By on December 12, 2016

More Transparency

“I’ll tell you something,” the grizzled used car veteran said to me menacingly from across his massive, oaken desk. “The internet has ruined this business.”

Tell me something I don’t know, old man.

It’s a variation of the same thing I’ve heard for five years. The car business used to be a place where men of little to no education or intelligence could make veritable fortunes, simply by preying upon the ignorance of their customers. Pre-internet, it was completely realistic to make $4,000 of front-end gross profit on the sale of a used car — and sometimes even more! Pull up a chair across from the more tenured sales guy at any Cadillac store, and he’ll gladly spin you a yarn about that one time he made $10,000 in gross on a little old lady who was on a fixed income, and he’ll laugh as he’s telling it.

Of course, he’ll have plenty of time to tell you this tale because he’s the guy who doesn’t take ups and instead lives on his book of referrals — and those are dying faster than the baby boomers who made them an integral part of the car business in the first place.

But now? Why, that rotten internet and all of its information has made it impossible for dealers to screw customers. Or has it?

After all, there’s another saying in the car business as old as the trees itself:

“Some people have to pay more so that others can pay less.”

But if dealers are being “transparent,” as they all claim to be, then how can this be true? Shouldn’t everybody be paying the same price, or very close to it?

Unfortunately, transparency — as much as we all want it, as much as the dealers say that they’re giving it to us — is still a myth at the majority of dealers in America. Dealer still want to own boats. F&I guys still want to take vacations to Cancun. So how is everybody still making money if everybody is so informed?

Even though NADA will tell you 86 percent of customers do research online before visiting a dealership, not all research is created equal. Research can mean anything from evaluating a trade-in on KBB.com (a virtually meaningless number in actual negotiations) to looking up dealer reviews (which are gamed beyond belief) to printing out a map to your local Ford store. (Who still prints maps? Based on my data, a lot of people.)

It can also mean reading reviews of the cars in which you’re interested, but I think the TTAC audience is very aware of my opinion on the value of the modern day car review. Thanks to the Google bot, it’s becoming increasingly difficult for the novice car buyer to know what reviews can be trusted. For all the talk of “Fake News” lately, there’s one industry where fake news dominates, and it’s the car business. All reviews are great. All cars are good. All comparison tests have multiple winners. How is anybody supposed to determine anything from reading any of these fake reviews?

However, it most certainly does not always mean you’ve researched fair market value of your next purchase. It does not mean you understand gap insurance. It does not mean you know your credit score and the loans for which you qualify. It does not mean you know the average auction value is of a 2010 Ford Escape XLT 4WD with option package 300S. (I made that up.)

Combine the lack of valuable research most customers perform with a proliferation of new models available in the marketplace and you have customers that are, in many cases, no more informed than they were in the pre-internet days. What percentage of new car buyers have honestly evaluated all of the vehicles in the class they’re primarily considering? It’s impossible. In the small crossover segment alone there are 12 or more vehicles than one could reasonably consider in any given model year of production.

Still not convinced that the internet isn’t helping anybody buy a car? Let me prove to you how useless most “research” is.

Picture 100 bottles of water in your mind. Don’t break them into groups, just put them all in a big pile. Now, tell me — can you discern how many bottles of water are in that pile? Or does it just look like a lot? Yeah, it just looks like a lot. Okay, try again with 50. 25. Still too many, right? That’s because science has proven over and over again that our brains are too stupid to really understand a number that’s any larger than 5 to 7. Anything more than that is just “a lot.” So when the average consumer has read all the car reviews, searched all the dealer ratings, and crunched all of the numbers, he’s likely to be even more confused than he was when he started.

It’s no wonder, then, that almost 100% of customers hate the car buying experience and want it to be changed. They want to complete F&I paperwork online. They still want to negotiate, but only because they don’t trust car dealers — and quite frankly, they shouldn’t, as we’ve seen time and time again here at TTAC. But dealers could gain the trust of the public back with honest-to-God transparency, if they really wanted to. Here’s how.

  1. Turn the screen around. Show customers what you’ve got invested in a car, including acquisition costs, reconditioning costs, advertising fees — everything. Most customers aren’t unreasonable, and they don’t mind the dealer making a reasonable profit. It’s only when they feel like they’ve been screwed that customers are unhappy. In the minds of most customers, “being screwed” equals “I don’t really understand why I paid what I did.” Studies have shown that many buyers who actually got great deals and paid far below market value still say that they felt screwed by the dealer. As a dealer, that has to be hideously frustrating — to lose money on a car and lose a future sale. But they could avoid all that by simply telling the customer the following; “I’ve got $12,780 invested in this car, and I’d like to make $1,100. Therefore, I’ll sell it to you for $13,880. Fair?” Most customers would be thrilled to take that sort of deal.
  2. Stop lying in the F&I office. I know that the F&I guy makes more money for your dealer than anybody else in the store, but we’ve gotta rein him in just a bit, ok? Why not go the Progressive insurance route here? Show the customer his credit score, and then show him a list of financing options from various lenders. My car loan on my Ford Focus RS is from Wells Fargo. I found out after the fact — upon receiving letters from a gazillion different lenders — that my dealer ran me with at least ten banks. Why did he pick Wells Fargo? Probably because he made the most money selling the note to them. Is it possible that he bumped me a point or two? Sure is. He beat my personal bank, but for all I know, WF was willing to go lower. Now I don’t feel so great about my loan, and that damages the chances that I’ll return to that dealer.
  3. Go One Price across the board. It’s coming — whether we like it or not. CarMax has already done it to great success. AutoNation stores are moving that direction, as well as Berkshire Hathaway, Sonic, Penske, and others. I know all TTAC readers are amazing negotiators, but you’re 1/100 of one percent of car buyers. Rather than letting some people pay waaaaaaay too much and having some people pay waaaaaaaaay too little, let’s just call it even in the middle — like we do for every other single thing that we buy. If the customer feels the price is too high, then let him shop around. Don’t let car buying be an all-out war. Make us all feel happy.

It’s simple, right? But dealers, especially smaller volume dealers, just don’t get it. Information didn’t kill the radio star, guys — if anything, it’s tilted the game in favor of the dealers who do get it. That’s why consolidation is happening, and your local franchise store is likely to be acquired in the next year or two by one of the big groups, if it hasn’t already. The dinosaurs who think that “some people have to pay too much” are slowly dying. And while that’s a bad thing if you’re one of those master negotiators who pays too little, for most people who just want to buy a car as quickly and easily as possible, it’s a very, very good thing.

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101 Comments on “Bark’s Bites: What Level of Transparency Can We Expect?...”


  • avatar
    OneAlpha

    “…the good old days were gone, but they were mostly the good old days for the pilots and owners.”

    The above quote comes from a book on the Golden Age of the Steamboat, but it applies just as well to car dealers. Dealerships can’t really get away with being predatory anymore – or at least, it’s a lot more difficult. And when they get caught, the internet tears them apart for it.

    Huh – the modern world actually CAN be a better place. It’s not often, but it happens.

    Now, if we can just get rid of those franchise laws…

  • avatar
    carveman

    ” Tell me something I don’t know, old man. ” Attitude snowflake Attitude.

  • avatar
    30-mile fetch

    Transparency on dealer cost and profit margin would be welcome. Even when avoiding four-square BS and allowing dealers to compete with each other on total out-the-door cost via email, you are still left assuming you did/not get a good deal, especially on the more popular models with less negotiating room. I can think of little else I purchase where I know the profit margin of the retailer, though.

    The worst to me is the berserk irrationality of the real estate market, and you are devoting a large portion of your income for 20-30 years on that one.

    • 0 avatar
      Scoutdude

      Back in the day those in the “drug store” and some other retailing businesses used to put their cost on the price tag. Of course they used a code. Kidneywort was popular with pure drug stores, you be slick was used by one local chain that also did general merchandise. So if you knew their code you could find out just how much they were going to make on the item. Another local retailer used to have a code for when the item was scheduled to go on sale. That was simply a 1 through 52 in the corner of the tag.

      • 0 avatar

        When I worked for Ann Arbor Volvo’s parts department in the ’70s, inflation was pretty high, so we used the VOLKSWAGEN code on parts to keep track of the cost we paid.

        • 0 avatar
          Erikstrawn

          The dealership I used to work at used MONEYCLIPS. I found most dealerships end their prices in 988, and you can usually figure out the first digit by what the price should be. Check a few cars and you have a quick Wheel-of-Fortune puzzle to figure out their pricing. Salesmen absolutely hate it when you quote their negotiating basement and start bargaining from there (hint: the used car manager will go lower).

  • avatar

    I’m not sure that dealers showing what they are into a car is going to work. If it doesn’t include things like overhead, it’s not really accurate, and if it does there is plenty of room to fudge. And there are a lot of people who view the word profit as a dirty word and think that they are being ripped off if the dealer makes any.

    And on the flip side, what really matters is if the customer likes the vehicle at the price they are paying. I’m not going to pay more for a car because a dealer overpaid for it or bought a configuration nobody wants. And I can’t blame a dealer for not wanting to give up profit because they got a really good deal on a car.

  • avatar
    427Cobra

    I recently went through “the process” in July, when I bought my ’16 Ram 2500 CCSB 4×4 6.4L Hemi. After doing initial research, I selected a dealer that was nearly an hour away from me. Dealt with the internet department. It wasn’t the most “transparent” process, but they were pretty straightforward. Local dealership was offering around $3k off. By driving an hour, I got $10.6k off… and that took all of 10-15 minutes of “negotiation”. I was through F&I in less than 20 minutes… no high-pressure tactics or upselling. It was the most pleasant auto purchasing experience I’ve ever had. I had a week to set up my own financing… which I did… my credit union matched the rate (1.99%), plus… they can do direct withdrawl… so less hassle.

    Yea, the dealership initially tried to screw me on the trade (2000 Super Duty V10 extended cab 4×4, 86k miles)… offering me $1500 on trade. They REALLY did NOT want it. I sold it for $5k in less than 16 hours on CL… so THAT factor was removed from the equation.

    Could I have done better??? maybe. I was a thousand or more below the TrueCar “exceptional price”, and it was such a hassle-free process that I was willing to accept a lack of transparency in trade for a smooth transaction.

    • 0 avatar
      duffman13

      The place where a dealer really will screw you is on the trade, especially if it’s something they don’t want and will just send to auction anyway. In my experience this is anything over 8 years and 80k miles or so.

      Personally I’ve found that when you’re in that boat, particularly north of the 10y/100k mark, it’s better to unload the car yourself by at least a factor of 2. You’re generally in the ballpark of it being worth $5k give or take, which is where the CL cash buyer looking for a car for their teenager or a beater ends up working in your favor.

  • avatar
    LTDwedge

    if I can’t start negotiations at $50 bucks (around & about the asking price) & move up or down in increments of 50, I tend to view the entire experience with a jaundiced pair of eyes. No doubt thats why I still drive a minivan…

  • avatar
    -Nate

    One of these years not too far off I’ll _have_ to buy a new car and the thought makes me shudder .
    .
    -Nate

    • 0 avatar
      Lorenzo

      You know cars, Nate, and you can wrench. A private party used car is an option, especially if you don’t want the time-bomb electronics that have been put in cars the last few years.

      One guy advised me to get a good used car without the latest electronics and find a mechanic to keep it in good repair. My sister got a deal on a 2016 Forester, and she’s amazed at the stuff she has no use for.

      Eventually an automaker will hit the jackpot by building the modern equivalent of a 1965 Dart/Nova/Fairlane at the modern equivalent of 1965 Coronet/Impala/LTD prices. They’ll sell, as long as the 1965 options – auto, PB, PS, PW, AC, are standard.

      • 0 avatar
        bikegoesbaa

        Inflation calculator says the 1965 Impala cost about $21k in 2016 dollars, so I think you’re describing a car that exists and is called the base model Cruze or equivalent.

        They exist. People who have enough money to consider other options don’t want to buy them.

      • 0 avatar

        I plan on keeping my ’08 Civic going for the long run, partly to avoid having all the crap electronics that I don’t want. (No infotainement, period!) I have a friend who had an early ’60s Volvo P544 which he kept for 30 years, 500,000 miles. Rust killed the car. (Boston.) I get my undercarriage cleaned after snowstorms are cleaned up.

  • avatar
    sirwired

    My vote:

    “This is how much we are going to charge for the car, this is how much we are willing to pay for your trade-in, this is the financing we are offering for the remainder for the term you requested. Obtaining your own financing or selling the old car on your own won’t affect the price of the car we are selling you. If you want some optional extras, here are the ones we offer, and I can explain their benefits to you if you’d like.”

    No fees or add-ons other than the mandatory taxes associated with the purchase. (And, and this is a big ask, no ridiculous lies on the benefits of the add-ons. I mean, really, is the resale of used auto glass so prevalent as to deter the theft of a single VIN-etched car? Has over-priced car wax ever successfully protected the paint of a single vehicle?)

    Of note is that my imaginary transaction doesn’t involve any disclosure by the dealer of their costs, for the car, for the financing, none of it. And why should it? Cars are the only routine retail transaction where we pretend to provide a cost to the customer, and the one that’s provided is so misleading as to be useless anyway.

  • avatar
    S2k Chris

    My way:

    1. Buy new
    2. No trade in
    3. Research price on a couple sites (I use USAA-provided TrueCar and owner’s forums “what did you pay” threads) to get a +/- $500 price
    4. Bring my own financing using my personal rules (<2% APR, max 60 months), willing to accept better rates from dealers/captive financing arms
    5. Accept that I am not going to fight for the last $250 off because it doesn't really matter
    6. Be willing to walk away from the deal
    7. Once I've settled on a deal and bought a car, don't continue to research it, it's done

    Doing all this, I either land a deal I consider fair, or walk away. I don't need to keep food off the dealer/sales guy's table, and my time and low stress lifestyle is too valuable to me to worry about the last couple hundred bucks. I'll have paid a fair price and that's all that matters.

    • 0 avatar
      dwford

      Exactly. Why kill yourself?

      I’ve found that Edmunds.com has the correct invoice price, aside from the “advertising fee” the manufacturer adds on. So I start with that. Then I figure out what the incentives are. I figure that I want to pay $1000 below invoice, so the dealer is essentially selling me the vehicle for invoice – holdback and keeping the dealer cash, whatever that might be. Then I figure out my financing, like you assuming a certain interest percentage, my approximate trade value etc. Then I go online and find the dealers that have exactly what I am looking for.

      So I know what I want to pay before I go, and I just keep saying no until the dealer says yes. Did I get the absolute rock bottom price? Don’t know, but I paid what I felt was the right price based on my research.

      • 0 avatar
        mmdpg

        Except that OEM’s have been slowly making the published “invoice price” closer and closer to the MSRP, building in more profit to the dealers who are really paying less than invoice to the manufacturer. Years ago MSRP and Invoice used to be $2500 to $4000 apart, now some are only $800 apart or less and the MSRP’s haven’t come down, the invoice has gone up.

    • 0 avatar
      DAC17

      Wow; a man after my own heart. More common sense words were never spoken about car buying.

    • 0 avatar
      notwhoithink

      Precisely. I did more or less the same thing.

      But then I can afford to do that. I make plenty of money and can afford to spend my time shopping researching what I want, what is fair, and what the best rates I can get are. I also still had a car in the garage so I wasn’t under any pressure.

    • 0 avatar
      1998redwagon

      roger that s2k chris you are currently at +1

    • 0 avatar
      pilotalan

      The last several cars have been bought through the same dealer.
      I always look for win-wins. I know the crap tires on there are getting replaced with the ones I want. Clearbra is going on. I’m getting the extended CPO warranty.

      So, I offer the asking price minus 5%, and give me all the other stuff at your cost (tires, warranty, clearbra, whatever else). I’m saving money stuff I was going to get anyway, and the dealership is making a profit. And I like it because everything was done by the dealership; so any problems are theirs to fix (no fingerpointing).

      It works for me, it works for them, everyone’s happy.

  • avatar
    JimZ

    “For all the talk of “Fake News” lately, there’s one industry where fake news dominates, and it’s the car business. All reviews are great. All cars are good.”

    Except the Chrysler 200, of course ;)

    Honestly, when I read the first line the only thing I could think was “good.” I’m not one of those guys who fancies himself a hard-nosed negotiator who thinks he can walk in like “Awright you sonsab!tches, I ain’t paying a penny more than $17,000!” on a car stickered for $26k. The needlessly adversarial sales model means I really, really like being able to just buy on plan pricing.

  • avatar
    PrincipalDan

    Feeling the tightness between my shoulder blades… gonna have to help my wife negotiate a deal soon on her next ride… gonna have to be an a$$hole to get what she wants at the price she wants…

    It feels so wrong to have such a deep love of anything with an internal combustion engine but such deep hatred of buying the dang things.

  • avatar
    eggsalad

    Transparency isn’t the issue. There are too many variables in the process for the average consumer to understand.

    Fairness is. I don’t know how car dealers sleep at night after screwing people all day. That’s why I could never sell cars.

  • avatar
    yamahog

    I’d like to void the dealer franchise laws just to see what system would emerge.

    More than anything else though, I’d like to just buy a dealer’s time. I want them to put my current car in an auction and give me the proceeds (less some pre-negotiated fees) and I want to buy a car at auction (plus some pre-negotiated fee). The system is set up for my neighbor, who wants to test drive t he new pilot and make sure it fits in her garage and then sleep on it and then spend a week making sure the color is right. More power to her, but I don’t need that overhead, but I do need a deal that reflects my lack of overhead.

    I have a list of cars that I want – I just need to figure out their price at auction / availability at auction so I can instruct a buyer.

    • 0 avatar
      jalop1991

      Ummmm….that’s exactly what I did.

      There’s a guy in town who does just what you describe. His fee is $995. You tell him what you want, within whatever range (price/year/color/options), and he finds suitable vehicles at auction (all computerized, nationwide) and consults with you until you choose one.

      My sales invoice was simple: five lines. Auction price, transportation (my car wasn’t local, he had it trucked in), tax, title paperwork, and his fee. That’s it. And I had agreed to ALL of those prices up front when he found the car that best matched what I described.

      And my time at his place picking it up was short.

      His fee covers his nationwide auction access. It also covers him dealing with the auction house should the car arrive in a condition other than described by the auction. Maybe they’ll refund some money, maybe they’ll have to take the car back. Frankly, it’s all your call.

      Your tradeoff: you are committing to this. If this guy brings a car in on your OK, it’s because you have decided to accept this car based on the auction description. While this guy is a formal dealer, he does not want this car on his lot. That’s not why he brought it in. He brought it in because you said OK, which means you’re taking it.

      This guy, being a dealer, also sells money. So he can run you for financing, if you want. I simply wrote him a check.

      Notice that nothing about this transaction was markedly different from buying from a dealer, with only a couple exceptions. The dealer did not buy the car on spec, which forces him to make a lot of money off it. And I had full access to ALL costs involved, including the dealer’s fee for doing his work–just like a contractor putting up a fence in my back yard, I know what the materials cost at Home Depot and I know what the guy doing the labor charges. There’s no mystery, no hidden anything, all very straightforward and transparent.

      And while this guy had a dealership, it was a small one in a sketchy part of town. Why did I care? I did this all by phone, going down there for one reason: to exchange a check for the car and then drive off. I wasn’t paying for an exorbitant building on prime real estate, with a Starbucks inside and an administrative staff of 20 to pay for. I paid a guy $995 to do a simple and completely transparent task for me.

      Yes, I got my money’s worth with him. The car came in with a few unexpected small blemishes on it; without my being involved, he worked with the auction house to make sure that when I took delivery, those blemishes were taken care of. He disclosed them all to me, and what he did to make the auction house responsible for their less-than-perfect description that got me to want the car. He earned his fee.

    • 0 avatar
      Paragon

      Yamahog, backing in the ’60s, more than once my Dad went and looked at the AMC cars, and without any sort of contract – to the best of my knowledge – they let him drive a Rambler for the whole weekend in order to give the customer and his family the chance to see in he liked it and if it would work for the family. Now this was in a kinda small town, definitely NOT the big city. Really seems to me that rather than try to give a sales pitch, they let the car essentially sell itself. And, I’d suppose that for anybody that had been driving a used car for 3-5 years or more, any new car seemed really nice. And, instead of pressuring the up to “buy today,” the enjoyment of driving a brand new car could motivate some to rationalize and justify a new car purchase without any pressure from a salesman. Will say that while my Dad got a used Rambler wagon for my Mom one time, he never decided on a new Rambler. Oh, and that 1963 Rambler Classic 770 wagon had front reclining bucket seats for both the driver and passenger. Was great for vacations and any long trip.

  • avatar
    DC Bruce

    I’m willing to accept that possibility, for new cars. And, what would be nice, is if dealers then offered the same deal on an “ordered” car vs. one sitting on the lot. After all, the ordered car doesn’t have floor plan expense baked into it. But still, what about “end of the month, move the metal discounts?”

    But for used cars, I think we buyers are still in the jungle. And why should we trust what the dealer says he has in the vehicle? I spent a solid year shopping for the truck in the picture, which I wanted to tow my Airstream trailer. Not really so much on price, but because I was looking for a “1/2 ton” truck, crew cab that had a rated cargo capacity of close to 2,000 lbs. Spouse didn’t want the extra size, etc. that comes with a 3/4 ton. Eventually, using cars.com, I found two trucks that met the spec’s. that were pretty comparable. One was in East Jesus, Alabama; the other in Denver. One was a 2014; the other a 2015. Mileage was about the same; I think these were both “program cars.” The ’15 was loaded with crap I didn’t want (collision alert, lane change alert) but it had the new 8-speed transmission, which I had learned was far better matched to the engine than the old 6-speed, so I was willing to pay for that. So, I got the guy in Denver to back off his price a little more than the cost of flying me out there from DC; but the guy in Alabama was still cheaper. OTOH, getting to East Jesus, Alabama was going to be a real pain in the ass, even though it is closer to DC.

    Did I really care what either of these guys “had in” their trucks? Nope. What I cared about was what they would sell them to me for, and what the alternatives were (a 3/4 ton that my wife didn’t like and, admittedly was less car-like to drive or even more $$$ for a new truck that met my exact specs. — because they seemed to be very rare and much in demand).

    I did find, BTW, that CarMax was generally on the high side, as compared to even the posted used car prices of other dealers.

  • avatar
    ajla

    Honestly, what I think would help best is if dealers stopped being such a bunch of stereotypical gasbags. I get better customer service at Burger King or Dollar Tree.

  • avatar
    dwford

    Why do we feel entitled to know how much profit a dealer makes, anyway? We don’t know how much profit the seller made when we buy a house. We have no idea of the profit the store made on that new TV, on that basket of groceries, on the insurance we buy, etc. ONLY in the car buying process do we feel entitled to know the profit margin.

    • 0 avatar
      Cactuar

      True, but where else can you get ripped off for thousands of dollars than at a car dealership? Knowledge is power. The more info the buyer has the more prepared he is to face the onslaught of shady sales tactics that’s coming his way.

    • 0 avatar

      On a used house you may now thanks to real estate records and building permits. The people I bought my house from made plenty, as seen by the 6 figure check they were handed at closing after paying off their 5 year old mortgage. But I bought in the early 200’s during the upswing so stuff happens.

    • 0 avatar
      bikegoesbaa

      Why does anybody even care what the profit margin is? It’s the wrong question entirely.

      The better things to focus on are:
      -Is this (car/house/toothpaste/whatever) worth the selling price to me?
      -Is there a realistic way that I can get it for less?

      If the answers are Yes and No, then why do you care how much the seller makes on a transaction?

      • 0 avatar
        VoGo

        someone should tell dwford about Zillow.

        • 0 avatar
          Coopdeville

          Yeah, but what does knowing the last purchase price matter (in this current market)? Great, so the seller bought it for $159k in 2009, and now it and 3 neighbors houses are priced at $235k.

          Can I offer $159k plus 7 years inflation and expect to get the house? What do I do if I’m outbid for the 3rd time when I offer asking price?

          Understandable if this was Seattle or LA (only then those prices would say $559k and $735k, lol) but this is East Boringville Ohio. Knowing the last sale price does absolutely nothing except make me wish I was 7 years sooner to the market.

          • 0 avatar
            Scoutdude

            And how much was invested in that house in the last 7 years? Did it get a new heating system, new kitchen, bathroom, flooring ect. Sure you could say some of that was normal maintenance like periodic painting.

            The only thing that really matters is if the current price is right for the current market.

          • 0 avatar
            Daniel J

            Like anything else, the house is worth what someone will buy it at. If a house was purchased at 159K 7 years ago, but that area has become “hot”, you may pay much more than 7 years inflation. If the area has become cold, you even may pay less than what that seller paid, depending on the circumstances. The house is worth what YOU are willing to pay and what its worth to YOU.

        • 0 avatar
          quickson

          I can tell them about Zillow. You’ll find more useful and accurate information from a coin-operated fortune-teller. (at least in my market)

  • avatar
    don1967

    I worked in the “pre-internet” car business (ie: early 1990s) and the $4,000 gross did not exist then. The average profit was more like $800 to $1500 Canadian, and the average salesman left the business after a few months of working six-day weeks for a welfare-like income. The only juicy profits were in the F&I and service departments.

    re: One price – With the MSRP on most popular models now being a mere 5-6% above dealer cost, and factory incentives being widely publicized, “one price” is already here if you want it to be. Simply don’t negotiate. Or maybe you should start negotiating on the other things you buy, from toothpaste to furniture, most of which have a much higher profit margin than cars.

    • 0 avatar
      krhodes1

      Thing is, 5-6% is real money when you are talking the price of the average car these days, never mind the price of anything nice. If I can keep some of that, I want to! I figure $500 is a decent payday for filling out some paperwork to order a car for me. Especially given they are getting all the various kick-backs, and will get paid to service it for 4 years.

      Toothpaste may have a 200% margin, but it would not be worth the effort because the dollars are too small. Furniture I absolutely negotiate. It’s more negotiable than cars are, because, as you said, the margins are far higher.

      • 0 avatar
        don1967

        “Toothpaste may have a 200% margin, but it would not be worth the effort because the dollars are too small.”

        This is true until we multiply these small dollars by the number and frequency of all the little things we buy every month.

        Ever notice the savings when steak, toilet paper and other things go on sale? Stock up when they go on sale, instead of buying one of each as you need it, and you’ll be far richer than the world’s best car negotiator.

  • avatar
    krhodes1

    I don’t get why anyone would go into a dealership without their own financing pre-arranged. Let them try to beat it. Then just Nancy Reagan the F&I guy. I really need to experience the stereotypical F&I guy, I am sure I would find it highly entertaining.

    Ultimately, there are a lot of uninformed people in this world. My own sainted Mother would have no idea how to research a car online, but that is why she has me.

    Used cars are harder – every one is a unique flower. And when you get out of the realm of beigemobiles and into anything interesting, they really become especially unique flowers. I paid a price for my ’95 Disco that would make any of the pricing guides sh!t a brick, but it was absolutely worth it to me for a one-owner clean and shiny truck that lived in San Diego it’s entire life. So far above average it might as well be from Lake Woebegon. I am sure the dealer paid very little for it and made a small fortune.

  • avatar
    turbo_awd

    I’m certainly not a GREAT negotiator. Am I in the upper 50%? I’d love to THINK so, but probably not. I am willing to walk away if the deal isn’t what I want, and made the last sales guy come back 3-4 times to “check with his manager” after I told him exactly what I expected as far as net price, after trade. I didn’t tell him which number to change, just that I want to pay $X net (before taxes & fees), you figure out how to do it. That total was around $700-1200 off his first offer, IIRC (traded in an ’08 Grand Caravan with only ~70K miles that had just come up for airbag recalls for an off-rental ’15 T&C with 29k miles) on Superbowl Sunday ’16. I felt that they still made money, they were willing to take the hitch off the ’08 and after a bit of hassle, I was able to pick it up ~2 weeks later. I’m sure I could have had another $500 off the deal if I’d been willing to get really uncomfortable, but oh well..

    Used cars is where the $$ are these days, AFAIK – it’s easy to compare a brand new – just ask for the “best price” from 3 or 4 local dealers with the options you want, the color you want, etc. Unless the model you want is capacity-constrained (e.g. Focus RS), they will probably all be similar. Used cars – really hard to find 3 local dealers with a 2-year-old blue Veloster with right around 17k miles, etc.. Much easier for them to make up numbers. If you go on auto-trader, search nation-wide and sort by mileage, you will often see cars from similar years (maybe 1 year different), mileage nearly the same, going for 10-15% more or less..

    • 0 avatar
      Coopdeville

      “I am willing to walk away if the deal isn’t what I want”

      With that said, you are in the upper 5% of negotiators, if you really mean it. Anyone willing and able to walk away has the upper hand.

      • 0 avatar
        jalop1991

        I learned that at a young age, when I just did it for my dad at the Toyota dealer. “Come on, dad, you don’t *need* a car.”

        Ten minutes later, the $3000 difference in positions became a $300 difference.

        Leaving with your money: it’s the only guaranteed tool you have that he has zero power against.

  • avatar
    Kendahl

    Most brands have several dealers within a reasonable distance. Play them against each other. The best deal wins.

  • avatar
    FerrariLaFerrariFace

    A car salesman can “turn the screen around” and be as transparent as he wants. Doesn’t matter. I’m still going to assume he’s lying. I’m going to assume that all the numbers on that screen are lies. Numbers that are invented so that I’ll feel better about getting the price he wants me to pay.

    • 0 avatar
      1998redwagon

      i agree. numbers on a napkin, on a piece of paper or on a computer screen they could all be lies.

      people keep multiple sets of books and in a computer it is easy to bring up the set you want. would it be a lot fo work? yes. do people say i tend to look for a conspiracy? yes. would a separate set of numbers be effective? yes. so i believe it would be done.

  • avatar
    White Shadow

    Just get rid of dealerships entirely and let us buy direct from the manufacturer. Then the old dealerships can focus on service instead of sales/financing/parts, etc…

    Buying a new car is a hassle today, mostly because it’s so difficult to know the true cost/price of anything, despite 10,000 Internet sites that post pricing. So I usually do a minimal amount of research and then play one dealer against another until I hit the bottom. Seems to have worked pretty well for me lately.

    • 0 avatar
      28-Cars-Later

      You need new cars to generate trades, and what you get hosed on is trade/used cars in fact probably half to sixty percent of dealer profit comes from used cars. In your model, many dealerships go bust as service only centers, therefore the sheep will continued to be sheered.

      • 0 avatar
        White Shadow

        Trades can go away with car superstores, like CarMax. Need to get rid of the old jalopy before buying the new one? Sell it privately. Don’t want the headache? Sell it to CarMax.

        BTW, servicing is the number one revenue generator at the vast majority (if not all) car dealerships. Sales typically generates a fraction of Service.

        • 0 avatar

          That works great if your car is paid off. It doesn’t work so well if you are upside-down on the car, like a lot of buyers unfortunately are.

          • 0 avatar
            psychoboy

            If you are upside down…you aren’t going to be better off after the trade in on your new car.

            In fact, you are almost certainly going to be in an even bigger hole, because you are digging a new one trying to fill in the old one.

            So, you are upside down….you get to keep driving it until you aren’t. Then you can sell it (private, CarMax, insurance) and make a better deal on a different car.

  • avatar
    NoID

    “Turn the screen around”

    +100

    The only time I’ve felt generally un-raped by a dealer was when I purchased a used Ford E-350 wagon. I was expressing some trepidation with the final price and the interest rate, and both the salesman and the F&I guys showed me their screens and explained exactly what my options were and why. They even offered to fix a broken flasher free of charge when it went on the fritz a few days later (on an as-is vehicle) but the cost in fuel to drive to the dealer was more than the flasher so I just did it myself.

    And yes, they’re part of a big box dealer network (Suburban).

  • avatar

    The majority of customers close deals on a monthly payment, not the selling price or the value of the trade in.

    Manufacturers with their various programs and stair step incentives are the biggest culprits in making transparency opaque on new vehicles, not the dealer. Two dealer of the same franchise can have vastly different prices especially at month end on the same model vehicle. One has reached his stair step, the other is still chasing it.

    Used vehicles are in most instances “market priced” to move them quickly.

    The various “desking” software that dealers use is quite transparent, but which customer wants to walk through the entire desking process as to how a dealer arrives at a monthly payment? Plus the desking software prints out a “deal sheet” for a customer to examine and usually sign prior to a deal being closed.

    Gap insurance is useful if not essential, since most folks will spend more time “upside down” in a finance term than in an equity position.

    Could it be better? Absolutely, but with most folks in lenghty finance terms, and upside down, the industry uses the MSRP as a basis to finance, and the massive discounts enable a dealer to roll over deficiencies.

    Dealing with folks with lower credit scores, financial institutions will gor 130% of Black Book clean, on paper a dealer has to make a ton of gross to roll over deficiencies, have the financial institution hold back a percentage of the funding to finally close a deal.

    This is the one price for the new vehicle with all discounts, incentives, stair steps deducted, your trade is worth 10K (as an example) the pay out is 15K (example), now cut me a check for 5K to pay out the trade if not we are not going forward with this deal.

    Forget the monthly payment, its totally transparent, do you have 5K to go forward with this deal?

    The reason customers close a deal on the basis of a monthly payment, and rolling over deficiencies. The various incentives are the facilitator to roll over deficiencies.

    • 0 avatar
      Lou_BC

      “Used vehicles are in most instances “market priced” to move them quickly.”

      I’ve noticed that many dealers will put outrageously high prices on used vehicles and then start “blow out sale” pricing. The used vehicle is priced comparable to a new one and they then claim a 4-6k discount. The local FCA dealer is the most consistent with this approach.

      • 0 avatar
        PrincipalDan

        @Lou_BC… ding ding ding.

        Like the local dealers who don’t have anything on their lot listed for less than $5,000. That 10 plus year old W-body Grand Prix with 235,000 miles? Still asking more than $5,000. That manual transmission HHR panel wagon with fading custom paint job and not even the bravery to list the miles on your website? Still asking $5,500 – and it’s been sitting on the lot for 6 months.

  • avatar
    Pch101

    I doubt that most customers would know what to do with transparency.

    The ultimate problem is that the sales model is designed to offload OEM risk onto dealer franchises. Margins for dealers are actually low, but those margins only work when some people overpay. The system implicitly encourages upselling and gouging those who don’t know better.

    It’s akin to airlines: Only a niche airline can afford to make flying cheap for everyone. For the most part, airlines stay afloat by using variable pricing models that extract maximum revenue from some customers, then fill the remaining seats with others who would not pay as much. A one-price model would put them out of business.

    Just as long as dealers have to carry the risks that they do, nothing will change. And the automakers have no desire to carry any more risk for the sake of their retail channel than they already do

    • 0 avatar
      VoGo

      Well reasoned statement. One difference between cars and flights is the methodology for pricing. For flights, business people who reserve late and are picky about timing and connections pay more, while consumers who are more flexible pay less. So it feels more ‘fair’ to John Q. Public.

      Car pricing on the other hand tends to discriminate against the naive, the elderly, minorities and women. Doesn’t seem fair.

  • avatar
    gtemnykh

    On the used side of things, I can write a whole novel about my latest dealings with shady craigslist sellers these past few weeks.

    Of 5 prospects we’ve gone to look at that were advertised in the ‘by owner’ section, only one has actually been the actual owner (knew this going in), and only 2 of the 5 cars weren’t sketchy previously wrecked or tampered with vehicles. The last car was a real duesy: an Accord with 100,005 miles on the odometer when we came to look at it for sale by a fellow that obviously flipped cars for a living. Rummaging through the glove box I found receipts for clutch work at 242k miles and an oil change at 262k miles. The seller feigned anger at being “ripped off” by the guy HE bought it from when I called him out on it. But didn’t amend his ad to reflect this “discovery,” and threatened my friend over the phone after we put up an ad with a photos of the 262k evidence and a screenshot of his own ad. The ‘By owner” section has been so inundated by these dregs that I’m beginning to think browsing the local dealers’ wholesale section is probably a safer bet and more productive use of time.

    • 0 avatar
      ajla

      The curbstoners have ruined CL.

      • 0 avatar
        bikegoesbaa

        I’ve purchased several cars from CL curbstoners. In general they were in better shape, better priced, and more accurately described than the true private-party equivalents I looked at.

        As long as the car and the price is right why do I care how many cars the guys sells or whether he’s a long-term owner?

        • 0 avatar
          ajla

          This has by FAR not been my experience. Every curbstoner vehicle I’ve seen is an overpriced scrap heap held together by duct tape and lies.

          But, even if they aren’t selling something in poor condition, buying a car on an open title can be a big risk.

        • 0 avatar
          greaseyknight

          Matches my experience buying my current whip. Actual private party whose car I looked at was lying thru his teeth and hiding motor problems.

          Curbstoner worked for a dealer (vehicle was likely taken in on trade and he got pocket to the money from the sale vs them taking it to auction) I got what I wanted, and the sale went smoothly. I did transfer the title that day thought for my peace of mind…..

          • 0 avatar
            gtemnykh

            I’d say it’s worth putting more resolution on the “curbstoner” label

            There’s the brick and mortar used car lots blatantly using the private sale section to sell cars because they don’t want to pay CL’s $5/car fee to post in the dealer section. Shame on them for abusing CL’s terms but they don’t hide the fact that they’re dealers.

            There’s the main line dealership’s wholesale employees who advertise cars on CL in the private sale section, the cars themselves might be totally fine, again the issue here is abusing CL.

            Now you get to the smaller operations where it’s guys buying cars at the local auctions (or through other means) for really cheap and then flipping them on CL. Some are up front about their business model, others really do try to trick people into thinking they’re a private seller. Photos taken in front of some suburban housing development, etc. Now they’re not officially registered as dealers so technically one could argue they’re not in violation of CL’s rules (although they may very well be violating state law depending on their vehicle turnover per year). Some of these guys are perfectly legit and up front about the cars’ condition, mostly older less expensive/less desirable cars that they bought for a song and now reconditioned a bit and are selling for a profit. It’s when you get to newer, more desirable cars that the funny business gets into full swing. Rebuilds/resprays, flood cars, odometer fraud, etc.

            At least that’s how I see the current CL lay of the land.

    • 0 avatar

      Yeah I love the by owner guy that meets you at the house he’s renting to someone else with dealer tags on the car. Hate to point fingers here but this has happened multiple times to me with guys that own small buy here pay here lots that are trying to move a few cars for cash.

      On the flat pricing, one of the busiest Honda dealers near me uses it and it seems to work very well for them. They have expanded the lot multiple times in the last 10 years including buying some older used car lots down the street to store more new inventory.

    • 0 avatar
      vvk

      I would estimate 90%+ of ads in “by owner” section are by dealer/curbstoner. First question I ask when I call or e-mail is “how long have you owned it?” I have also developed an intuition to help identify dealer ads just by the wording and the pictures.

      • 0 avatar
        gtemnykh

        Yeah I have my standard little litmus test that includes exactly that line “How long have you owned it? Any maintenance records? Any history of accident damage or repair? Why are you selling it?”

        Simple but extremely effective.

  • avatar
    danio3834

    The F&I office could use the most work. It’s where the dealer makes the most money, and where the customer gets boned hardest because things like compound interest, 7 different types of insurance, extended coverage and handfuls of snake oil products are even harder for customers to fully understand than vehicle pricing. Most people have no idea that a dealer can bump a finance rate on them to make gross on reserve.

    Don’t worry about the sales guy, most of the time he’ll do anything just to get a signature on the line that is dotted. It’s the finance manager that’ll give the shakedown.

  • avatar
    deanst

    It boggles my mind that people get excited about negotiating the last $500 of a car’s price, but pay no regard to WHEN they buy their car. The difference between buying in the summer versus a snowy day at the end of January can be the difference between $2000 in incentives versus $8000 in incentives. (And yes, I got $8000 off my last car – and I did no negotiations.) I guess this proves how irrational people can be – I’d rather let the dealer make a few bucks AND pay less for the car, then endear a few hours of negotiations and pain while paying MORE for the car.

  • avatar
    readallover

    Anyone who bought a new car in the dark days of 2008, 2009 knows just how inpervious the business is to change. Dealers and salesmen desperate for sales still could not help themselves from the lying and misdirection that has ruled the business for decades.
    Also, if you want to have some fun and you are paying cash for your car – freeze your credit. The F & I guys go nuts.

    • 0 avatar
      brettc

      That sounds like a fun thing to try since I’ll be buying my next car with VW’s cash and might be buying a Ford or Kia product.

    • 0 avatar
      White Shadow

      I’ve paid cash for my last 6 cars. Freezing my credit (which I’ve done for at least 10 years now) has no effect on them because I’m a cash buyer. As a cash buying, running a credit report on me would be completely pointless.

      • 0 avatar
        readallover

        Yes, running a credit check would be pointless. But financing is such a profit center for dealers because of kickbacks, er, origination fees, they will still try to get you ssn and then attempt to convince you why financing will be a better way for you to go.

  • avatar
    readallover

    Anyone who bought a new car in the dark days of 2008, 2009 knows just how impervious the business is to change. Dealers and salesmen desperate for sales still could not help themselves from the lying and misdirection that has ruled the business for decades.
    Also, if you want to have some fun and you are paying cash for your car – freeze your credit. The F & I guys go nuts.

  • avatar
    bikegoesbaa

    ‘But they could avoid all that by simply telling the customer the following; “I’ve got $12,780 invested in this car, and I’d like to make $1,100. Therefore, I’ll sell it to you for $13,880. Fair?”’

    My response:
    “I’m only sitting here talking to you because the state law requires me to if I want to buy a new car. I’ll never see you again, know more about your merchandise than you do, I’d just as soon buy the car from a vending machine.

    What have you done to earn $1,000+ dollars from me?

    I don’t *need* to buy a car today. You can either call it $13k and make $220 or you can make $0. Your call.”

    This is no different than the Craigslist sellers who want $8k for a $5k car because “they have $7,500 in it”. Sorry you just spent 3 grand in repairs, but don’t expect me to pay extra because of it.

    Prices aren’t determined by the seller’s costs, they’re determined by the value to the buyer.

  • avatar
    healthy skeptic

    I know I’m always the one to harp on this, but dump the dealer protectionist laws and start permitting direct sales from manufacturers. I’m not saying it would single-handedly create paradise on car-buying Earth, but I think it would go a very long way toward cleaning up this whole mess. Manufacturers are far less likely to play these weaselly little games, and that will put pressure on the dealers that remain to do likewise.

    • 0 avatar
      bikegoesbaa

      I agree. Getting rid of dealer protection laws may not solve all the problems with car buying, but I don’t see how giving buyers and OEMs more options would be a negative.

      If dealers actually do all the valuable things that people (Ruggles!) claim they do then they have nothing to fear from some honest competition.

    • 0 avatar
      White Shadow

      I said the same thing a bit farther up the page. Direct car sales would crush the cockroaches and help the average Joe save a bunch of money in the process.

      • 0 avatar

        I doubt it would save much on average. If your direct sales like Tesla and you don;t have retailers fighting over the business it allows for more fixed pricing models with less incentive for markdowns, unless a competitor starts a price war.

        • 0 avatar
          SCE to AUX

          “Fixed pricing” is a straw man argument. Just shop elsewhere for a competitor’s product.

          • 0 avatar

            Correct that’s the choice but right now you also have the choice of pitting dealers against each other for the product you actually want. I have worked in both retail, manufacturing and wholesale with dealers and without (non auto products) in all the products I worked no-where did direct to consumer end up charging less then dealers. I think we could lower the laws but I doubt most dealers would go away. I can buy a pair of sketchers on their website for $75.00 or on Amazon for $49.99. Now you can undercut your dealers but that’s usually a bad idea as they are more consistent customers then retail.

    • 0 avatar
      duffman13

      Direct sales from the manufacturer is the “tort reform” of talking about car sales pricing. It’s going to have near zero effect in cleaning up the mess.

      Think about it – the average vehicle is sold new only once, but generally sold used twice in a 200k life span. On top of that, roughly 30% of new car sales are leases, which consumers understand even less than an actual sale. Leases and used are where consumers tend to get screwed the most from lack of transparency. Taking fleet customers out of the equation, you’re only affecting maybe 15-20% of vehicle transactions – hardly enough to make an impact on the overall process.

  • avatar

    “It’s a variation of the same thing I’ve heard for five years. The car business used to be a place where men of little to no education or intelligence could make veritable fortunes, simply by preying upon the ignorance of their customers. Pre-internet, it was completely realistic to make $4,000 of front-end gross profit on the sale of a used car — and sometimes even more! Pull up a chair across from the more tenured sales guy at any Cadillac store, and he’ll gladly spin you a yarn about that one time he made $10,000 in gross on a little old lady who was on a fixed income, and he’ll laugh as he’s telling it.”

    LOL this is me, but I’m only 39 years old and started selling cars back in 2000 (I don’t anymore, I work on the corporate side of “the biz” now). I came in right when using the internet to find a car was really starting to take off, at least in my little world.

    We were selling cars for MSRP back then…the “good ol’ days”. Even when I would take ups, I was still grossing about 2-3K per car on average (even with a $800 pack).

  • avatar

    But to address the rest of the article, yes, move everything to one price and show all of the options upfront. Let the customer decide what they do and don’t need, just like they do everywhere else.

    That’s how it was when we bought our ’16 CRV. It was one price (about $4K off of the sticker), coupled with a good lease rate. They explained the add-ons and advised why we should get them, but I declined them all.

    The whole process was quick and easy because we didn’t have to deal with separate people (the salesperson did everything).

  • avatar
    vvk

    I don’t know about this. Even if my sales guy shows me the numbers, I don’t believe them. For all I know they have a special application to show the numbers to the customer that inflates them to make more profit.

    There was only one time I believed the numbers. When the sales guy offered a much LOWER price than what I offered to pay. That was the one and only time I did not feel cheated by a car salesman.

  • avatar
    Zackman

    “Still too many, right? That’s because science has proven over and over again that our brains are too stupid to really understand a number that’s any larger than 5 to 7.”

    I believe Arthur C. Clarke once wrote that for him, the number was 3.

    The best way to buy a car is new, if you can afford it. If not, well, you do the best you can, paying your money and taking your chance.

    • 0 avatar
      JuniperBug

      I’m always suspicious about people who adhere too tightly to rules of thumb.

      I could afford to buy a new car, but for my specific situation it would be ridiculous to do so. My fun car was 12 years old when I bought it, and the total cost of ownership over the 6 years I’ve had it so far is a fraction of what it would’ve been had I bought an equivalent new car. The biggest hassle I’ve had in that time was a failed alternator that had me drive it back to my garage on battery power, spend 40 minutes R&Ring the alternator with hand tools, and take a bus to go get it rebuilt. That’s the only unscheduled repair I’ve had to do on the thing. It’s of course undergone other planned, less critical repairs in that time, but is also in better shape now than when I bought it, and has seen about a dozen track hours.

      I’ve also been driving a ~$1,000 car for the past year to go to work once a week and do shopping runs. When you only need to drive 2000 miles/year, not much goes wrong. So far my total outlay other than fuel, tags, and insurance has been about $14 to top up the transmission fluid. Yes, YMMV significantly if you go this route, but it’s been working great for me, and I’d maintain that opinion even if the car had to be scrapped the next time I drive it. By comparison, letting a new or near-new car depreciate thousands of dollars while sitting in my parking space would be a waste of money.

      If I was in the market for a car I was reliant on to drive long distances every day, I’d favour something newer with better gas mileage, and depending on what you’re buying, yes, it might be worthwhile to buy new. At least up here, late-model used econocars are often nearly as expensive as buying brand new.

      Like with deciding whether to buy or rent real estate, you always have to do the math. Be wary of anyone who claims to know the easy answer without knowing all the facts.

  • avatar
    sirwired

    The dealership experience could go a long way if they’d stop even bothering with the ridiculous over-priced add-ons like “paint protection” and the idea the etching the VIN in the window for $400 will magically prevent theft. Such tactics are short-term-gain, long-term loss, when too many customers figure out you ripped them off.

    I remember my dealer tried to sell the Teflon paint protection to me. When I asked him how they got it to stay on the car if Teflon’s most noteworthy attribute is that it doesn’t stick to anything, I got no answer. (For reference, Teflon IS useful as a coatings additive, but it won’t last much longer than the substrate, which in this case is just car wax. When most people think “Teflon” they think of the kind that’s part of frypans, but to get THAT to stick, you need to dip the metal in acidic primer, and then bake it in an industrial furnace.)

    I know dealers have bills to pay, and there should at least be the possibility of making money, but they need to structure the experience so you don’t feel like taking a shower after completing your transaction.

  • avatar
    sportyaccordy

    As a professional numbers guy this does not really stress me out. I know what rates I can get and I know what a car is worth. Biggest thing for me is don’t waste my time. Buying my Civic took about 5 hours because the guy I was dealing with was a real idiot. Like, “spell out all your information as I transcribe it by pen” kind of idiot.

  • avatar
    Zykotec

    I think the point about there being just too many cars to choose from is quite valid. And having lots of information just doesn’t help. I know way to much about cars, and I feel that it makes it even harder to choose. People who grew up in one brand of cars and kept buying that same brand have much simpler lives.
    Or people who buy just for looks, or just for prestige. I have to take into account all those things, while still having read ‘reviews’ and having certain personal opinions, and practical needs. And I know just all to well how people at a factory feel about assembling things properly.
    I almost miss being ‘poor’ and having only a handful of cars available at a price I could afford at any given time.
    I think that as long as you get a car that you like, for a price you can live with, you should feel good about it , no matter what. And if you still feel good about it after a year you’re a very lucky person.

  • avatar
    TMA1

    5, 7, 25, 50, 100, it’s all hrair to me.

  • avatar
    whitworth

    I do think the car manufacturers would sell a lot more cars by just getting rid of the whole dealership model.

    So many people I know don’t want to go near a dealership, and car purchases are more of an impulse buy than people realize.

    Even if people can “afford” getting ripped off, nobody likes the feeling they may be a mark. If you had more individuals open to car shopping and they knew everyone paid the same price, I think far more vehicles would get sold that way.

  • avatar
    jpolicke

    I truly believe if car dealers were somehow forced to give up BS cold turkey they would get the shakes and start to scratch at imaginary spiders just like any other junkie in withdrawal – they are addicted to the flim-flam and sleazy marketing as if it were crack.

    Case in point: a CJDR dealer here on Long Island had been advertising Durango leases with the feature “Includes 7.5 extra gallons of gas!” Curious as to what they were talking about, I called and asked. First they told me that the new models were so much better MPG-wise that it was “the equivalent” of 7.5 gallons. When I called BS given that the MPG ratings for this year and last were identical, they replied that they do not fill the tanks on delivery but the factory puts in 7.5 gallons, and they were giving it to me for FREE!

  • avatar
    Daniel J

    Why should the dealers show customers what the car cost them? Why should this be expected? We all know what MSRP is in just about any product we buy. Do we walk into any big box store and ask what they have in a TV? Do we ask Amazon the same question?

    When I used to sell paint we had a price for the contractors and a price for the average Joe retailer. On occasion we’d get a high volume contractor asking what our price was. While we had a price we paid for a gallon of paint, that price didn’t include many other intangible costs.

    What I would like to see is bottom dollar a dealer is willing to sell a car for on the hood. I hate haggling on the price of a car. Some say that would put dealerships out of business. Some say there are those that would still try to haggle. I don’t know, but I hate haggling.

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