By on October 29, 2021

Screenshot Jo Borras/TTAC

Earlier this week, someone sent me an addendum sticker from Mercedes-Benz of Selma, in Texas. The addendum added two line items to the sticker price. The first line item was VIN etching, at $199. That’s controversial enough, since some people have said that VIN etching is the scam of the decade – but those people haven’t seen the second item: A “Market Adjustment” charge for $125,000.

You read that right. One-hundred and twenty-five thousand U.S. American dollars – and that’s on top of the Mercedes-Benz G63 AMG’s already steep $178,000 asking price. But, frankly, it’s not the 70 percent markup that’s the most offensive thing here, It’s not even the $199 charge for the VIN etching.

Frankly, the worst part of this is that MB of Selma will very likely get their markup. And, when they do, they will deserve every single penny.

WHY THIS IS HAPPENING

Dealer markups have been getting crazy in recent months. Our own Tim Healey even reported on a dealership in Tennessee that had marked up a Mitsubishi Mirage fully six-thousand dollars (yes, they still make those – I’m as surprised as you are) back in July. A number of factors were cited there, most notably a dwindling inventory caused by a nationwide chip shortage. Tim closed that article with the phrase, “it’s another reason to not buy a car in the short term unless you absolutely have to.”

But, considering the fact that car dealers are selling new cars almost as fast as the OEMs can build them, and the fact that it’s unlikely that all of these people “absolutely have to” buy a new car now, we have to assume that something else is behind these exorbitant markups.

My hypothesis for what that “something else” is? Simply put, these markups exist because the dealers are getting them.

CAR DEALERS KNOW HOW TO SELL CARS

“The price of cars is high because people are paying a lot for cars,” is hardly nuanced, sure – but it’s tough to argue against, isn’t it? Someone out there is doing an awesome job convincing millions of people that right now, with prices at an all-time high, is the right time to buy.

They may be doing that in a number of ways. They may tell prospective buyers that, during a period of rapid inflation, the best thing they could possibly do is borrow as many “good, today” dollars as possible, and pay them back with “shitty, tomorrow” dollars down the road. As long as interest rates stay below inflation, that’s probably true – but I don’t think that’s the kind of logic that would move someone to pay $125,000 (sorry, $125,199) above sticker on a G63. That’s not a logical decision on any day of the week, I would argue, but MB of Selma thinks they can get all the money, and they’re (probably) not stupid. That means they understand that buying this new car, right now, is a purely emotional decision.

Frankly, you could probably say the same thing of just about any car on the market today – even that little Mitsubishi Mirage in Tennessee. Heck, the website from Ole Ben Franklin Mitsubishi, the dealer in question, is proudly showing new cars on its website without Monroney stickers on them. Fear not, however, you can still “lock in” a sale price that is probably MSRP … and there’s little doubt that someone, eventually, will hit that button.

When they do, I’d be willing to bet that one of two things will happen. They’ll be contacted by an untrained, unprofessional salesperson who will fumble the sale and convince them to keep shopping, or they’ll be contacted by a professional who will deliver outstanding customer service and convince them to pay whatever they can.

If that’s $6,000 or $125,000 above sticker? So much the better – and they’ll deserve every penny.

WE DID THIS TO OURSELVES

Even if you’ve never sold cars before, you probably have some idea of the type of person who would be drawn to the car business. I myself have worked just about every job you can work in a dealership – from porter to service advisor to sales and, eventually, F&I and management. I have met, hired, and even fired quite a few people along the way, but while I couldn’t honestly say that there was a specific “type” of person that was drawn to car sales, I can tell you that there is a specific type of person who is successful in sales, and I’ll let one of them tell you in her own words.

“The beautiful thing about automotive is that the ceiling doesn’t exist,” writes Seana Corsale. “There’s nobody stopping you from creating a rewarding career, and having fun while doing it … I never thought I could love an industry so much – every part of it. It’s become part of who I am.”

I don’t know Seana. She’s a friend of a friend on social media – but I’ve known horses like her. People who enjoy meeting new people, who put themselves out there and radiate a genuine, positive vibe, know their product, and follow every step of the sales process every time. These are almost always successful because people want to trust them, and most people end up buying the salesperson as much as they end up buying a car.

As such, I’d be willing to bet that Seana has a lot of repeat business, and it’s not because she offers the best prices in town. More likely, it’s because she offers the best experience to her customers, and a positive experience has value to everyone involved.

I want you to key in that last part, because I think it’s important to spell out that good customer service requires you to be a good customer. If you walk into a store – any store, selling any things – and immediately ask to speak to a manager because you don’t want to deal with someone who is inexperienced, that’s not awesome. If you went into a family-owned hardware store and demanded to see their invoice price on a Makita cordless drill, do you think they’d show it to you?

What’s more, if you offered them 5 percent over their invoice price on it, do you think they’d sell it to you? Would you go on Yelp and call them all crooks and thieves and liars for refusing your offer? Would you whine about not getting your way on your blog?

And yet, people do this to car dealers all the time. They’re reviled for trying to make 4 or 5 points on a deal, but nobody tells off the crooks selling you on 401Ks and retirement plans when they turn up for open enrollment, even if they do have a 50.1 percent margin on the plan they talked your useless HR Toby into – not far off from the margin MB of Selma will make if they get their full ask on that G63, now that I think about it.

We have become terrible customers, and I’m no different. When I bought my most recent Volvo XC90, it was the fourth car I’d bought from that dealer (the Autobarn Volvo of Oak Park, Illinois, if you’re curious). It was the second Volvo I’d bought from Nick Kourafas, too, and I’m sure I’ll buy a third soon enough. All the same, when it came time to settle up, I fought him on every charge – and I consider Nick a friend! He’s knowledgeable, fair, and incredibly patient with me every time I walk into that store. He even remembered I wear a size $20 Starbucks gift card on my birthday! Imagine how I would have treated some poor green pea anywhere else … now, imagine how you would treat them.

As far as I’m concerned, these markups mean big money for salespeople and dealerships, and they deserve every penny they’re getting. Call it karmic retribution for all the horrible treatment they’ve gotten over the years, earned and unearned, and find solace in the knowledge that this worm shall turn, and we’ll get back to beating them up for free car washes and gas cards in exchange for halfway decent survey scores sooner or later.

[Image: Screenshot taken by the author]

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82 Comments on “Opinion: Why Dealers Have Earned Massive Markups...”


  • avatar
    jack4x

    “What’s more, if you offered them 5 percent over their invoice price on it, do you think they’d sell it to you? Would you go on Yelp and call them all crooks and thieves and liars for refusing your offer? Would you whine about not getting your way on your blog?”

    I’d buy this line of reasoning more if “invoice price” was anything resembling what the dealer actually pays for a car. In a world of holdbacks, bonuses, etc. “invoice” is just as artificial as MSRP.

    Markups over sticker don’t offend me any more than any other sales technique, because I can always decide not to buy. Someone, somewhere is always willing to sell at MSRP, and putting in the effort to find that place has always been worth more to me than the convenience of buying local.

    • 0 avatar

      Wait until you hear about volume discounts and threshold levels at other retail stores. The point is valid.

      • 0 avatar
        jack4x

        Not what I meant at all.

        It’s not as if knowing the “invoice” price gives any more insight into what a car dealer’s profit margin per unit is than looking at drill prices on a hardware store shelf.

      • 0 avatar
        Ol Shel

        You’re being disingenuous. You are selling a biased argument, rather than trying to create a better understanding of the entire reality. You are doing what the dealers do, and those dealers are reviled because of decades of sleazy behavior, not the other way around.

        • 0 avatar
          stuki

          “those dealers are reviled because of decades of sleazy behavior,”

          If entities remain around for decades, despite being “reviled”, the problem is no longer the “reviled” entity.

          Instead, the problem is the same as everywhere else in our petty edition of a totalitarian financialized dystopia: Lack of freedom, hence lack of competition: People are stuck dealing with reviled entities, because The State barrs less reviled ones from simply setting up shop next door, or shipping goods in from some Amazon lot. Or directly from China, Mexico or Germany. If you think cars are bad, look at the “real estate” rackets…. Where $400K “shacks” like Pelosi’s, is supposedly “worth” at $20mill. Simply because I’m barred from slapping together better and more reasonable alternatives down the street.

          If people have the option to, they route around sleazeballs and other reviled entities. Only when alternative options are banned, are they stuck forking over to sleazeballs. Things are never, ever, different than that.

  • avatar
    ajla

    If you want to spend thousands over sticker on a car because you have some sad heart for salespeople from strangers leaving bad Yelp reviews and declining extended warranties then go for it.

    However, I do think you should ponder why customers are so standoffish when it comes to buying a vehicle but generally don’t act that way when buying Makita drills or 401k plans or shoes or even houses.

    • 0 avatar

      No sad hearts here, but if you’re willing to pay $10K over sticker then you deserve to pay $10K over sticker.

      • 0 avatar
        ajla

        “No sad hearts here”

        Had me fooled.

        If a customer had always been lovely and paid MSRP over the years do you think they “deserve” to buy that G63 for sticker price today? Do you think the Mercedes dealer would go for that?

        • 0 avatar
          FreedMike

          Are car dealers wrong for doing this? Perhaps. But they’re not putting a gun to anyone’s head and saying their signature or their brains will be on the buyer’s order.

          • 0 avatar
            ajla

            I’m not making any moral judgement on a dealer putting a markup on a G63 (on the Mirage maybe).
            However, I also feel 0% bad for dealers over bad Yelp reviews and customers asking for a lower price.

            I don’t think this is a case of “deserve” on either side.

          • 0 avatar
            FreedMike

            I think in the traditional dealer model, both parties “deserve” whatever they feel is a fair deal.

            You could say the dealer holds the cards because he knows exactly how much he’s making off the sale, but so does the customer – he can take his money elsewhere.

          • 0 avatar
            ajla

            “I think in the traditional dealer model, both parties ‘deserve’ whatever they feel is a fair deal.”

            Within reason, I can go with that. However that also means Jo asking to buy his latest Volvo for less money isn’t an example of being “a terrible customer”.

          • 0 avatar
            FreedMike

            I don’t think that’s what he’s arguing and if that’s the implication, I think it’s tongue in cheek.

      • 0 avatar
        Superdessucke

        “No sad hearts here, but if you’re willing to pay $10K over sticker then you deserve to pay $10K over sticker.”

        Pretty much how I feel. I bought my new cars in 2020 and 2021 before the craziness hit under invoice, so I’m set for a while. If people want to throw ten-twenty-thirty thou or whatever at a car dealer fine with me.

  • avatar
    FreedMike

    Love that there’s a car dealer out there named after a sales close.

    https://medium.com/swlh/closing-technique-of-the-week-the-ben-franklin-close-2bda69c87b6

    Nice companion piece to yesterday’s “lenders are ripping you off” story. People get ripped off all the time buying cars, and as much as we’d like to protect them, there’s only so much we can do when they won’t protect themselves.

    Reading this piece, I realize how important Tesla’s sales technique is to its’ success, and why dealers are all-in on paying their elected representatives – I mean, providing important feedback to legislators – to get them banned from selling in their states.

    (By the way, an AMG G-wagen is a f**king horror show to drive – imagine a 500-hp barstool, and you get the idea. Anyone dumb enough to drop three hundred large on it deserves one.)

    • 0 avatar

      The G-wagens were always trash, yes. It wasn’t that long ago they were saddled with W203 C Class interior bits, too!

      That said, Tesla’s one-price model is critical to how its customers perceive it– but they’re certainly not saving money. Tesla found a way to cut out the middlemen and pocket the whole enchilada. Even more hilarious: their customers are willing to pay Lord Musk his premium because (IMO) they are absolutely terrified of any sort of confrontation, especially negotiations.

      • 0 avatar
        jmo

        “Their customers are willing to pay Lord Musk his premium because (IMO) they are absolutely terrified of any sort of confrontation, especially negotiations.”

        Are you trying to give Matt a run for his money when it comes to idiotic statements? It’s a very high bar, good luck.

        • 0 avatar
          mcs

          “Their customers are willing to pay Lord Musk his premium because (IMO) they are absolutely terrified of any sort of confrontation, especially negotiations.”

          Unless they’re forking over money for FSD, I don’t see where Tesla buyers are paying a premium. If Teslas were sold by dealers, given their order backlog, I’m sure we’d see hefty 5 and 6 figure markups and FSD would be tacked on every vehicle whether you wanted it or not.

      • 0 avatar
        Lie2me

        “The G-wagens were always trash”

        Check this out…

        https://classiccars.com/listings/view/1535280/2018-mercedes-benz-g-class-for-sale-in-jacksonville-florida-32246

        $1,199,000 AND it’s marked “SOLD”

      • 0 avatar
        FreedMike

        @jo:

        “Terrified” about negotiation? I’d say no. Tesla buyers are luxury car buyers. Those folks tend to be professionals, and their time is valuable to them. They just want a deal that makes sense. D!cking around over a hundred bucks is a waste of time.

        Tesla gives them a hassle-free, simple buying experience. If they wanted to get in a shouting match with some kid over $200, they’d go to a Dodge dealer.

        Tesla’s buying system work for me. Now if Teslas weren’t junk, and I had a dedicated charger…

      • 0 avatar
        ajla

        But what would make them terrified of negotiations?

        • 0 avatar
          FreedMike

          I don’t know if “terrified” is the term I’d use. More like “disdainful.”

        • 0 avatar
          mcs

          I’m fine with negotiations in good faith. It’s a different story when you know the other party is going to lie in order to bilk you out of the most money possible. Like when I helped my son buy his first new car. It was like “can we see the car?” “No, it’s still in transit.” “Okay, he doesn’t want the paint protectant”. “The paint protectant has already been applied so we have to charge for it”. “Okay, you just told me the car was still in transit.” “I’ll talk with my manager”.

          It’s that kind of crap. I think people are fine with a price as long as no one else is paying less and, with the notable exception of Tesla FSD buyers, not paying for something nearly useless getting tacked on by the dealer.

          • 0 avatar
            FreedMike

            In cases like that, your best weapon is your feet. Walk away. Buy the car from a dealer who isn’t pulling those kinds of bulls**t, or at least tell the one you’re dealing with that you’re talking to someone else who isn’t.

          • 0 avatar
            mcs

            “your best weapon is your feet. ”

            Yeah, we were ready to do exactly that. We had another weapon. The car was a manual. I said take a look at this kid. He wants a manual. Think about that when you’re cleaning snow off that car this winter. He was also paying cash, so no financing to worry about.

            It was also a bit of parenting. He learned his lessons well. He ended up founding a biotech company and hit it big because of COVID and some of the issues related to material shortages.

      • 0 avatar
        SoCalMikester

        everyone else is paying the same price. nobody gets a “deal” on a new tesla

  • avatar
    Dan

    “What’s more, if you offered them 5 percent over their invoice price on it, do you think they’d sell it to you?”

    False comparison. Consumer retail at a thousandth of the selling price doesn’t mean it has a thousandth of the work involved so why should it have a thousandth of the markup?

    The biggest crooks of all, in FIRE of course, work fractions of a percent at a time and it adds up to absolutely cleaning up.

    • 0 avatar

      I think you just made my point. It definitely takes more time and effort to sell a car, so it should have significantly more markup. Thanks!

      • 0 avatar
        240SX_KAT

        Except that the “service” car sales people offer is worthless.
        There’s nothing I will learn from a salesperson that I can’t learn by reading except for physically sitting in the vehicle and they’re no help with that. It was true in ’91 when I bought my first new car just as much as it is true today.

      • 0 avatar
        jkross22

        It’s funny that you think it takes a lot of effort to sell a car. You may be confusing manipulation with communication.

        I’m 50. I can’t recall one time when a salesperson knew more about a car I was buying than I did.

        Prepping the car, transporting it, etc. Sure, that’s the effort, especially if we’re talking about design and engineering. Most of those are completed well before a dealer signs the paper to buy them from the mfg.

  • avatar
    dwford

    It has nothing to do with whether salesmen “deserve it” or not. Its simple supply and demand. Dealers don’t know when they are getting their next shipment, or how many vehicles they will be getting. The prices reflect that. If dealer markups offend you, then don’t buy. Simple as that.

  • avatar
    jagerninja

    I still don’t like it. In ordinary times, sure, I might complain about a $20k markup on a Bronco because I for sure won’t pay that and it means I might have to wait to go Bronco shopping. But, let’s face it, no one *needs* a Bronco and so we’re just grousing.

    But these are extraordinary times, and I’m thinking not of the person who *wants* to buy a new car but the person who *needs* to buy a car–any car–for basic transportation. The Mirage, for example, would normally be a super-econo penalty box and no one in the comentariat here would recommend it over buying used. But here we are, with used prices through the roof and now a buyer is faced with a much worse array of choices.

    I feel like we can’t have it both ways. We can’t sit here and say “we’re such bad customers, we did this to ourselves” when someone is out there making a Hobson’s choice of whether to get fleeced or miss work.

  • avatar
    pmirp1

    First of all, I want to defend dealers. They provide jobs locally across our country. They help charitable causes locally. Most importantly while many complain about having to buy vehicles from dealers, dealers finance you and get you a ride. May not be what you really want, or at cost you want, but they finance you. They can even find you insurance. Try that next time with the Tesla model. If you have less than stellar credit, can you buy direct from manufacturers?

    Secondarily, we don’t complain about people buying more for homes than listed price. Yet, we complain about cars costing more than listed price. It is supply and demand. Free markets. Please don’t get Biden involved in this business. Before someone tries to compare cars in this market to washer dryer at Home Depot, understand there is still plenty of washer dryers available, even if the model you want is not. Washer dryer manufacturers are just sending the high cost item to Home Depot and not the cheap models, and you buy and accept the price.

    Finally, this is America. The last few years stock market has done well. Homes have done well. Everything gone up. I still have my business, but just my stocks (index funds) have gone up 20% average. I laugh when I hear about inflation.

    Well if you have no capital to start, yeah you are in bad shape. I feel for younger generations. Homes, stocks, vehicles if you own them, you are in good shape and you can afford market adjustments or expensive washer/dryer.

    • 0 avatar
      jagerninja

      “Secondarily, we don’t complain about people buying more for homes than listed price.”

      You and I move in dramatically different circles, then, because I hear complaints about this *constantly.* It sucks when you’re trying to buy a place to make your home and you’re getting outcompeted by all-cash offers $25k over asking from investors, flippers, and home buying services who are just in it to extract value. It’s rent seeking at its finest.

      • 0 avatar
        ravenuer

        But I think his point was, this is America, which has a free-market economy. If you want the house/car bad enough, you’ll pay for it. Otherwise you can’t have it.

        • 0 avatar
          28-Cars-Later

          “this is America, which has a free-market economy”

          LOL.

          • 0 avatar
            FreedMike

            Exactly.

            And I’ll remind this guy of his “I laugh at inflation – hahaha” remark when he’s blaming The Party He Doesn’t Like for inflation, which we all know is their way of ushering in communism.

          • 0 avatar
            ajla

            “LOL”

            Yea… The car sales and especially real estate situation in the US is far from an unfettered free market.

          • 0 avatar
            FreedMike

            @ajla:

            Aside from basic consumer protections, when it comes to price, the car and real estate markets are pretty much Wild West capitalism – there isn’t much restriction at all on what sellers charge and what buyers pay.

            Now, financing the cars and houses can be a different story. Home lending is highly regulated; auto lending, rather less so.

          • 0 avatar
            ajla

            There are tons of regulations surrounding dwellings and selling cars. Maybe you consider those “basic consumer protection” but it definitely causes a situation that isn’t an open free market. With housing especially, it causes a severe supply restriction.

          • 0 avatar
            FreedMike

            @ajla:

            I was talking about the asking price. Sellers can ask whatever they want and buyers can offer whatever they want – that piece is basically unregulated.

            Lending tends to be the limiting factor on price, and as you say, there are plenty of regulations on that.

          • 0 avatar
            jkross22

            I know, it’s funny when people say this and really mean it.

    • 0 avatar
      dwford

      In defense of dealers, the average customer walks into the showroom wholly ignorant to the models and trims of the brand they’ve just walked into, brandishing inaccurate pricing and trade info from their 5 minutes googling, impatient with a condescending attitude, and “in a hurry.” Most cannot accurately describe what they do with their vehicle, how many miles they drive, how many people they carry, or what their credit score is. Or even how much they make! Most actually need a competent salesperson to sift through the gibberish and help the customer find the correct vehicle for their needs (any maybe prevent the customer from making a costly mistake).

  • avatar
    Lie2me

    There’s no way I’d pay above sticker for any car and for every dealer that charges a premium there’s two who won’t. I will find that dealer and buy from him

    • 0 avatar
      jkross22

      Yup. Went through this exercise a few months ago, and it took calling 12-15 dealers before finally finding one that wasn’t going to play games.

      Lots of time invested to find one decent one.

  • avatar
    Mike Beranek

    Whenever an industry has such a huge price advantage over it’s customers, it’s time for those customers to explore alternative solutions.
    Of course, some people will just bend over and say, “Thank you sir may I have another?”

  • avatar
    statikboy

    TL;DR beyond ““The price of cars is high because people are paying a lot for cars,” is hardly nuanced”… It’s hardly nuanced but it’s true.

    The same is happening in real estate in a lot of areas. If people would say “no, that dumpster fire of a house isn’t worth $1.7 million” then the market wouldn’t be out of control. But we’d ALL have to think this way, or someone would swoop in anyway and buy the dumpster fire of our dreams out from under us.

    The real estate market is benefiting from a perpetual state of fear.

  • avatar
    Dave M.

    “Call it karmic retribution for all the horrible treatment they’ve gotten over the years, earned and unearned…”

    In my 40+ years of guiding perhaps a thousand people through the car buying process (a fun hobby for me btw), the horrible treatment sales/management get is overwhelming deserved with rare exception. Their job is to milk as much money out of you the buyer as is possible, and it’s most likely through deceptive practices. That’s the rub for me. If it was a clean, above board process then I think people would be more forgiving of their behaviors. Thus the popularity of Saturn back in the day, and a begrudging respect for CarMax, etc.

    All that said, there are a handful of dealers in the greater Houston area that truly do treat their customers fairly (haven’t seen an ADM yet at any of them), and those are the dealerships I refer people to all the time.

    • 0 avatar
      Lou_BC

      @Dave M.
      Agreed. Anything negative that I have to say about car sales staff and dealerships has been through first hand experience. I’ve watched them try various sales tactics on me, flat out lie to my face, try bait and switch, 4 square, it’s only 30 bucks a month extra et al.

      Have I met good sales staff? Not at a car dealership but then again that depends on which side of the bargaining table you happen to be seated.

      I’ve walked away feeling like I needed a good shower to wash off the slime.

  • avatar
    Glenn Mercer

    Regarding the comments comparing real estate to cars. I’ve always wondered about the different “signaling” between car prices and house prices. (And yes, I realize houses are not like cars in that they do not have an invoice or an MSRP etc etc.) But Monday morning at the office (ok, assume you are still going to work at an office), if you heard these two statements:

    “Larry bought that house he was looking at for $500,000”

    and

    “Larry bought that Cadillac he was looking at for $50,000.”

    I will bet the internal (thoughts, not said out loud) standard reaction to the house new would be “Wow, Larry, good for you, you must be doing well, much envy, I gotta ask for a raise!” and to the car would be “Geez, I coulda got that model for $49,500, what a dope.”

    We brag about how much we paid for our house and how little we paid for our cars.

  • avatar
    Steve_S

    It’s supply and demand. I don’t like ADM and won’t pay for it. Same reason I’m stuck with an old graphics card while the rest of my PC is new, not spending double MSRP for a card.

    The problem I have with your opinion is that we are forced to go through a middle man (the dealer). I can and do buy a number of things direct from manufacturers online. This reduces what I spend on quality items. I can’t do that with a car the 2nd largest purchase in a person’s life.

    But a hot vehicle is not a necessity so something is worth what someone is willing to pay for it. i just won’t be one of them.

  • avatar
    olddavid

    I will put a coda to this string of nonsense. The public has gotten what they deserve. Our family came into this arena right after WWII, and spent decades trying to figure out how to make a fair living while being castigated for trying to profit. The franchise system was the last vestige of a method for a working class stiff to accrue real wealth and equity. The method boys of Hall-Dobbs came sniffing for their 2% in the fifties and there lies the basis for the decline of the retailer, brought on by the “system” they and Wayne introduced. My father kicked them out, only to see all of our competitors sign up. A race to the bottom ensued. Sound familiar? Our retail core has imploded in a similar contest first with Wal-Mart, now with Amazon. After fifty odd years, I will admit failure, as I have no clue how this will shake out. I could no more assume a role where a majority of “ups” come online than I could split an atom. I will hope I have taught my children how to have transportation without needing a go-between.

  • avatar
    ToolGuy

    @Jo,

    Here’s some free advice on reader engagement. Call it The Truth About Comments if you like. :-)

    You had your say up there, now sit back for a day or two and let the readers have theirs. If asked a direct question, reply in your own time. Chime in elsewhere as you prefer. But when you stand like a rabid dog over your newly-spilled ink, immediately and reflexively ‘defending’ your piece, it definitely has a chilling effect on the range of comments you are going to get*. Let things develop organically.

    (*Corey likes to do it this way, and comments on his writeups have dropped to the Relatively Very Few category.)

    [Not personal, just business. Use your noggin. The point is to get people to click through on the Amazon links and then not clear cookies when buying this month’s beans and rice and potatoes, is it not?]

    Not everyone gets a chance to read and comment right away. A properly managed TTAC writeup might even get some meaningful perspectives that you hadn’t considered before. (Imagine that.)

  • avatar
    ToolGuy

    Jo’s Hypothesis: Dealers are incredibly good at selling Mercedes-Benz G63 AMG’s.

    Ok let’s test that hypothesis. Let’s compare sales volumes and customer satisfaction of Mercedes-Benz G63 AMG’s sold through dealers vs. Mercedes-Benz G63 AMG’s sold through other channels.

    Oh wait…

    [Dealers are the best way; dealers are the worst way; because dealers are the ONLY way.]

  • avatar
    05lgt

    If your business model requires information asymmetry to function it might be the best your customers are going to find but it’s not market pricing, fair, or even deserved.

  • avatar
    05lgt

    When can I buy a car on Amazon?

  • avatar
    Ol Shel

    Dealers really need the money! They’re obviously operating right on the edge of profitability in order to give you the customer the very best deal and experience possible! That’s why we see dealers fail and go out of business… almost never.

    It’s pure greed. They believe that getting the most and giving the least is good for their communities. Their behavior is no surprise.

  • avatar
    MitchConner

    Can’t hurt for a dealer to ask — because they sometimes get it.

    In Silicon Valley, you’ve got a lot of people making huge money who really don’t have much of a backbone. So much so that dealers in the San Francisco Bay Area stick to their guns when it comes to price. When shopping for a Ford Fusion Titanium in 2014 — the best deal I could get was $500 off sticker plus a couple of incentives.

    Found an identical car in Southern California. Sent an email into one dealer’s internet department, they came back with $5K off sticker — the same incentives — then asked a couple of questions — which revealed I was eligible for another couple grand of incentives that Ford wasn’t even posting on their website. Offered more for my trade as well — contingent upon their inspection.

    Called the sales manager I had been dealing with in the Bay Area and asked if they would match it. Their reply? Nope — and the guy went on and on about how I wasn’t eligible for the extra incentives. So off to San Bernardino for me — for a fast, simple transaction that saved me a fortune. And every car I bought from that point forward with one exception, a 2017 Dodge Challenger that took three walk outs before we got a pretty amazing deal, was from down there.

    If you think that Ford dealer was bad — I’ve helped people buy Toyotas, Hondas, Mercedes, etc. — and any import store was far worse. I was checking out some AMGs on Stevens Creek Boulevard in Santa Clara — the big auto row for the South Bay and saw a $10K ADM on a pedestrian C-Class sedan on the showroom floor. The sales guy I was talking with was pretty cool — so I asked about it. He said it costs them next to nothing to do — and they had a percentage that would bite.

    Sure, you can call dealers greedy. But, hey, they’d be stupid not to leave money on the table — and there are plenty of dopes around ready to fork it over to them. I have no issue with them asking. Paying it? Never in my book.

  • avatar
    SoCalMikester

    if they can shrug off a 125k bump, they have absolutely NO reason to whine about “taxes” because apparently money means NOTHING any more.

    meanwhile, they wonder why nobody wants to work at their subway franchise for $8/hr

    • 0 avatar
      Art Vandelay

      Yes. Clearly you deserve a larger cut of their money.

    • 0 avatar
      mcs

      “if they can shrug off a 125k bump, they have absolutely NO reason to whine about “taxes” because apparently money means NOTHING any more.”

      I know a woman that hired the Rolling Stones to play a private concert for her birthday back in September.

      https://www.bostonglobe.com/2021/09/21/arts/rolling-stones-perform-private-party-hosted-by-robert-kraft-gillette-stadium/

  • avatar
    87 Morgan

    Richard Fisher Sr appreciates your patronage I am sure.

  • avatar
    Margarets Dad

    This is a joke, right?

    I’m glad there are dedicated, compassionate car salespeople out there, but they must be rare, because I’ve never encountered one.

    Want to know why people leave nasty reviews for car dealers? Because they deserve them.

    With everything else I buy, from clothing to groceries to stereo equipment to a cake at the local bakery, the transaction is usually handled by a professional making a good-faith effort to make sure I walk out of the store with what I need at a reasonable price.

    And yet everyone I’ve encountered working in car dealerships over the past 30 years has been a remorseless piece of sh!t looking to take me for all I’m worth.

    Sorry, not a lot of sympathy here.

  • avatar
    Jeff S

    I am not shedding any tears for most salespeople or dealers. I would just as soon order what I want and buy directly.

  • avatar
    d27XHy5HG

    It’s the $199 etching that’s insulting. At least they’re up front about the $125k mark up. As long as dealers resort to these tricks and lies, the car buying process will always be adversarial and inefficient.

  • avatar
    Lightspeed

    Nobody is holding a gun to your head to make you buy that car. You can buy a cheaper used car, an even cheaper older used car, or not buy at all.

    • 0 avatar
      Hydromatic

      “Not buy at all” sounds like the most reasonable and prudent answer. I’d wait another year or two before dipping my big toe back into the carbuying waters.

  • avatar
    Jeff S

    Agree not buy at all unless you are in desperate need of a vehicle due to loss or a completely unreliable vehicle that cannot be fixed. I have as much respect for most car salespeople and dealers as I do for most politicians. Many are sleazy and lower than pond scum but there are exceptions as with anything.

  • avatar
    deanst

    The concept is called anchoring. Show someone a product at a very ridiculous price (+ $125,000) and when they get it for a merely ridiculous price (+ $50,000) they will believe they are getting a bargain.

  • avatar
    Flipper35

    When we bought our Pacifica 20 months ago there was a guy buying a used Raptor and he used his credit card to pay for it.

  • avatar
    Arthur Dailey

    I have been buying, selling and leasing vehicles for well nigh 5 decades. And possibly around over 100 vehicles overall. For my immediate family, other relatives and for businesses.

    Yes, I have met some less than reputable sales staff. And primarily they were employed by less than reputable dealers.

    However at least in the GTA, most dealerships are now owned by conglomerates/large corporations. And they do largely follow rules.

    And over the years I have dealt with and/or come to know some thoroughly honest, and respectful vehicle sales reps.

    I do have some stories regarding ‘disputes’ which sometimes were not settled ‘amiably’ or negotiations that went on into the night, but those were largely in the 20th century or with reps/dealers who are no longer around.

    As to dealership service, well their service reps are often reimbursed for overselling. I strictly follow the manufacturer’s service requirements, and inform them of this. It has been decades since any dealer has tried to circumvent this with a ‘wall job’ or other disreputable practice. Yes dealerships charge far more for service, but they also have higher overhead. Once out of warranty, my vehicles go to my local independent.

  • avatar
    jkross22

    Opinion: 5-10% of dealers have earned markups. The remaining 90% or so are poorly run operations with sales prevention team members ready to take what should be an enjoyable experience and turn it to merde.

  • avatar

    Earned ? No, simple supply and demand. I just checked my local VW dealer to price a GTi. None, nada, zip. Two ID4, Two Tuaregs, One Atlas. Two base Jettas.
    The example of a G-wagon with a 125k markup doesn’t mean much…a G wagon is F U money, always has been. The typical buyer can be soaked, they are already buying way above need or practicality.

    Dealers are good at maximizing price. Want a Mugen Honda ? An ATS-V ? Oh, you’ll pay…or someone else will. Years ago I saw a 10k ADM on a Mugen Civic, putting it in BMW 6 territory. This is singlehandely why all the good work Cadillac did on the V series cars failed…dealer greed. I tried to buy an ATS-V but the dealers thought they had 911’s on the lot.

    Now that ALL cars are this way, they have two, they’ll wait for the guy who’ll pay 5-10k over MSRP. They don’t care about you or your sale, they have two, and will wait for the one stupid, desperate, or simply rich guy who doesn’t care.

    Deserve ? No. The one guy in the dorm who has weed for sale can charge $50 per 1/8 for as long has he has a monopoly.

    • 0 avatar
      28-Cars-Later

      “This is singlehandely why all the good work Cadillac did on the V series cars failed…dealer greed. I tried to buy an ATS-V but the dealers thought they had 911’s on the lot.”

      I agree with your overall point, and argue that is in part GM’s problem for not reigning this in, but it is Cadillac’s fault for making the lesser models suck so much in the first place that dealers can bend over the customers so badly. Ok here’s the CTS-V, so if you want mag-ride, a manual, turbo or whatever other icing on the cake you pay. But here is the CTS with a standard LSx offering a decent foundation the V builds on. Instead the CTS offered runs on the same platform as V but is otherwise a completely different (and sh!ttier) car.

  • avatar
    sirwired

    Dealers absolutely have done this to themselves over the years. The 4-square worksheet, selling customers random useless crap at ridiculous markups (if I have another dealer try to sell me “Teflon” car wax for $$$, it’ll be too soon), dishonest games (and outright lies) on financing, low-balling trade-ins (accompanied with more lies), etc.

    It’s all been built around taking advantage of people who only do this a few times over their entire lives, and fleecing them for all they can get.

    If I go into a store to buy a drill, there will be a price on the shelf, and that’s probably the one I’m going to pay. And if I want to compare it with shopping elsewhere, I can do that easily. The most they will try and sell me as an add-on will be an extended warranty at a modest cost. They are not going to offer me a price, and then, when it comes time to sign, change their minds because “the manager” didn’t agree to it.

    I don’t know what dealerships you’ve worked at, but they sure aren’t the ones I’ve been shopping, ’cause they consistently treat me like a mark, and not a customer.

  • avatar
    Davidavemian

    Lots of complete bullshit in this thread. I’m a car salesman of about 10 years

    The reality of the situation is, before the pandemic, the business had gotten to be just ridiculous in how every car was being discounted. We were discounting the most desirable 60k pickup trucks to where it was a net net 500 dollar deal. That’s 0.8% profit margin. There is no other business in the world where the profit margins are that small on such an expensive item – every other business is a 10-20K profit on a 60K product minimum yet the people in this thread are the same people who would cry and write bad reviews if the dealer tried to make 2K instead o 500 on that pickup truck

    Customers are worse than salespeople. I can’t tell you how many deals I’ve lost over 200 300 400 500 dollars. I work hard at my job – I can’t tell you how many people come in and I have to explain to them just about everything on the car, pick out the trim level, go on a test drive, spend 5 hours going back and forth on emails and the people to buy elsewhere over 300 or 400 dollars on a 40k car is just hideously insulting. Customers are every bit as greedy as dealers

    And you guys wanna talk about lying? You don’t think Customers lie? Do you know how many people have told me they’re not looking to buy for 3 months and buy elsewhere the next day? It was blatantly a stall tactic so they can shop the price at other dealers. Do you know how many customers tell me they need their wife but then they go down the street and buy the same day? Again another stall tactic to shop the price. Do you know how many customers promise they will buy the car at some stupid offer, I get to that offer and they still back out?

    You guys seem to think that dealers make a gazillion dollars. We don’t- right now the profit margins are ridiculous but under normal times, even a sticker deal (which used to be very rare) was maybe 2-4K profit. We consistently sold 30K cars that the store made a 1000 dollars on and I personally made 100-200 dollars…for 4 hours of work. And you might say that’s decent per hour but in our business, you go through long droughts where you don’t sell anything

    I’m not like the salespeople you guys complain about. I am extremely clear in my communication, I never promise a price I don’t stick to, I don’t lie about financing options, I don’t lie about trade ins, I know my product very thoroughly and I’m extremely polite and friendly to my customer. I have a big book of repeat business. With that being said, most of the people in this comment section are exactly the people who used to come in and offer 4,000 dollars off on a 25K car…so we should work for nothing meanwhile you guys charge exorbitant profit levels at your job that are 20 times higher than mine.

    BTW car salesman are all 100% commission. When you come to a dealer, test drive, ask a million questions over a 2 hour period and don’t buy, that’s a big fuck you to us. That’s the equivalent of taking up a servers time for 4 hours and not tipping at all

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