Dealers

[thill]

Originally Posted by kwood9000

I would say that many car purchases are less logical and more emotional. Car salesmen know this and use it to their advantage.

I would agree that car purchases tend to be emotional, but it does not need to be.

It is your money you are spending, be logical and don't let the emotion control the deal.

That said, it is amazing to me how people lost all sense of logic and reason when buying a car.

When I was in the military I used to watch privates who made very little money buy cars they 100% could not afford. One case in particular, it was a E2 Private (who I was responsible for) who was like 19 years old and bought a brand new loaded Camaro. I asked him to show me the paperwork and the dealer took him to the cleaners. MSRP, paint protection, extended warranty, and all kinds of upgrades and accessories. This was 1997 or 1998 and and it was a new Chevy Camaro. It was crazy. I took him back to the dealer, and told the dealer to void the deal or I would have them blacklisted by the Army and the entire base. I was pissed (I am also a big guy). They voided the deal and we went to a different dealer and I helped him get a gently used Mitsubishi Galant and payments he could afford.

[YukiHachiRoku]

Originally Posted by kwood9000

I would say that many car purchases are less logical and more emotional. Car salesmen know this and use it to their advantage.

It depends on the person's personality type. My dad is a cold calculating analytical logical buying type, he throws emotion out of the window. (I envy him for this, because I just can't do it, even if I try hard)

Myself on the otherhand am a total "grape" and when I bought my STi I was literally foaming at the mouth and emotion was running wild.

Yeah, salespeople in general expliot this human deficiency a lot.

[mines13]

Originally Posted by thill

I would agree that car purchases tend to be emotional, but it does not need to be.

It is your money you are spending, be logical and don't let the emotion control the deal.

That said, it is amazing to me how people lost all sense of logic and reason when buying a car.

When I was in the military I used to watch privates who made very little money buy cars they 100% could not afford. One case in particular, it was a E2 Private (who I was responsible for) who was like 19 years old and bought a brand new loaded Camaro. I asked him to show me the paperwork and the dealer took him to the cleaners. MSRP, paint protection, extended warranty, and all kinds of upgrades and accessories. This was 1997 or 1998 and and it was a new Chevy Camaro. It was crazy. I took him back to the dealer, and told the dealer to void the deal or I would have them blacklisted by the Army and the entire base. I was pissed (I am also a big guy). They voided the deal and we went to a different dealer and I helped him get a gently used Mitsubishi Galant and payments he could afford.

Excellent leadership.

[YukiHachiRoku]

Originally Posted by thill

I would agree that car purchases tend to be emotional, but it does not need to be.

It is your money you are spending, be logical and don't let the emotion control the deal.

That said, it is amazing to me how people lost all sense of logic and reason when buying a car.

When I was in the military I used to watch privates who made very little money buy cars they 100% could not afford. One case in particular, it was a E2 Private (who I was responsible for) who was like 19 years old and bought a brand new loaded Camaro. I asked him to show me the paperwork and the dealer took him to the cleaners. MSRP, paint protection, extended warranty, and all kinds of upgrades and accessories. This was 1997 or 1998 and and it was a new Chevy Camaro. It was crazy. I took him back to the dealer, and told the dealer to void the deal or I would have them blacklisted by the Army and the entire base. I was pissed (I am also a big guy). They voided the deal and we went to a different dealer and I helped him get a gently used Mitsubishi Galant and payments he could afford.

Conversley, This reminds me of the time I sold an RX-8 to the Base Commander of Hickam AFB, in Hawaii, he was an F-16 Pilot, came in in his flight suit, was buying the car for his wife's anniversary gift and we gave hime below MSRP and treated him very well becasue we wanted him to send his airmen to our dealership so we could give them good deals and sell more cars while keeping a good reputation for our dealership.

That was cool how you took care of the private and laid the law down on that dealership.

[MattR]

Originally Posted by thill

When I was in the military I used to watch privates who made very little money buy cars they 100% could not afford. One case in particular, it was a E2 Private (who I was responsible for) who was like 19 years old and bought a brand new loaded Camaro. I asked him to show me the paperwork and the dealer took him to the cleaners. MSRP, paint protection, extended warranty, and all kinds of upgrades and accessories. This was 1997 or 1998 and and it was a new Chevy Camaro. It was crazy. I took him back to the dealer, and told the dealer to void the deal or I would have them blacklisted by the Army and the entire base. I was pissed (I am also a big guy). They voided the deal and we went to a different dealer and I helped him get a gently used Mitsubishi Galant and payments he could afford.

[thill]

Originally Posted by YukiHachiRoku

Conversley, This reminds me of the time I sold an RX-8 to the Base Commander of Hickam AFB, in Hawaii, he was an F-16 Pilot, came in in his flight suit, was buying the car for his wife's anniversary gift and we gave hime below MSRP and treated him very well becasue we wanted him to send his airmen to our dealership so we could give them good deals and sell more cars while keeping a good reputation for our dealership.

That was cool how you took care of the private and laid the law down on that dealership.

Yes, for the record there were some preferred dealerships, and like you, they took great care of us. There were also blacklisted dealers, and lots of fly by night used car lots that you had to watch out for. Part of being an non-commissioned officer in the Army was watching out for young soldiers making bad decisions and getting taken advantage of.

The military was a breeding ground for this kinda of thing. You have a bunch of young men that are out of the house (many for the first time) who had little to no idea about budgets or financing suddenly get a paycheck. Your meals and food are provided so they think they can afford a $500 a month carpayment. And some dealers knew it and took advantage.

I saw a lot of people get in over their heads with cars while they served...

[AshWilliams]

Originally Posted by TuxedoCartman

I cited my purchasing history to squash the first of those statements, not to boast. As for how do I feel so confident making such a statement? Average age of buyer + average number of years between new car purchases, compared to my own personal history.

I've bought two Civics, one Accord, one Land Cruiser, a 4Runner, a Tahoe, a Denali, an Impreza, an FJ Cruiser, and a GMC pickup by myself, except the Subie which was with the wife--I've also bought used cars, but chose to omit those. For the fleet buys, I bought three GMC pickups, an HD Suburban, two Dakota pickups, and a Sprinter Van.

NONE of those were pleasant. The Japanese dealers were far more slimy, with Toyota by far the worst and Honda a close runner up. Toyota took my deposit for the FJ Crusier, back when it was still selling for a premium, then suddenly said that the way the car was configured wasn't available, I needed to buy a package for 3 grand more (all it seemed to be was floor mats, wheel cover, and overpriced Pirellis), and if I didn't like that they'd keep my deposit because I was backing out of the deal. The 4Runner came with a bunch of overpriced port installed options (roof rack and spoiler) that made the roof and liftgate rust because they were installed by idiots, that the dealer tried to get me to buy for 1500 dollars despite ordering the truck without them.

Subaru tried to sell me a wax application that costs an extra 20 bucks per car statement (over 60 months) that they will apply for me every 6 months and told me that if the car rusts, they won't cover the paint warranty. Then they told me that I need to finance with their bank, which was offering a crappy 8% when everyone else was offering 3. Honda mostly tried to peddle interior protection, undercoatings, wheel and tire warranties, and other crap that nickeled and dimed the price up substantially, but they managed to bury it in the price of the car AFTER we had negotiated a price and during the paperwork shuffle.

GM was hit and miss, but the two cars I bought from them I got during their employee pricing (Denali) and 0% APR (Tahoe). While it's easy to get a deal on a GM, when I got the Denali, a friend was telling me how he got a great deal on a truck from the same dealer at 3000 below MSRP. I told him that they were offering employee pricing, had screwed him, and he should have gotten it for 4.5 below.

Most dealers have a fleet truck sales guy. But he doesn't always understand that if you're going to buy 3 trucks for close to 80 grand you're really looking for a rock bottom price, don't care what brand they are or if they're last year's inventory, and will shop around and DRIVE three states away if necessary. I bought 3 cheap-o W/T's for 200 bucks over cost, each, from a fleet dealer in Texas and towed two of them on a trailer home with the third. The same guy thought I was his buddy and didn't want to give me a good price the second time, said that I "owe" him for giving the three trucks to me, so I bought two Dakotas for a similar deal from a dealer in Florida.

[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...

[fistpoint]

Originally Posted by AshWilliams

American car dealers lobby congress to SPECIFICALLY prevent what you are describing. Car dealers exist only to mark up cars between the manufacturer and customer and make excuses for profiteering when they are creating an artificial market where the customer has NO CHOICE but to buy from a dealer network. If there was the option to buy directly from the factory, dealers would be kept honest by having a realease valve for their ludicrious prices.

You honestly think the manufacturers would be against selling directly to the public?

OK. Then lets get rid of the useless and usually un-knowledgeable salesman instead.

You go into the dealership and use a kiosk to pick what options you want, which is how the system I described in my earlier post works. Now the dealership gets all the profit and doesn't have to pay a salesman to fill out paperwork(which is already paid by the consumer anyway), or a cut of the sale.

My suggestion is not only good for the consumer, but good for the dealership.

If all you salesman constantly complain about how little you make, go find another line of work!
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Originally Posted by AshWilliams

What do you like about the franchise model? That you get to pay a premium for the privilege of the dealer selling the car to you?

What is this "excellent service" that people are willing to pay extra for instead of getting the best deal for a car? Are the waiting room donuts that good? Is the basic level clerical work they go to get you financed (that any bank or website can do) that critical?

Lol, donuts.

I've only driven Honda's for the past 20 years and with the exception of oil changes, the dealer has done NOTHING for me from the second I drove off the lot on day 1. Oh, I guess the friendly "happy birthday email" is what we're paying for, in addition to the donuts that I never get to eat because the car never breaks.

+1 for your post.

[Matt Andrews]

I seem to get into a conversation on this topic about once a year. People who get passionate about it are car enthusiasts who do truely seem to know what they want, they know a lot about what they want, and they don't buy spontaneously. Most of Americans are not this way. These people benefit from a good sales person. (I'm not arguing that all are good, or in mass production manufactures even a high percentage of them are good) If the sales person-less or mail order or manufacture owned / no haggle dealerships worked, or were more profitable than the current model, they would exist. Carmax didn't take over the world. Neither did Saturn (who started as manufacture owned showrooms). Most buyers are not like people on this forum. They don't know what they want, need someone to tell them, and honestly, buy when they receive some sort of pressure.

There is a fine line between applying pressure and being dishonest. I in no way endorse lying or the funny math that used to go on in finance departments. But a good sales person can help a person understand what their needs are, define their buying criteria, and then help close a deal. IMO, people instinctively want a deal. If one price, take it or leave it worked, that would be the way dealerships worked.

[chris@wagnersubaru]

Originally Posted by fistpoint

OK. Then lets get rid of the useless and usually un-knowledgeable salesman instead.

You go into the dealership and use a kiosk to pick what options you want, which is how the system I described in my earlier post works. Now the dealership gets all the profit and doesn't have to pay a salesman to fill out paperwork(which is already paid by the consumer anyway), or a cut of the sale.

My suggestion is not only good for the consumer, but good for the dealership.

If all you salesman constantly complain about how little you make, go find another line of work!


+1 for your post.

Americans will never buy cars this way, unless it does indeed become the norm.

Americans want a car now when they go shopping....not weeks from now.

That's why dealers not only have to keep a large inventory on hand, but also seem to have to do a lot of trading around because out of the 100 cars we may have in inventory at any given time, the ones we have are never equipped just right.

Auto nation tried to revolutionize the business and failed miserably.

Saturn is no longer around, and I'd say it's only a matter of time before Carmax goes away too.

By and large, everyone is conditioned to and likes to beat up a sales guy for a "good Deal"

[86'd]

Originally Posted by chris@wagnersubaru

Americans will never buy cars this way, unless it does indeed become the norm.

Americans want a car now when they go shopping....not weeks from now.

That's why dealers not only have to keep a large inventory on hand, but also seem to have to do a lot of trading around because out of the 100 cars we may have in inventory at any given time, the ones we have are never equipped just right.

Auto nation tried to revolutionize the business and failed miserably.

Saturn is no longer around, and I'd say it's only a matter of time before Carmax goes away too.

By and large, everyone is conditioned to and likes to beat up a sales guy for a "good Deal"

You mean this Autonation?

And this Carmax?

They look like they're doing OK.

My wife purchased her Prius through Autonation Direct and it was probably the least stressful, easiest car buying experience we've ever had. We even got the car for less than MSRP.

I now recommend them to all of my friends and family when they decide to buy a car.

In the end I know its just a glorified Internet Sales Manager, BUT that's who people should be dealing with.

[TuxedoCartman]

Originally Posted by chris@wagnersubaru

By and large, everyone is conditioned to and likes to beat up a sales guy for a "good Deal"

No, they don't.

[Turbowned]

Originally Posted by TuxedoCartman

No, they don't.

From my brief experience in sales, many people seem to care more about getting "a good deal" than they care about getting the best product that's priced right to begin with. I can't tell you how many people I lose because a nearby dealer is out knocking $5,000 off MSRP while I calmly explain to them that we only have 6% mark-up in our cars, and that our manufacturer doesn't offer "hold-back" money, so if we sell a car for cash at invoice, we make zero money. Or when I explain to them that a comparable vehicle with the same features costs $7,000 more than our product, and our product is superior. It's all about "what can you do for me", "what's the best price", blah blah bullshit. I even show people the invoice and they still make a point to offer me thousands of dollars below. They say consumers are more informed these days than ever before, and yet most people still just don't seem to get it.

Again, I still wish the manufacturer would set the price, and people would pay it, and dealers would be fair about trade-in values and not try to take advantage of people with useless products like undercoating. Or better still, dealers would sell cars at invoice for zero profit, and make up for it in the service department where your wallet is really getting hurt

My viewpoint may be a little skewed as I work in highline sales and my sales staff is very friendly, helpful, and for the most part, honest. My finance manager is a crook, but most of our customers are smart enough to not buy into his B.S. When he's gone we'll be a much better place. And I know the dealership model is flawed. I just don't see any immediate solution that will get the old dogs to learn new tricks.