are a lot of us geriatricly challenged individuals who would appreciate a sales staff with whom we can relate…unless of course your intended demographic is as age limited as your staff…

  • avatar
    whynotaztec

    Would i buy from your dealership? that all comes down to one thing – price. could care less about the rest.

    • 0 avatar
      SCE to AUX

      Like I said above, price is all some people care about. But there is always a better price, which means you didn’t get the lowest one.

      Not me – my time and aggravation are worth something. Better purchase and service experiences have value to both me and the dealer.

  • avatar
    S2k Chris

    “We’d quickly learn what our average front-end retail gross on a car was, and that’s where we’d start our used car pricing — no more trying to load up a car with profit when it’s fresh on the lot.”

    If you always mark to average, your profit would eventually be zero, no?

    • 0 avatar

      Not at all. If you sell you cars at an average gross of $1800, then why try to sell them at $4000 when you know that you’ll just end up selling it at $1800 eventually, anyway? Sure, you get the occasional big hit, but more often than not the car languishes on the lot until the car is appropriately priced to market.

      Someday, I will write an article that explains the concept of “holding cost” to y’all, and you’ll see why that matters.

      • 0 avatar
        S2k Chris

        Month one: Sell for average of $1800.
        Month two: Set price at $1800 profit. Negotiate on price, you’ll get, say, $1600 on average.
        Month Three: set price at $1600.
        Month 45: Aww crap.

        I’m a finance manager at an F100 business, I know what a holding cost is. I also do a lot of pricing analysis, and know that in very few industries is price pressure upwards. You may not get $4k every time, but if your average is $1800, maybe you want to set prices at $2500 or something instead?

      • 0 avatar

        Some of us understand holding costs by having actually incurred them. Some of us also know how much is left out of your $1800. after paying expenses. Of course, if you are selling $1500K used cars, you might be okay. In the used car business, you make your money when you acquire your inventory, not so much when you sell it. Good luck turning a computer loose on that BUT if you want to start, check out vAuto’s tool. As always, tools in the hands of amateurs can be dangerous.

        You first have to get pass a few hurdles before you get to vehicle acquisition, like where the floor plan will come from if you don’t already have track record. There’s some easy money out there, though, so you might get lucky. Beepi did. I hear Scott Painter might have some time on his hands. He’s been known to raise money for far fetched auto retail ideas.

  • avatar
    mfgreen40

    Car Max does sell new cars. They have about 3 new car dealerships. One year ago I bought a new Sienna from Car Max in Kenosha Wisconsin. The internet price was $4400 off sticker. I paid cash, no trade in. The transaction fee was $99.00. It took just over one hour to complete the deal.

  • avatar
    krhodes1

    Interesting. I think your hypothetical dealership looks a lot like my local BMW store. The GM is a woman. My sales person is a mid-20s woman (and she was GREAT to work with). No BS anywhere in the process from start to finish. Finance guy (mid 20s as well) was awesome – they even shopped my loan around and beat my credit unions rates. No pressure for ad-ons, just a list of what was offered. They even took care of a bit of minor stupidity that BMW did at the port of entry with no fuss long after the sale (they removed the brackets for the warning triangle from my trunklid). Price was more than fair, and took only a few e-mails back and forth to arrive at.

    Though I wonder how many non-premium stores are run like this.

  • avatar

    RE: “If I owned my own dealership (and, honestly, could I really be any worse at it than 90 percent of the guys who own dealerships?) here’s what I’d do to help my dealership make more money, sell more cars, be more ethical, increase customer satisfaction and loyalty, and even have more fun doing it.”

    What’s stopping you? If Beepi was able to raise $300 million, surely such an idea would attract huge dollars, right?

    RE: “Anybody who can read a software manual can run a dealership.”

    I wouldn’t disclose this to any would be investors, if I were you. You do that every green pea to enter the auto business thinks it is simple, don’t you? Or do you think you are the first inexperienced business person to think auto retail is “easy.” All these fat cats do is drive around in their demos, hang out at their country club, and take trips all over the world. What could be easier?

    Do you have any idea what is in an auto dealer Sales and Service agreement? BTW, it is NOT state law that mandates these Sales and Service agreements, some euphemistically call a “franchise agreement.”
    State franchise law merely clarifies the terms and conditions of the OEM/Dealer Sales and Service Agreement. For some reason, OEMs tend to like to write them in such a way that they, the OEMs, can do whatever they want, but the dealer, who invests millions, has few rights.

  • avatar
    George B

    Bark M, I’d reorganize the dealership experience around 3 goals

    1) Reduce the time customers have to spend buying products and services. Nobody likes the time wasting games.

    2) Reduce the labor costs by eliminating most of the sales staff. A well organized website, a couple of kiosks, and a sales manager would be better and cheaper that the random salesman who is “up” when you walk in the door. They’re worse than useless.

    3) Work harder to make customers want to come back. Dealers make more money on service than new vehicle sales, but the sales staff tends to make customers never want to come back.

  • avatar

    RE: “Ruggles, why can’t I test drive and buy a Tesla at a Tesla store in Texas?”

    Because Tesla has chosen to not abide by the state’s laws. As a practical matter, it doesn’t make any difference. They have at least one location that I have visited myself. And a friend of mine in Dallas is leasing at least one a week. There are Tesla’s all over TX. A state like TX feels it is important to have someone local to deal with, not some OEM holed up in a foreign country like CA. I know you want to blame that on dealers, but the state of TX has its own reasons. Frankly, I’m fine if they have factory owned stores all over the place as long as they don’t get their own special set of rules.

    But you seem to be trying to take issue with my point about OEM Sales and Service agreements. That is its own issue. You need to understand why dealers exist in the first place.

    • 0 avatar
      healthy skeptic

      @ruggles

      >> Because Tesla has chosen to not abide by the state’s laws.

      So Chopsui’s point holds up exactly. It’s not franchise agreements that prohibit direct dealer sales. It’s the stupid Texas state laws on the matter.

      >> As a practical matter, it doesn’t make any difference.

      Oh really? Let’s see: Tesla galleries in Texas can’t offer test drives, can’t tell the customer the price. can’t deliver the customer their cars after purchase. Every Tesla you see in Texas was bought by someone who had to be hell-bent on buying one, jumping through all sorts of hoops and almost having to get the car delivered in a brown paper bag.

      No…no practical difference at all.

      >> A state like TX feels it is important to have someone local to deal with, not some OEM holed up in a foreign country like CA.

      Wow, someone really needs to tell them about this CA company called Apple. I just hope it’s not too late.

      >> I know you want to blame that on dealers, but the state of TX has its own reasons.

      Yeah. Massive decades-long dealer influence and lobbying $$$$.

      >> Frankly, I’m fine if they have factory owned stores all over the place as long as they don’t get their own special set of rules.

      Actually, I don’t think you’re fine with factory owned stores of any kind, and here’s why. With Texas state auto franchise laws, we have three options:

      A) Leave the laws untouched, and continue outlawing direct sales by OEMs.
      B) Make an exception for OEMs with no previous franchise agreements, or only selling EVs, or some such thing. Basically a thinly disguised Tesla carve-out.
      C) Throw out those laws entirely. Let any OEM sell direct if they please (or do both), and any consumer be free to chose.

      ME: “A sucks! Let’s do C.”

      RUGGLES: “What! Do you really think OEMs will compete against their own dealers? Think of the disaster it would bring, the chaos and instability… Automotive civilization will collapse!”

      ME: “Uh, okay. Well, let’s a least do B. No concern there. Tesla doesn’t have that problem.”

      RUGGLES: “What! Why should Tesla get a special exception? They should play by the rules like everyone else!”

      ME: “Well, fine then, no special exception for Tesla. Let’s do C.”

      (Rinse and repeat.)

      Ruggles, as far as I’m concerned, a middleman should *never* be able to use the law to forcibly inject themselves into a transaction where neither the OEM nor the customer really wants them. That goes for cars, booze, or anything else. That is what Texas state law does, and that’s why I’m opposed to it. C is the ideal, but if B has to exist for a while to open the door to C, I’m okay with it.

      • 0 avatar

        RE: “Wow, someone really needs to tell them about this CA company called Apple. I just hope it’s not too late.”

        Apple sells gadgets, not cars. If you don’t get the distinction, I can’t help you.

        RE: “Tesla galleries in Texas can’t offer test drives, can’t tell the customer the price. can’t deliver the customer their cars after purchase. Every Tesla you see in Texas was bought by someone who had to be hell-bent on buying one, jumping through all sorts of hoops and almost having to get the car delivered in a brown paper bag.”

        If you want one I can arrange for you to get one EASILY.

        RE: “Yeah. Massive decades-long dealer influence and lobbying $$$$.”

        Initiated by the auto OEMS, and supported by the auto OEMs. You
        know any auto OEMs who want to buy out their dealers?

        RE: “Actually, I don’t think you’re fine with factory owned stores of any kind, and here’s why. With Texas state auto franchise laws, we have three options:”

        Here’s how this works. I tell YOU what I’m fine with. You don’t tell me.

        RE: “Ruggles, as far as I’m concerned, a middleman should *never* be able to use the law to forcibly inject themselves into a transaction where neither the OEM nor the customer really wants them. That goes for cars, booze, or anything else. That is what Texas state law does, and that’s why I’m opposed to it. C is the ideal, but if B has to exist for a while to open the door to C, I’m okay with it.”

        First, YOU don’t make the rules. Second, the law protects the agreements the OEMs freely entered into with their dealers to gain access to their capital, expertise, and local connections. In fact, it was THEIR idea. Dealers weren’t “injected.” They were recruited. If the OEM doesn’t want them, they can buy them out. If consumers don’t want them, tough sh*t. Let consumers buy a dealership after entering into a Sales and Service Agreement, and sell to themselves… you know, kinda like a coop. What’s stopping you?

        Most consumers DO want to play the game. They just want to be guaranteed they will win.

        • 0 avatar
          healthy skeptic

          >> Apple sells gadgets, not cars. If you don’t get the distinction, I can’t help you.

          Doesn’t matter whether it’s cars, phones, or booze. Same market principles apply.

          >> If you want [a Tesla] I can arrange for you to get one EASILY.

          Thanks for the offer, but If I lived in Texas and wanted a Tesla, I’d prefer to visit the nearest Tesla store, take a test drive, and if all was good, buy the car. That’s even easier. They’re willing to sell to me direct. I’m willing to buy direct. Why is that so bad that it should be outlawed?

          >> Initiated by the auto OEMS, and supported by the auto OEMs.

          Are we back in the 1950s again? I thought times had changed since then.

          >> Here’s how this works. I tell YOU what I’m fine with. You don’t tell me.

          Of course…but I reserve the right to believe you or not. You said “Frankly, I’m fine if they have factory owned stores all over the place”. I expressed doubt at that statement. If you really mean that, please explain how you would allow Tesla to go about implementing that while leaving current Texas state franchise law untouched. I’m more than happy to retract my doubt.

          >> First, YOU don’t make the rules.

          No, but I do have opinions. As a citizen, I carry these opinions into the voting booth. As a consumer, I vote with my wallet. Just like everyone else here.

          >> Second, the law protects the agreements the OEMs freely entered into with their dealers to gain access to their capital, expertise, and local connections.

          It’s not the 1950s or 1920s anymore. And dealers sure are trying to inject themselves now. Ask Tesla.

  • avatar

    RE: “Except when you have one dealer in your city and the alternative is 200 miles away. Or when the bad dealer has the one example of the car in the country that’s configured the way you want it. I can’t believe you spend so much time and effort defending a system that doesn’t even bother to disguise its regulatory license to seek rents.”

    And there’s hungry children in the world too. If you want utopia, put your money where your mouth is and provide it. I’m not convinced you know what a “bad dealer” is given your complaint that you can’t get what you want. The system that exists is there for good reasons. There is no perfect system where everyone gets what they want. “Regulatory license to seek rents” WTF?

    • 0 avatar
      dal20402

      “I’m not convinced you know what a ‘bad dealer’ is given your complaint that you can’t get what you want.”

      I’ve bought plenty of cars in my life, from bad dealers and good dealers alike.

      The good dealers offer me a straightforward and reasonable price and financing terms, and I sign after minimal haggling. They don’t try to slip extra charges in or change the finance terms at the last second, or hide the ball with respect to what their offer includes. They don’t refuse to talk with me about a Chevy SS with a manual because it takes less of their coffee break away to sell me an Impala LT. They make transactions clear and straightforward. I was fortunate to buy an Acura TSX and both my current Forester and LS460 from dealers like that, and I’d go back to any of them in a heartbeat.

      The bad dealers extend an offer that’s deceptive to get me in the store, and then change the deal hoping I’ll sign anyway when I see the shiny new car. They add fees or useless extras, try to change the interest rate or lease terms, or try to give me a different car than the one I asked about by phone or email. They force me to haggle for hours, and possibly walk out more than once, just to get the deal they offered me in the first place. They waste my time and make me angry. But on three different occasions I’ve kept dealing with a dealer like that because they had an effective monopoly, either by being the only dealer in the area or by having a unique or uniquely configured car. I’ve bought a unicorn loaded stickshift Civic, a unicorn G8 GXP, a used Taurus SHO, and a used Accord from dealers like this.

      And the system does not punish bad dealers. Franchise laws hamstring the manufacturers, forcing them to sign one-sided agreements with the dealers that you misleadingly point to as the source of the trouble. They prevent dealers from facing any meaningful competition and display nothing but contempt for the consumer. Some dealers are scrupulous — particularly, in my experience, those with lots of competing franchises close by — but others take advantage of the legally enforced lack of competition to dick the customer around without any consequences. That is what I mean by “rent-seeking.”

  • avatar
    April S

    I’m in the process of replacing my Mazda2 with either a leftover 2015 Honda Civic LX or a Sentra S.

    I’m so sick of the back and forth garbage concerning the whole negotiating process. Tired to being double-teamed by the salesperson and the manager.

    Sick of the garbage $99 nitrogen filled tires or the $299 “handling fee” concerning the paperwork. Disgusted that they have no pride in what they sell (floorboards of more than one new Civic with dried mud ground into the carpets).

    I just end up exhausted and frustrated with all the dumb games dealerships play. Then again maybe that’s their plan all along.

  • avatar
    Zackman

    Dealer improvement experience number one:

    Get rid of those floppy, inflated things that look like hotdogs with arms and you’re on your way to modern living!

    Oh – even though you don’t see them often anymore – those streamers of little triangular colored flags that drape the lots need to disappear as well.

  • avatar

    RE: “I’ve bought plenty of cars in my life, from bad dealers and good dealers alike.”

    And you have YOUR definition. That doesn’t translate to everyone else.

    RE: “The good dealers offer me a straightforward and reasonable price and financing terms, and I sign after minimal haggling. They don’t try to slip extra charges in or change the finance terms at the last second, or hide the ball with respect to what their offer includes. They don’t refuse to talk with me about a Chevy SS with a manual because it takes less of their coffee break away to sell me an Impala LT. They make transactions clear and straightforward.”

    So we know you have your own definition. I hope you don’t expect auto retail to rush to embrace your buying style.

    RE: “The bad dealers extend an offer that’s deceptive to get me in the store, and then change the deal hoping I’ll sign anyway when I see the shiny new car.”

    So why don’t you report them?

    RE: “They add fees or useless extras, try to change the interest rate or lease terms, or try to give me a different car than the one I asked above. They force me to haggle for hours, and possibly walk out more than once, just to get the deal they offered me in the first place.”

    Just say NO. Or leave. What’s the big deal?

    RE: “They waste my time and make me angry.”

    They probably feel the same way about you.

    RE: “But on three different occasions I’ve kept dealing with a dealer like that because they had an effective monopoly, either by being the only dealer in the area or by having a unique or uniquely configured car.”

    Such is life.

    RE: “And the system does not punish bad dealers.”

    The “system?” The market will get rid of bad dealers, bad being unable to stay solvent. The state AG will take action against dealer fraud. Turn them in. I’ve turned in a few. Why can’t you?

    RE: “Franchise laws hamstring the manufacturers, forcing them to sign one-sided agreements with the dealers that you misleadingly point to as the source of the trouble.”

    I probably know a little more about it than you do. Of course, laws protecting the legal business contract between a local small business person and a behemoth multinational corp inconveniences the corp. The fact is, dealers and the dealer system was created by the auto OEMs to gain access to their capital, expertise, and local connections. I don’t know what trouble you’re talking about. Dealers are profitable and selling record numbers of vehicles. Is there a problem?

    RE: “They prevent dealers from facing any meaningful competition and display nothing but contempt for the consumer.”

    In case you haven’t noticed, there is all sorts of competition at the dealer level, and that’s the continued aim of the FTC.

    RE: “Some dealers are scrupulous — particularly, in my experience, those with lots of competing franchises close by — but others take advantage of the legally enforced lack of competition to dick the customer around without any consequences. That is what I mean by “rent-seeking.”

    What legally enforced lack of competition? It is the OEM that grants the sales territory and assigns the dealer a minimum sales responsibility based on national numbers. No one forces the OEM into this. If they don’t want their dealers, they can buy them out or not renew their Sales and Service Agreements when they come to term.

    You can either tell me about my business as if you think you know or you can ask respectful questions from someone who knows how it works and will give it to you straight. I’ll also give it to you straight if you’re a naive dumbass who doesn’t have a clue about how business works. Apple, REALLY?

    • 0 avatar
      b72

      You mentioned that you’ve turned in a few dealerships for fraud. Can you tell us more about that? What constitutes fraud worth reporting?

    • 0 avatar
      dal20402

      “I hope you don’t expect auto retail to rush to embrace your buying style.”

      I shouldn’t expect auto retailers to be honest? That’s really all I’m asking for. Offer me a price and make clear what’s included in that price. If I’m seeking financing, offer me financing terms. If I take you up on the offer, honor that price, and the financing terms if I choose to finance through you.

      “The market will get rid of bad dealers, bad being unable to stay solvent.”

      So your definition of “bad dealer” is based purely on the bottom line, and does not include any component of customer service or even basic business honesty?

      “Of course, laws protecting the legal business contract between a local small business person and a behemoth multinational corp inconveniences the corp.”

      This is not a situation of one small business versus a large OEM. This is a situation of a large affiliation of small businesses within the regulating state against what is usually an out-of-state OEM that has to manage its situation in 52 U.S. jurisdictions. Dealers, not the OEM, have the political power.

      “Dealers are profitable and selling record numbers of vehicles. Is there a problem?”

      I’m sure the OEMs think there’s a problem when, particularly for non-luxury brands, most of the customers cite buying the OEM’s product as one of the most stressful and unpleasant experiences in their lives.

      “In case you haven’t noticed, there is all sorts of competition at the dealer level, and that’s the continued aim of the FTC.”

      What now? How is there “all sorts of competition” if I want to buy a Lexus in Portland, Oregon? I have one — one — dealer to choose from. Similarly, if I want a dark green manual Chevy SS, there is one in stock in the entire country. There is plenty of competition only if 1) you are in a major metropolitan area *and* 2) you are buying a commodity car. Not surprisingly, my best car purchase experience ever was when I bought a totally standard Forester XT in Seattle, with 6 local dealers competing for my business. In my history that is very much the exception and not the rule.

      “What legally enforced lack of competition?”

      There is competition between dealers — in some circumstances. But dealers do not have to worry about any competition from alternate business models. They have been legislated out of existence. My ideal car-buying experience would be to order directly from the manufacturer. I’d pay extra to do it that way, because I’ve had so many poor experiences with dealers. No can do, and the obstacle is legal, not market-based.

      “Such is life.”

      You tell me this and then you try to tell me I’m ignorant when I complain about your business?

      “You can either tell me about my business as if you think you know”

      If you want to defend your business, you need to show me and the majority of the public that you can do it differently. Public opinion holds, with more than ample justification, that honest dealings are the exception and that most of the people in your business are to be avoided except when absolutely necessary.

      • 0 avatar
        Lou_BC

        @dal20402

        It is ironic that his prime defence for a flawed system is that it moves product and makes money.

        As you have pointed out, most find it an incredibly stressful situation. Another point is the fact that virtually everyone has had at least one negative experience with the purchase process. I don’t know a single person who does not have a negative story about a salesman or sales manager or finance manager. I had read the results of a survey rating the trustworthiness of 100 professions and car salesman are basically at the bottom of the list.

        In contrast to that point, people find having to enter the health care system stressful and often just as expensive if not more expensive than purchasing a car BUT there is rarely a complaint levied against front-line staff. Registered nurses for example tend to rate #1 in the same survey that puts salesmen in last place.

        The retail vehicle system is a predatory system based on taking advantage of human emotion and traits. The naïve, lazy, and trusting types tend to pay too much. One’s whom tend to be too aggressive or assertive tend to get told to bugger off by sales staff or leave on their own out of frustration. Even the one’s who play the game just right tend to leave with a nagging sensation that things weren’t completely right.

  • avatar

    I’m in the process of replacing my Mazda2 with either a leftover 2015 Honda Civic LX or a Sentra S. RE: “I’m so sick of the back and forth garbage on how much they want for their car and what I’ll pay.

    Sick of the garbage $99 nitrogen filled tires or the $299 handling fee concerning the paperwork. Angry that they have no pride in what they sell (floorboards of more than one new Civic with mud ground into the carpets)

    I just end up exhausted and frustrated with all the dumb games dealerships play.”

    Then buy a used car from a private individual. Stop being such a victim. Or find a dealer who will satisfy you. Or just say NO.

    It escapes me why some of the geniuses here don’t just pool their assets, buy one of these joints, and show us how to do it.

  • avatar

    RE: “So, since franchise laws don’t do a darned thing, why not just get rid of them?”

    Again, you think you know how this works, but you haven’t a clue. It is the Sales and Service Agreement between the auto OEM and the dealer that carries the weight. If you get rid of state franchise law those are still in place.

    RE: “And neither would most car buyers.”

    Consumers don’t know what they want except to be guaranteed a win in the “game.” If not for dealers, consumers would pay MORE for new vehicles, not less. Auto OEMs are notoriously inefficient when it comes to running retail. Besides, how do you think it would work when the OEM can FIX prices.

    In the used car business, the Internet already keeps a lid on prices. Consumers have never had it so good. Dealer margins have NEVER been so low. Yet, consumers are more vocal today than at any time in my car business life.

    • 0 avatar
      healthy skeptic

      >> If you get rid of state franchise law those are still in place.

      Then get rid of the laws! They’re totally redundant.

      >> If not for dealers, consumers would pay MORE for new vehicles, not less. Auto OEMs are notoriously inefficient when it comes to running retail.

      In which case, OEM sales would die a quick and unceremonious death. Fine by me, if that’s what the marketplace decides. And all the more reason to throw out the franchise laws. If you’re right, they’re not needed at all.

      >> Besides, how do you think it would work when the OEM can FIX prices.

      They already do. It’s currently the price they charge the dealers. Either way, OEMs have to “fix” prices that are competitive with a couple dozen other OEMs, or they won’t be in business for long.

  • avatar

    RE: “I didn’t phrase that the best. I was asking if their prices at their dealers auctions were higher (“puffed”), in comparison to the Manheim dealer auctions.”

    At auction, the vehicles aren’t priced by the seller, but by competitive bid. That’s the whole point. The dealer offers the car, and the market bids, establishing the market value. Guide books don’t set values. They make a feeble attempt to reflect actual market prices.

    RE: “I know they’re dealer auctions. I could see being a “dealer” as a hobby, but not much of a career. I like seeing the numbers, though- it’s interesting….”

    Why not become a “dealer?” People here think its pretty simple. Not all dealers are successful. But the ones that are are both envied and despised.

    • 0 avatar
      matador

      I understand that, but I could see CarMax rolling in higher prep fees than Manheim, putting reserves, or other things to alter the process.

      I’m not most of the people here. We live in the country where I could legally run a car dealer in the front yard. It’s something that I could see doing on a small scale at some point- sell a couple a year, as something to do as a hobby of sorts (That hopefully doesn’t lose money!), but I couldn’t see doing it as my primary source of income. That’s why I put dealer in quotes- I bought my LeSabre from a man who fixes up and sells a couple of cars every year.

      There’s a difference between parking a couple of cars next to the highway on your own property, where overhead is minimal, and approaching it like a true dealership. I couldn’t see running a true dealership- it’s not for me.

      • 0 avatar

        This might be why state laws are in place. States feel consumers need to be protected from here today and gone tomorrow dealers. It used to be that new car dealers could also operate out of briefcase and off of gravel lots. States didn’t like that as consumers complained. Hence, the dealer laws to protect consumers and good dealers from bad dealers. The Sales and Service Agreements between auto OEMs and dealers are a separate issue. They aren’t gong anywhere. If you want to get rid of them, don’t go to the States, go to the auto OEMs. OEMs can let them terminate or buy them out. All they have to do is want to, while the FTC watches closely.

        • 0 avatar
          matador

          Wyoming’s laws are pretty relaxed. The annual fee is $25, plus a $25000 surety bond, and they require you to have a phone number and a permanent building (Chicken coops and outhouses are eligible!)

          http://www.dot.state.wy.us/home/vehicle_bus_regulation/vehicle-dealerships.default.html

          This state is very business-friendly. A local recycler actually was able to have an old school bus approved as a structure.

  • avatar

    RE: “Um, that used to be a common defense in sexual assault. ‘The bitch had it comin.’

    Non sequitur. Are you guaranteed a win when you buy a house? A stock? a stake in a company? A commodity? If you want to buy a big ticket item in a negotiating environment, there is a risk involved. If you want a rigged game where auto OEMs can fix prices, complain to the FTC. But the auto OEMs know which business model sells cars, and auto OEMS are in the production business. Why do you think the Ford Collection failed? Saturn? A host of other attempts to turn auto retail upside down? CarMAx succeeds because they have built a brand that allows them margin. What’s going on with TrueCar? They lose money and still consumers complain about them. There are lessons that can be learned here unless you think you already know everything.

    • 0 avatar
      Lou_BC

      Really?
      So it is the victim’s oops sorry purchaser’s fault for getting screwed?

      The world is full of trusting naïve souls.

      Profit makes it all right. The ends justifies the means. What ever helps you sleep at night.

      There are always lessons to be learned but I’m not the one here that is deluded in thinking that they know everything.

      Thank you for once again reaffirming every stereotype that the public holds of salesmen.

  • avatar
    05lgt

    “It’s also the only business in America that intentionally operates in a way that is frustrating and oppressive to its customers.”
    This can mean you either don’t have cable, or have forgotten the last time you dealt with them.

  • avatar

    RE: “You mentioned that you’ve turned in a few dealerships for fraud. Can you tell us more about that? What constitutes fraud worth reporting?”

    In particular, advertising that doesn’t follow the rules. That’s my pet peeve. Good dealers are penalized when the bad ones get away with not following the regs.

    I also have peeves with the CFPB who extorts money from lenders, ALLY in particular. After collecting $98 million, they don’t know who to pay retribution to even though they are sure discrimination took place. They invented a phony methodology to “prove” discrimination, and now they have money to returned to “harmed parties.” So they sent out a questionnaire asking borrowers their ethnicity. Now that word is out that if you check the right box you’ll get a check in the mail, I wonder what the margin for error might be? There is no objective standard. You can have nothing but Irish in your family tree, but if you answer the form with an answer included in a “protected class,” you’ll get a check in the mail. Better be on the lookout for that mail if you’ve recently financed through ALLY Bank. Honda Credit, Fifth Third, and some others were also hit. Interesting, since CFPB isn’t supposed to have authority over car dealers, except certain BHPH operations which are lenders first and car dealers later.

    Another sin I’ll rat out a dealer for is when a BHPH dealer doesn’t provide a clear price for vehicles for sale. They prefer to post the required down payment only. Their in a tough business, but they need to follow the rules. The rules say they must clearly provide a price for each vehicle offered for sale. Screw ’em if they don’t like it.

  • avatar

    RE: “”It’s also the only business in America that intentionally operates in a way that is frustrating and oppressive to its customers.”

    This can mean you either don’t have cable, or have forgotten the last time you dealt with them.

    Or a cell phone. The statement is wrong on its face. Auto dealers would be happy to charge everyone MSRP to keep consumers happy. The FTC calls that price fixing. Ever buy a house? Property? A boat? An airplane? A diamond? Furniture? A business computer system? The list goes on.

    • 0 avatar
      05lgt

      I think (not sure) it would only be price fixing if the dealers agreed between themselves on the price. Any individual dealer is free to charge all it’s customers the same price for the same item; it’s when they collude with other dealers that the price is “fixed”. Target doesn’t have to offer TV’s at varying prices to varying customers, but if they reach an agreement with best buy to charge the same price as them and wal-mart, that’s a crime.

  • avatar

    RE: “If you get rid of state franchise law those are still in place.

    Then get rid of the laws! They’re totally redundant.”

    This tells me you have read or understood either the state laws OR a Sales and Service Agreement.

    RE: “If not for dealers, consumers would pay MORE for new vehicles, not less. Auto OEMs are notoriously inefficient when it comes to running retail.

    In which case, OEM sales would die a quick and unceremonious death. Fine by me, if that’s what the marketplace decides. And all the more reason to throw out the franchise laws. If you’re right, they’re not needed at all.”

    Dream on. Your being silly.

    RE: “Besides, how do you think it would work when the OEM can FIX prices.

    They already do. It’s currently the price they charge the dealers. Either way, OEMs have to “fix” prices that are competitive with a couple dozen other OEMs, or they won’t be in business for long.”

    And when they get a hot car that is short supply, what do you think will happen to the price. A distributor sets wholesale prices to its grocery store customers, but doesn’t set the price at retail. When was the last time you asked your grocer what he paid for lettuce? Before you get carried away with your silliness, you might try to put a pencil to what it would cost an auto OEM to buy out its dealers. Do that math first. Then ask yourself, “Which OEM wants to go first?” But if you want to put your money where your mouth is, go into the car business and do it the way you know “works.” I’m sure you have the experience to do that, right? You know what works with car buying consumers, right?

  • avatar

    What our dear friend, Ruggles, fails to admit is that there are already PLENTY of dealers who operate in a similar fashion to this, and they’re nearly universally successful. He’s the dinosaur who doesn’t know the meteor is already on its way.

    But Carmax is getting crushed by the competition, right?

  • avatar

    RE: “I think (not sure) it would only be price fixing if the dealers agreed between themselves on the price.”

    True.

    RE: “Any individual dealer is free to charge all it’s customers the same price for the same item;”

    Yes, any dealer is free to commit business suicide.

    RE: “it’s when they collude with other dealers that the price is “fixed”.”

    UNLESS, they have the same owner like when Saturn granted territories and Ford owned all the dealerships in the 5 territories of its Ford Collection. Same with Tesla. Company owned stores. Same with Target. Apple. Etc.

    If auto OEMs owned all of their outlets, they could legally “fix” prices, as has Tesla. Consumers don’t mind that, right?

    • 0 avatar
      healthy skeptic

      Auto OEMs can only “fix” prices if they all collude with each other. In the past days of the Big 3 domination, that might have been a threat. Today, there are maybe a couple dozen major and minor OEMs, based all around the globe. That’d be a pretty impressive collusion.

      Tesla can’t fix anything. They sell in the same world as MB, BMW and the rest. They have to price their wares competitively, and that’s a good thing.

  • avatar

    RE: “What our dear friend, Ruggles, fails to admit is that there are already PLENTY of dealers who operate in a similar fashion to this, and they’re nearly universally successful.”

    If so, why all the complaints?

    RE: “He’s the dinosaur who doesn’t know the meteor is already on its way.”

    I’m giving you the facts. Dealers are free to operate however they like, within the regs, and consumers get to shop for the dealer who satisfies them. What could be better? What exactly do you think I’m saying? But I will give you a little info. These operators you talk about who give consumers exactly what they want? Exactly who are you talking about? Sonic? AutoNation? There is a LONG list of operators who have attempted One Price and tanked. Regardless, any dealer who is profitable is probably doping more things right than wrong. And about 10% of consumers just can’t be satisfied. We’ve known that for decades. And they tend to collect in groups.

    RE: “But Carmax is getting crushed by the competition, right?”

    CarMax makes MARGIN. AND they sell used cars. This discussion is about new car dealers and state franchise laws. The Internet has already put a lid on pre-owned prices at retail, so the profit making goes on at the purchasing side of that business.

    • 0 avatar

      I specifically said that I wouldn’t do a one price strategy. I said value price. I assumed you knew the difference.

      Nobody makes margin on new cars. You should know that, too.

      As far as examples, I’m afraid I can’t name names, because it would be a conflict to do so

      • 0 avatar
        thelaine

        Value pricing works for Walmart and Costco. You can do better elsewhere on certain items at certain times, but people know they are getting value and not getting screwed, so they are loyal shoppers.

      • 0 avatar

        Certainly I do. And you will price your cars on the Internet, right? Are you talking about new or pre-owned cars? You have to price your vehicles according to market if you want page views. If your model is appealing only to those who pass by, you can go about pricing differently. But the pressure of the Internet is real when it comes to pre-owned. New is another story. One Price/No Haggle and Value Pricing models involve pricing discounts on all new vehicle inventory listed on the Web. That’s a loser strategy, but I’ll be happy for you to learn that lesson on your own nickel. vAuto will be glad to rent you a tool to do this well.

        I’d be thrilled for anyone to put their money where their mouth is and show us how to do auto retail. Put up your own money and you can show us all how its done. If you haven’t already done that, your theories don’t have any substance. You’re like teenagers second guessing your parents. And since you already know everything, you probably won’t be asking any successful practitioners how to do things since you probably don’t want to hear anything that goes against your predispositions.

      • 0 avatar
        danio3834

        “Nobody makes margin on new cars. You should know that, too.”

        Some do, some don’t.

  • avatar

    RE: “Apple sells gadgets, not cars. If you don’t get the distinction, I can’t help you. Doesn’t matter whether it’s cars, phones, or booze. Same market principles apply.”

    No, they don’t. But you’re free to show us how its done if you want to put your money where your mouth is. Gadgets and big ticket items don’t have much in common.

    RE: “If you want [a Tesla] I can arrange for you to get one EASILY.
    Thanks for the offer, but If I lived in Texas and wanted a Tesla, I’d prefer to visit the nearest Tesla store, take a test drive, and if all was good, buy the car. That’s even easier. They’re willing to sell to me direct. I’m willing to buy direct. Why is that so bad that it should be outlawed?”

    Ask the state of Texas and/or Tesla that question.

    RE: “Initiated by the auto OEMS, and supported by the auto OEMs. Are we back in the 1950s again? I thought times had changed since then.” The need to conserve capital and not go off on frivolous ventures is still a current concern to business people. Perhaps you know better?

    RE: “Here’s how this works. I tell YOU what I’m fine with. You don’t tell me. Of course…but I reserve the right to believe you or not. You said “Frankly, I’m fine if they have factory owned stores all over the place”. I expressed doubt at that statement. If you really mean that, please explain how you would allow Tesla to go about implementing that while leaving current Texas state franchise law untouched. I’m more than happy to retract my doubt.”

    I don’t have any control over Texas law. Why not look into Texas’ motivation. I would be happy if Tesla could roll out their business model in Texas. They will need to have as many points as possible because there will come a time when they will need to sell out their sales points for capital that will be greatly needed.

    RE: “First, YOU don’t make the rules. No, but I do have opinions. As a citizen, I carry these opinions into the voting booth. As a consumer, I vote with my wallet. Just like everyone else here.”

    Then feel free to not buy a new car or go out of state to buy a Tesla. Or find a dealer who satisifies you. Or show us how to oeprate a proper dealership. What does that have to do with me. But I’m happy to call bullsh*t on bullsh*t. Everyone’s entitled to their opinion, but not their own facts.

    RE: “Second, the law protects the agreements the OEMs freely entered into with their dealers to gain access to their capital, expertise, and local connections. It’s not the 1950s or 1920s anymore. And dealers sure are trying to inject themselves now. Ask Tesla.”

    Dealers aren’t injecting themselves into anything. They’ve been a part of it from the beginning. When Tesla becomes a factor, I’ll pay attention to them. GM or Toyota sells more cars in a week than Tesla has sold in their entire history. When they sell volume and actually start making money you can tout them as a success story. Until then, they are a start up trying to survive. And when the auto OEMs want to buy out their dealers, or let their agreements lapse, they’ll do so. A few anecdotes about Tesla and a bunch of columnists writing about things they don’t understand has a bunch of you stampeded. Again, it ain’t about state franchise law, it is about the Sales and Service Agreements signed by OEMS with their dealers, which is necessary for the OEMs to leverage the dealer’s capital, expertise, and local relationships.

  • avatar

    RE: “Auto OEMs can only “fix” prices if they all collude with each other.”

    Yes, and they are unlikely to do that. The FTC wants competition at the dealer level. It wasn’t happy with Saturn, but figured Saturn wouldn’t make many ripples. It didn’t. FTC wasn’t happy about the Ford Collection either, but figured it would tank. It did. If an auto OEM owns all of its own points it CAN fix prices like Apple fixes prices on its stuff. It could raise or lower MSRP OR give huge rebates. But all sales points would sell for the same price. I used to consult with a Toyota dealer group with 96 showrooms. They did their appraisals from a central location so no sales point would have an advantage over another. If you’re going to do it, you have to do it right. When a product is in demand higher than supply, it is easy to hold price. Tesla seems to be in that situation, but for how long? Do you think Elon MUsk will announce to the world when he has more cars than buyers? Or will he hide it as long as he can. Now imagine how long he could hold the line if his production lines were cranking out almost a million vehicles a month.

    RE: “In the past days of the Big 3 domination, that might have been a threat.”

    It has never been a threat. When the Big 3 were dominant, GM held the line on prices to hold down sales and market penetration.

    RE: “Today, there are maybe a couple dozen major and minor OEMs, based all around the globe. That’d be a pretty impressive collusion.”

    All the auto OEMs have to do is buy back their sales points. Who will go first?

    RE: “Tesla can’t fix anything. They sell in the same world as MB, BMW and the rest. They have to price their wares competitively, and that’s a good thing.”

    They have been successful in fixing prices so far. Ever hear of someone getting a better deal on a Tesla than someone else?

  • avatar
    healthy skeptic

    Ya know, Ruggles, about the only thing I disagree with you on is over franchise laws forcing middlemen into a given transaction. Every other point you bring up I either agree with or don’t really care one way or the other.

    * I don’t really care if all the other OEMs besides Tesla decide to take a pass or direct sales, as long as the marketplace dictates it, and they’re not being prevented by doing so from dealer protectionist laws. I want to see those laws removed. After that, it’s up to the OEMs.

    * I’m fine with the same restrictions and regulations for factory stores and third-party dealers alike, such as truth-in-advertising and lemon laws. Makes sense to me.

    * I agree the franchise system is critical to the industry. I’ll even give you some credit for helping me see that. My guess is that would still account for a majority of sales even in an entirely unrestricted market. But direct sales still have a growing place under the automotive sun, and dealer protectionist laws barring them should be tossed from the books.

    My beef is 100% with those laws, both as a citizen and as a consumer.

    Beyond that, have a good night.

    Must…stop…arguing…on the Internet…arrrrrgh….

    • 0 avatar

      I still don’t think you get it. The OEM grants a franchise dealer a sales territory. In return, the dealer builds or rents a multi million dollar facility with a long term lease or mortgage attached to it. The dealer makes many other investments based on the franchise agreement he/she entered into with the OEM. Do you think the dealer/businessman would make all of those investments without some protections? Here are a couple of the protections: “He/she won’t have to compete with his/her own supplier in his area of responsibility.” He/she won’t have to tolerate any like kind dealers setting up shop within the borders of his/her area of responsibility.”

      These are NOT state laws against “Direct Sales.” These are agreements entered into freely by the auto OEMs. The OEMs can either let those agreements terminate, or they can reach an agreement with a dealer to buy him/her out. That’s what would be required for an OEM to engage in direct sales. THIS HAS NOTHING TO DO WITH STATE FRANCHISE LAWS!

  • avatar
    HotPotato

    Maybe competition works in a big enough market, where there’s more than one [insert brand here] dealer.

    My local Ford/Mazda dealer lied to me about available inventory and tried to push last year’s demonstrator on me at full new retail. So I went on the internet, found the exact car I wanted at a big-city dealer, quickly negotiated a good price with them via email, and drove a couple hours to the big city to get it. There, the salesman applied zero pressure, the F&I guy was completely honest and helpful, there were no BS added fees, I got a fair price for my trade, and I was in and out within a couple hours.

    The next time I wanted to buy a new car, I felt like I really oughta support local business. I walked into my local Ford/Mazda store again for a quick transaction at the Costco price, and warned them how they’d lost my business last time. My saleslady was genuinely nice, and eventually agreed to get me the car I wanted from another store for a hefty transfer fee. But they had me in the showroom for nearly two entire days for one BS reason or another, mostly the salesperson/sales manager charade, presumably to try to wear me down so I wouldn’t notice they’d “accidentally” marked up the price (twice) and lowballed my trade. Then the F&I guy surreptitiously doubled the price of the service package, and lied to me about financing (no dude, my bank didn’t back out of the deal, do you want me to put them on the phone with you because I have them on my cell right now). Kind of a nightmare.

    Or maybe it’s just good and bad dealers, regardless of city size. My local Chevy dealer is a sweetheart, but can’t necessarily get the desired models; the big-city Chevy dealer I’ve spoken to tried harder than anyone I’ve ever met NOT to make a sale. (Yes, we’re advertising that car but no, we’re not selling it. Yes, we’ll be getting in that car that Chevy’s advertising the lease deal on, but we won’t lease it to anyone, we’ll only sell it outright.)

  • avatar
    thelaine

    When it comes to expressions of racial bias, some races are more equal than others. Openly plan to fire white people? Yawn. Get over it.

    In contrast, Ruggles views are refreshing. He has contempt fpr customers regardless of skin color. You don’t like getting raped? Fk off. Call a cop or date someone else. You should have known better.

  • avatar
    thelaine

    When it comes to expressions of racial bias, some races are more equal than others. Openly plan to fire white people? Yawn. Get over it.

    In contrast, Ruggles views are refreshing. He has contempt for customers regardless of skin color. You don’t like getting raped? Fk off. Call a cop or date someone else. You should have known better.

  • avatar
    Brian E

    Unfortunately I just bought a new car, and yes, I would certainly buy from Bark Motors. I’m more than willing to skip the haggling and even pay a little more than invoice in order to make the process go smoothly. Here’s a tip: put the dealership in an affluent area and sell a brand that’s on the premium side of value. I’m thinking Acura, Subaru, or maybe Honda, Ford, or Mazda with an inventory that’s heavily tilted towards the loaded models. The dealership experience is half of what’s keeping people in luxury brands these days, and I believe young professional families would be just as happy to buy a loaded Pilot or Explorer if only the dealer didn’t give them the heebie-jeebies.

    If a straight couple comes in, address the woman first and ask who will be driving it, and make sure you sell to both of them. Make safety part of the message in the pitch, since there’s no discernible safety advantage in luxury brands these days. Let people take a demo car with front crash prevention out into a closed-off area and drive at one of the giant blow-ups they use for testing to see how the system works.

    One of the dealers around here – a large multi-brand group that sells BMW/MB/Infiniti/etc along with Honda – offers a free lifetime drive-through car wash if you buy your car from them. Makes sense to have for a large enough dealer group (they’ve got to wash the cars they service anyway) and provides another incentive to buy from your dealer.

    I’d suggest also offering upsells that people actually want, as opposed to the ridiculously overpriced protection-package crap that dealers want to stick you with these days. Offer tint at the dealer with a premium film, and you’ll probably get a decent take rate at delivery. The customers who want an illegal tint will have to shop elsewhere, but not everybody wants limo tint.

  • avatar
    jthorner

    “In most cases, it’s owned by a guy whose only achievement in life is having been born to the owner of a car dealership.”

    Not around here. The vast majority of dealerships here are owned by mega-groups like Auto Nation or regional powerhouses like DGDG. The onwer-operator is a rapidly disappearing phenomenon in most parts of the USA.

  • avatar
    pacificpom2

    I suppose this why we don’t have that angst in Australia, apart from waiting weeks (or months if its a Euro or TESLA) to get your new car. As far as I can understand the dealer buys x number of cars in particular combinations of colour, transmission, options etc.. and then hope that their research, or the manufacturer’s) is spot on so that they sell said vehicles. Or occasionally the manufacturer will ask/tell/force them to buy a particular combination to “clear the decks” of a slow seller. Where as in this part of the world most vehicles are ordered from the manufacturer via the dealer. All the dealer has is used cars and a few demonstrators. Of course this may change when we go to full imports and our local Holden and Ford dealers will have a lot of new cars on the lots, but in combinations made up by marketing guru’s and then we will experience the American vision, if you want that the dealer in upper north Queensland has got that, you are welcome to go see them!, Great if you live in Western Australia. Look it up, it’s like seeing a dealer in California and the car you want is in New York!

  • avatar

    RE: “I specifically said that I wouldn’t do a one price strategy. I said value price. I assumed you knew the difference.”

    Yea, I know the difference. I also know that pretending not to negotiate is just another strategy of negotiation. How do you think “value pricing” works? HAve you ever actually done it?

    RE: “Nobody makes margin on new cars. You should know that, too.”

    Not true. What is true is that those who take your strategy don’t make any margin on new cars. Do you understand how the accounting works in a new car store?

  • avatar

    RE: “Thank you for once again reaffirming every stereotype that the public holds of salesmen.”

    Yes, they’re out to make money from you. What a novel concept. When did you figure that out, or do you still live at home??

  • avatar

    RE: “Ruggles saying that people should just report fraudulent dealers is true but for a guy who allegedly has a degree in “behavior” that isn’t how people tend to work.
    a. How do you file a complaint if you aren’t really sure how you got screwed or how much were you screwed?
    b. There are differences between what is legally correct and what is morally or socially correct.
    c. As you pointed out, some have no clue that they got screwed.
    d. Like sexual assault many are just too embarrassed to report.
    e. A local dealer in my town got in trouble several times for “deceptive and misleading” sales and advertising practices. How many people were fleeced before someone complained? Myself and several friends were exposed to those practices a few times when pricing out vehicles but as Mr.Ruggles stated “just look around until you find a dealer that keeps you happy.” Many people are accustomed to sleazy car sales practices and just shrug it off and move on.”

    So what is YOUR solution? We could start by establishing definitions for the words you toss around freely. “Sleazy?” “Deceptive?” “Misleading?” Some of these have actual legal definitions. Some don’t. I real discussion of issues involves using correct definitions. Using the personal definitions of those inexperienced in business law makes for an unproductive discussion. There is opinion and there is fact. We have a LOT more opinion here than facts.

  • avatar
    danio3834

    None of these things are new ideas, more and more dealers are going even further. The day of the poorly run family dealership that spawned the inconsistent customer experience is fading. Every day, more and more independent dealers are bought out by corporate dealer groups that are very systematic and big box in their operation of their stores. Just the way the proles like it.

  • avatar
    danio3834

    To answer the question, would I buy from Bark Motors? If anyone is willing to pull their pants down that much as far as pricing is concerned, sure. I fear I might not be able to a second time though they aren’t generating returns on sales. New car dealers still depend on that. $4,000 PNUR isn’t out of the question in some cases.

  • avatar

    RE: “I hope you don’t expect auto retail to rush to embrace your buying style.” I shouldn’t expect auto retailers to be honest? That’s really all I’m asking for.”

    Depends on what you call honest. The big debate in auto retail these days is what degree of transparency should be provided to a consumer.

    RE: “Offer me a price and make clear what’s included in that price.”

    The law specifies Monroney Labels on new vehicles. There are also regs on pre-owned vehicles. There is no reg that demands a seller quote a price good for an extended period of time. When the price is discussed, that’s the time to buy or not.

    RE: “If I’m seeking financing, offer me financing terms.”

    Unless you’re a BHPH customer, the dealer doesn’t offer financing terms. They shop for terms on behalf of buyers. The terms come from lenders, not dealers. Consumers are free to find their own financing, although dealers most often are able to do that to better advantage than an individual buyer. The exception would be that well established consumer with a 750 plus credit score, home equity, cash in the bank, and equity in the car deal. Those folks don’t need anyone’s help getting financing ALTHOUGH, if they want a subvented rate from an OEM captive, they’ll have to do that through a dealer. A dealer can’t tell you what “terms” might be available from various lenders until a deal is structured and submitted to the lender. Lenders might “tier” the deal differently from each other. Lending Terms might look better on a less desirable vehicle because of available incentives. Lending Terms might change from vehicle to vehicle.

    RE: “If I take you up on the offer, honor that price, and the financing terms if I choose to finance through you.”

    If you both sign the deal, that’s what happens. Again, unless you\'[re a BHPH buyer, you aren’t borrowing money from the dealer. The dealer is only the lender until the contract gets reassigned.

    RE: “The market will get rid of bad dealers, bad being unable to stay solvent.” So your definition of “bad dealer” is based purely on the bottom line, and does not include any component of customer service or even basic business honesty?”

    The market tends to sort out definitions. After all, who would do business with a bad dealer? Someone you think is bad might please many others.

    RE “Of course, laws protecting the legal business contract between a local small business person and a behemoth multinational corp inconveniences the corp.” This is not a situation of one small business versus a large OEM. This is a situation of a large affiliation of small businesses within the regulating state against what is usually an out-of-state OEM that has to manage its situation in 52 U.S. jurisdictions. Dealers, not the OEM, have the political power.”

    Then why don’t the OEMs just get rid of those pesky well organized dealers and sell direct or operate their own sales and service outlets? All they have to do is buy out their dealers or let the Sales and Service agreements lapse at end of term? But you have identified why dealers have formed associations. Ever follow the history of OEMs and their dealers over the decades?

    RE: “Dealers are profitable and selling record numbers of vehicles. Is there a problem?” I’m sure the OEMs think there’s a problem when, particularly for non-luxury brands, most of the customers cite buying the OEM’s product as one of the most stressful and unpleasant experiences in their lives.”

    Most customers don’t say that. You can get almost any answer you want depending on how you ask a survey question. But if the OEMs don’t like it, see above. Ford, I know, has data on what their customer satisfaction numbers looked like when they did business the way consumers said they wanted it done on surveys.

    RE: “In case you haven’t noticed, there is all sorts of competition at the dealer level, and that’s the continued aim of the FTC.” What now? How is there “all sorts of competition” if I want to buy a Lexus in Portland, Oregon? I have one — one — dealer to choose from. Similarly, if I want a dark green manual Chevy SS, there is one in stock in the entire country. There is plenty of competition only if 1) you are in a major metropolitan area *and* 2) you are buying a commodity car. Not surprisingly, my best car purchase experience ever was when I bought a totally standard Forester XT in Seattle, with 6 local dealers competing for my business. In my history that is very much the exception and not the rule.”

    Then buy a commodity car. If you want something that is higher demand than supply, you’ll pay more. You want to have your cake and eat it to? Do you know how markets work? HINT: They don’t care if it gives you stress or not.

    RE: “What legally enforced lack of competition?” There is competition between dealers — in some circumstances. But dealers do not have to worry about any competition from alternate business models. They have been legislated out of existence. My ideal car-buying experience would be to order directly from the manufacturer. I’d pay extra to do it that way, because I’ve had so many poor experiences with dealers. No can do, and the obstacle is legal, not market-based.”

    You’re right. Dealers don’t have to worry about competition from alternative business models BECAUSE their OEM granted them a sales territory before they invested millions in their business. And those OEMs were THRILLED to do that to gain access to the dealers capital, expertise, and local connections. So they signed a Sales and Service agreement that provided benefits both parties needed to do what they do. And its worked well over the years. And if there is ever an auto OEM that wants to try to be a manufacturer and a retailer simultaneously, I’m sure the market will know about it. So far, Tesla is the only one to attempt it, and at some point they’ll notice that the capital required to operate their own sales points will be sorely needed for product development and other critical purposes. Every manufacturing company eventually gets to a place where production smoothing and inventory buffering becomes critical. No one exists perpetually in a world where production and demand stay in balance.

    RE: “Such is life.” You tell me this and then you try to tell me I’m ignorant when I complain about your business?”

    Well, you certainly don’t understand how business works. You don’t seem to understand the difference between a big ticket item and a gadget. You don’t understand why a business person making a HUGE investment in a business requires guarantees from their supplier or why a supplier is EAGER to make sure their retailer is comfortable enough with the deal to make that investment. Dealers have to deal with the unschooled on a daily basis and end up getting blamed for everything from the mass of government required paperwork and fees to the negative equity situation on the consumers trade, to the terms dictated by lenders. Consumers have never had more information available and are probably less happy than ever. Of course, they lack the capacity to unpack all the information they have at their fingertips. And you seem to think you are entitled to a high demand low supply vehicle based on commodity pricing. Its been decades since I learned that threatening to be unhappy is a typical consumer strategy of negotiation. Its been decades since I learned consumers have no compunction about lying in a business deal. I’ll never forget the lady that was looking at two cars. They were identical except for the color. The one she wanted was priced higher because it was built after a price increase had occurred. She was incensed because I wouldn’t just switch the window stickers.

    RE: “”You can either tell me about my business as if you think you know”
    If you want to defend your business, you need to show me and the majority of the public that you can do it differently.”

    I don’t have to defend “my business.” I don’t operate dealerships any more. I defend facts. I don’t need to show you anything. I don’t need to satisfy any customers. I owe nothing to the public. Hell, I don’t owe anything to car dealers. And if I were still a dealer, I wouldn’t let the fear of ruffling a few feathers keep me from making profit on every transaction. Part of being successful in a business where the price is determined via negotiation is learning the strategies of buyers. I have a little experience with that.

    RE: “Public opinion holds, with more than ample justification, that honest dealings are the exception and that most of the people in your business are to be avoided except when absolutely necessary.”

    Then please do so. Or find a dealer who satisfies you. Its really pretty simple isn’t it. Its a two way street. You’re frustrated because you can’t have it your way. There’s no guarantee your way is even reasonable. But you are free to make your best deal. If its too stressful for you, stay home. You’ll probably be well served being an employee for life. You probably won’t want to even be a manager. You won’t invest in stocks or a business. Too much stress. But you’ll be sure to complain.

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