[TuxedoCartman]

Originally Posted by Matt Andrews

Its the most effective route to market for keeping cost down. This is a clear benefit to the american public. Manufactures excel at completing a finished good. But not at taking it to market. The cost of managing inventory turns, handling distribution, setting up retail store fronts, providing service centers,etc is not generally what manufactures do well. The only one I think that does it well, is Apple, but I am sure there are others. The consequence is essentially pricing fixing by the manufacture which is great for the manufacture as they fight margin compression - but not great for the consumer. When multiple companies offer the product (ie - dealers) there are federal laws that prohibit price fixing. When only one company holds all the stock, there is nothing to ensure you as the consumer get the product at "market" price as they set market price.

Here is something you may find counter intuitive. There is very little margin in new car sales now. Most dealerships see service departments as the profit center, and the new/used car departments are simply there to break even and create new customers for service. Look at the margin between invoice and what people actually pay. Include hold backs, dealer incentives, and what ever you think the dealer makes in the finance department. Its ridiculous if you consider then the cost of carrying inventory, keeping the lights on, insurance, oh - and paying people.

Here in lies the problem IMO. There is rarely enough money paid to the sales people as incentive for them to learn the product or stick around. Turn over is really high. The "good" ones move to other industries, other parts of the business, or move to higher end brands where there is margin. The sales person for my wife's lexus and mercedes were awesome. But they also have been there for a long period of time, and are actually sales people making a decent living - not warm bodies put in place to take your order. But this still doesn't mean that they are all bad people - but I do think it matters what you are buying.

Here is a tip - call the dealer before you go. Ask for the new car manager. Ask who his top sales person is on duty and set an appt with this person. Make sure they know you know the product, and you want someone who does as well. The best sales people are working with customers, and won't have time to come greet you on the lot as a fresh "up".

good luck with your purchase. No car is worth getting so mad you want to punch someone. You only get yanked around if they think you are yank around - able.

Matt

I really, really, REALLY want to take the time to properly respond to everything you wrote, but I've got to run very shortly. Very well stated, though I disagree with some assertions I'll come back to later, particuarly about the economics of franchise dealerships vs. manufacturer owned showrooms.

But I wanted to take one moment to address your last statement. "No car is worth getting so mad you want to punch someone. You only get yanked around if they think you are yank around - able." I've given this some thought, since you're not the first to state such a thing to myself, or others who share my frustration. And I feel that it might have that it might have something to do not with what kind of person you are, or your disposition or personality per se... but whether or not you are a haggler.

I know some people live for haggling; I, on the other hand, can't imagine a worse hell. I research every car I buy from top to bottom before I ever even think of stopping by a dealership for a look; I know the horsepower, engine and suspension details, interior & exterior package details, MSRP and invoice costs as well as what similar models are selling for around the country (or as is more often the case, at that very dealership)... everything. I've paid cash for every set of wheels I've owned, with few exceptions, so financing haggling doesn't apply to me. I either like the price, and will pay it; or I don't like the price, in which case I go elsewhere from the start. I do not feel this is very common behavior for auto buyers.

Therein I believe, is the problem. I think dealers see a person who, when told that the price is $XX,XXX, and simply agrees to pay it... as a pushover. "If he won't haggle on the price, we can milk him on the extras," they seem to think. Which may explain why I get the extra-hard sales for the bullshit wax & vinyl treatment. They're too used to when a person says "No," hearing instead, "Well... let's talk some numbers."

For a person who does not like haggling, and considers himself quite polite in everyday dealings, having to repeat yourself no fewer than six times that no, you do NOT want paint protection (not to mention the indignity of being a well-researched car buyer, and knowing such things are simply overpriced coats of wax that they're pushing on you)... it's like nails on a chalkboard. People like myself WANT a simple, "Here's X money for Y car, thank you, good day" transaction, and are forced into dealing with that kind of bunk. It's beyond annoying.

And no, you really can't go elsewhere; not if you live outside of the cluster of major metropolitan areas in the Northeast or Southern California. Frequently, a lot of the dealerships are even owned by the same problematic people. For example, 10 years ago in Kansas City, Jack Miller Subaru was on my won't-go-there-again list (maybe they've changed, dunno, don't care... that was ten years ago, and just using them as an example). Unfortunately, they owned 2 of the 3 dealerships that were within an hour-and-a-half drive of my house. Come to find out, the other one was almost but not quite as bad. So what am I supposed to do? Drive to Tulsa to get service on my car? Not feasible. Go without a car? Can't, not in that part of the country. Buying another brand doesn't help, not when all the cars sold in the same price-bracket have the same scummy dealership service (FWIW, buying more expensive does make a difference at times. The one good salesman I mentioned earlier? He worked at Aristocrat Motors off of I-35. Land Rovers, Porsches, and Jaguars... and was never once mistreated while he was there).

I'll be back later, because I really wanted to address your economics ideas, and ask some questions... but ack! Real-life stuff to do! Stupid real-world...