While it's a terrible situation, it is endearing to see people think on their feet during the pandemic. It would be nice to see some of these methods spread and stick around.
It's nothing personal but I loathe negotiating and dealing with car salesmen in the traditional process. I want people to get paid fairly without feeling like I'm being taken advantage of.
I just bought a car and at a certain point during the negotiation I was like... this is weird, subaru is gonna sell thousands of 2020 outbacks, why is there not just a set advertised price.
I agree that is how it works presently in the US. Nonetheless, parent's comment is interesting to consider. Why is it that way? Why don't Subaru etc just set a price, you buy the car, and be done with it? The answer is either that it works better or that it's too hard to change. The latter explanation seems facile; with so much money, people and tech involved, it seems likely that the status quo would have already changed to having fixed prices.
Years ago, Saturn dealerships sold new cars at a fixed price. No negotiations. I considered one and rejected it as the price seemed too high. Didn't even talk to a sales rep. The current car sales regime nearly forces me to talk to somebody, and then they can hound me until I buy or they give up.
It might be possible for car manufacturers to motivate sales through some other means, but apparently this way works, no matter how sucky it is.
It really is that car dealerships are very wealthy and have a lot of political clout. There were also early rulings that a manufacturer can't order a car dealership how to operate - the basics of the case were that American manufacturers were lending or outright granting money for people to start dealerships. Those dealerships started trying to sell foreign cars, the manufacturers said "no way", the dealerships fought back, and the dealerships won.
Basically it's become a textbook example of the entrenched parties setting up barriers to entry. They have lots of money, and are often active in their local communities, so people generally like them.
Edit: basically, I'm saying it really is too hard to change because the law is on the dealerships side, and there's a lot of momentum and status quo to overcome.
It's a nice cozy relationship. Many car dealership franchises are basically state-granted hereditary monopolies that print money, so of course they are going to put some of that money back into the community (and local/state politicians pockets) to maintain that. It's good for the politicians because they actually have some leverage over dealers, as opposed to a behemoth like Toyota or Volkswagen.
I don't mean this as a joke, but I thought people generally hated car salesmen?
Here in Japan, the manufacturers do actually set a recommended retail price that is slightly higher that what dealers often sell at. Example using the Subaru Outback mentioned up top, shows three available grades sold starting at 3,410,000yen. Roughly us$30k.
They hate car salesmen, yes. But oddly enough "Family Jones Chevrolet/Ford/Toyota/Nissan/etc." has been sponsoring the local little league team for 20 years, so they don't have to do much to convince the locals to tell their state legislators that "protecting" these "family-owned" dealerships is good.
Car prices are the same as any other consumer goods prices: there is a MSRP and, unless it's some rare, high demand model, you can always buy at the MSRP. Unlike other consumer goods, though, it is worth haggling because the retail markup is in range of several thousand dollars and the dealer is interested in your business (maintenance, warranty repairs) enough to forfeit a part or the whole markup. Depending on the incentives, a dealer might be even considering selling under the invoice price. Also there are other components of the deal, not happening often with other goods: trade-in and financing. You cannot put a fixed price on those.
But if you really don't care and want to buy a car for cash at MSRP you can do it with little to no hassle.
There is a set advertised price, at CarMax. I always go there. But the negotiation allows more information to pass through the transaction. Is the dealer eager to sell because this car has been sitting on the lot (they overestimated its value)? Is the buyer eager to buy because they hate comparison shopping? This way the comparison shoppers and splurgers both end up paying close to what the car is worth to them, rather than being charged some average price that leads to fewer sales to the shoppers and less profit from the splurgers.
This American Life had a great episode called "129 Cars" about the overall dealership phenomenon.
> We spend a month at a Jeep dealership on Long Island as they try to make their monthly sales goal: 129 cars. If they make it, they'll get a huge bonus from the manufacturer, possibly as high as $85,000 — enough to put them in the black for the month. If they don't make it, it'll be the second month in a row. So they pull out all the stops.
I actually find with all the information that is available to consumers these days through various websites and forums that it is very easy to take advantage of the current system in your favor.
It’s important to remember with new cars there are a number of ways the dealership gets paid not just what they the sales price is for a car. There are holdbacks from the manufacturer where they pay a certain amount per car sold. The amount often goes up based on hitting some sales goal for the month. On top of that there are other manufacturer incentives once again usually based on a specific sales goal whether on a particular model or just overall. Not to mention the profit on any trade in.
If often makes sense for the dealer to sell an individual car at a loss to help them make these goals.
So what exactly is the new tactic? I scoured the article but they never seemed to explain what the new tactic is, other than the phrase "working deals over Zoom and text messages."
She wasn't ready but is looking to change carstyle. I think she'll have come back, if he gave her a hassle free non sexist chance to enjoy the Jeep. Telling a customer what she wants is a good way to make her walk, my partner does, every single time.
The Wrangler drives very differently than a Lincoln. They look awesome, but they are the polar opposite of a luxury vehicle. Heavy, slow, loud, limited towing, "outdated" manual transfer case... Makes sense for going off-road, or for customizing, but not as a luxury SUV. (And my wife talked me out of one twice! )
The other Jeeps are just cheap crossovers.
I found a perfect 4-door, 10-year-old Wrangler to buy while I waited for my Tesla, and then keep to take on the beach, but my wife decided she wanted a minivan instead.
It was not mentioned in the article, but it seems like there’s also lower inventory on car lots due to the slowdowns and closures of auto plants in the spring.
That was true a few months ago, but things have changed.
Many North American factories closed down or curtailed production in the March-April-May timeframe. There was a rebound in demand as spring turned into summer (which was a major point in the article), but the supply chain to deliver the vehicles to meet that demand had stalled.
"growth in supply has yet to catch up to demand" (11 Aug)
"The car shortage is a big story. Between people moving to the suburbs and avoiding public transportation (so they need cars) and the factories having shut down or slowed down due to COVID, we're running out of available cars." (5 Aug)
I tried to buy a new car and ended up not buying anything due to stubbornness of salesmen.
I couldn’t care less about personal interaction with sleazy salesman and when buying new car I just need the right price, not the sales dance done in person and all this “let me talk to the manager” BS.
When salesman quotes me MSRP on my answer on the best deal - this is conversation over.
When they stop treating customers like idiots they’ll get more business and more sales.
I think your approach is off. If you're serious about buying, you should state your price, and ask if they accept. Not play hardball and ask them to come up with a number.
I bought my last new car with price negotiated on the phone before even showing up at the dealer.
The hardball approach never worked for me. It's best to just know your max OTD (Out the door with taxes and fees) price and offer that.
If you have a Costco membership, I highly recommend you contact the Costco Auto program [1]. They pre-negotiate a discounted price with nearby dealer on your behalf.
If you work for a large company, or one that is a supplier to automakers, I highly recommend researching whether your company is part of the make’s corporate discount program. The prices are often in the neighborhood of employee pricing, and often publicly-advertised incentives will stack with the corporate discount.
I bought a Rav-4 in 2018. When I was price-shopping, I included Costco Auto in my search. They weren't the cheapest (although they were very low-hassle), but they were close to the best price I could get from a nearby dealer.
In the end, I went round-robin with a few dealerships (taking one dealership's offer to another dealership and asking them to beat it), and wound up with a price around $1000 less than the Costco Auto price. I had to drive an hour to get the car, but that's no big deal in the long run.
So my two cents is that Costco Auto maybe hits a sweet spot between "don't want to negotiate" and "good price". But if you enjoy the thrill of the hunt, you can probably do better than the Costco Auto prices.
It's not uncommon for popular models to sell at MSRP or above. That's just supply & demand.
The dance is extremely annoying, though. I've leased 4 cars since 2011: 3 Mercedes and 1 Honda CR-V. I wanted to lease another CR-V, but the dealership reneged on the price so we just went back to our trusty sales rep at the Mercedes dealership who always comes back with something reasonable in a matter of hours--not especially low, but no B.S. and no pressure tactics. The Mercedes is of course more expensive, but after splurging the first time it's hard to stop the cycle given the customer experience.
I want to buy something to replace our 20-year-old Civic. Probably not a Mercedes, because of long-term costs, unless we buy over our current lease. But it's really no fun dealing with typical dealerships, and the good family cars (e.g. Telluride, CR-V, etc) are really popular and the dealerships know this.
I recently learned that there's a boutique car shopping consulting industry where you pay a few hundred dollars for someone to provide advice on models (including family haulers, not just high-end sports cars), and then to solicit and secure offers on your preferred models. I might try that next time around.
I did this with a Honda minivan a few years back. Got one of these buying agents to negotiate and get the deal. Just went into the dealership and got the car. In and out within 15-20 mins to sign paper and pick up the keys.
I can relate about the dance though. The popular Japanese imports last basically forever and the salespeople’s tactics aren’t great. I’ve said to myself more than a few times I’d get a Tesla so I could just get everything done in a web browser.
> I recently learned that there's a boutique car shopping consulting industry where you pay a few hundred dollars for someone to provide advice on models (including family haulers, not just high-end sports cars), and then to solicit and secure offers on your preferred models. I might try that next time around.
I can't recommend these services enough. I've never actually paid them anything upfront to search for cars, but many of them are semi-retired car enthusiasts from finance or tech who can afford to get used dealership licenses and start their own business. They'll help anyone but their inventory is well curated and often priced for velocity rather than profit maximization. They'll hang onto $100k classic to get the right price but will happily take a client's low mileage 201x Toyota as a low risk trade-in to get them into a the right Mercedes they want and then flip the Toyota a week later for a few thousand under blue book just because they've got limited parking space.
I used https://mycarguy-sf.com/ in SF and http://halo-motors.com/ in Seattle (latter are actually in Bellevue). Ironically both sites look like used car lots with very limited inventory but I discovered the former from a yelp search for "car consultant" and ended up buying a Mini Cooper from his lot. The latter was recommended to me by a friend whom Halo Motors helped find a semi-classic but I again ended up buying an underpriced Toyota from their lot.
A nice side benefit is that most of these mom and pop dealers will sell you secondary warranties at cost, which was a big deal when I was a first time car buyer with a post-BMW acquisition Mini Cooper with a CVT but I drove that car into the ground so it wasn't a consideration the second time around.
I saw some names recommended in the leasehackr.com forums, but only the forum handles. I haven't gone back to track down proper contacts. But that piqued my curiosity and when Googling one of the first hits was https://automatchconsulting.com/. I haven't dug any deeper since then. The other recommendations else thread look promising, too.
The last time I bought a car, I got the direct number for a salesman. I texted him and told him which car I wanted (including inventory number, available thanks to their website), what number would get me in the door, and I would walk in the door and sign paperwork _at that number_.
It worked surprisingly well, and cut a lot of the bullshit out.
> I couldn’t care less about personal interaction with sleazy salesman and when buying new car I just need the right price, not the sales dance done in person and all this “let me talk to the manager” BS.
That "talk to the manager" BS worked out in my favor the last time I bought a car. I had been leasing a Honda CR-V, for stupid reasons [1], and when that lease was up wanted to buy a new CR-V.
I found a dealer online about an hour or so away with a good price for online purchases. But I wanted to at least do a test drive of the new models first, to make sure Honda had not made any changes that would sour me on it.
I went to a nearby dealer to do a test drive, intending to tell them I was just looking. If I liked it I'd then buy from the online dealer.
After the drive, the salesman names a price. I told him that I knew that the dealer an hour away would sell it to me for $X, which was less than the price he offered, but if they could match that price I'd buy from them.
He does the "I'll have to talk to my manager" thing. The thing is, this was a new salesman, and I think he was nervous. I don't think he actually listened to the price I named.
He comes back, and announces a new price they will let me have it for...and that new price is quite a bit lower than $X. I'm not kidding...I told him what I was willing to pay for the car, and he came back with a lower counter-offer!
I took it, and am still driving that car 14 years later.
[1] I normally buy rather than lease, but leased a CR-V for two years to see if I liked that form factor. When that was up, I leased another one for two more years, followed by one for three years. It was only then that I remembered that I has stupidly forgotten that the plan was after the first lease was up to either buy a CR-V, or go back to small sedans.
Is the tesla model ok for you or not? I'm curious.
You could look at it as no haggling (and no sleazy salesfolks), you could look at it as everybody pays MSRP or you could say everybody gets the same deal.
Pro salesmen make it look very friendly, very subtle pushing of subtle psyche buttons.
This doesn't work on me but whenever i ignore, walking out or confronting them - my wife typically trying to scold me for not being nice to nice saleman.
Which means their technique works really well on gullible people.
> Which means their technique works really well on gullible people.
Don;t tell that to your wife :D
And yes, they use it because it works.
But on me it has the opposite effect. The moment the salesman tries to help/advice me differently I get this creepy crawly feeling.
And I am a big boy now, so they cut it off or i am walking.
As introvert pleasing people so you can blend-in was my common go-to method. Any skillful salesman will walk all over you if you let them.
I soon learnt salesmen are not your friends, so I don't treat them like you owe them something.
I might have walk away from some good deals, but in my mind supporting an asshole by doing business with them only propagates that culture and behaviour. And I rather walk away then be part of it.
I bought a car less than a year ago and actually had a surprisingly easy time. I don't if it's a Hyundai specific thing, but a most of the dealerships around me advertised "no hassle" pricing (I forget if that was the exact term). I knew the car and trim and color I wanted, I could see which dealerships had it in stock and requested a quote online from 5 different dealerships near me. Within less than an hour I got back a price quote from most of them, they were all kind of an expected amount below MSRP, but one was a full $1000 less than the next best price. I texted the salesperson, went in, test drove it, and left with the car an hour and a half later (the process of registering it and getting all the paperwork sorted out was still painfully slow and annoying, but at least I didn't have to go to the DMV I guess).
I do appreciate being able to test drive a bunch of different models -- last time I was in the market I discovered my intended purchase was unsuitable and found a car which my online research had overlooked. I would've (probably naively) paid a small premium to buy from the same place for that service, but man they threw the entire book of sleezy sales practices at me. At the end of the negotiations the best price they could do was an extra $8k in bogus fees on top of the already insanely overpriced sticker value. I walked, got a car a couple years older from a place across town for better than 4x cheaper, and have recommended everyone I know stay away from that dealer at all costs. I haven't regretted that decision a moment in the years I've had the car.
Car salesmen might have carved for the personal connection and face to face deals, customers dread it. It's much better to have a impersonal buying experience over phone and internet. No wonder dealerships adapted to the new approach thrive.
Two cars in a row on the line are not identical. Options and finish and engine and suspension and extra and milage and maintenance history and colour and metallic or plain.. the idea a car purchase is cookie cutter is probably as flawed as the idea all ThinkPad are the same.
I’m buying my first pickup. These are not cookie-cutter vehicles. The MSRP is a floor for sticker prices. Once you factor in trim levels, packages, engine choices, etc there’s a continuous gradient that runs from MSRP to 2x MSRP or more. When you have specific capacities for towing and payload that you’re after, plus some other options, it gets complex. The manufacturer’s site did not allow faceted search at the level that I wanted, so I wrote software to scrape the inventory, parse the option codes and stick the results in a Sqlite file so I could track inventory in the region.
My point is not that it's easy, or that having a guide is unhelpful.
My point is that the pretend song-and-dance of current car buying is ridiculous and anti-consumer.
And lots of people don't have complex requirements for their vehicles. Size, color, type etc. Which could probably literally be managed via an Amazon-style listing.
55 comments
[ 3.2 ms ] story [ 139 ms ] threadIt's nothing personal but I loathe negotiating and dealing with car salesmen in the traditional process. I want people to get paid fairly without feeling like I'm being taken advantage of.
Some companies, most notably Tesla, have come under fire in various states for selling directly: https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes
Years ago, Saturn dealerships sold new cars at a fixed price. No negotiations. I considered one and rejected it as the price seemed too high. Didn't even talk to a sales rep. The current car sales regime nearly forces me to talk to somebody, and then they can hound me until I buy or they give up.
It might be possible for car manufacturers to motivate sales through some other means, but apparently this way works, no matter how sucky it is.
Basically it's become a textbook example of the entrenched parties setting up barriers to entry. They have lots of money, and are often active in their local communities, so people generally like them.
Edit: basically, I'm saying it really is too hard to change because the law is on the dealerships side, and there's a lot of momentum and status quo to overcome.
Here in Japan, the manufacturers do actually set a recommended retail price that is slightly higher that what dealers often sell at. Example using the Subaru Outback mentioned up top, shows three available grades sold starting at 3,410,000yen. Roughly us$30k.
https://members.subaru.jp/estimate_simulation/index.html?car...
But if you really don't care and want to buy a car for cash at MSRP you can do it with little to no hassle.
> We spend a month at a Jeep dealership on Long Island as they try to make their monthly sales goal: 129 cars. If they make it, they'll get a huge bonus from the manufacturer, possibly as high as $85,000 — enough to put them in the black for the month. If they don't make it, it'll be the second month in a row. So they pull out all the stops.
https://www.thisamericanlife.org/513/129-cars
“How much would you be willing to finance?” “At this rate? 100x the price of the car.”
It’s important to remember with new cars there are a number of ways the dealership gets paid not just what they the sales price is for a car. There are holdbacks from the manufacturer where they pay a certain amount per car sold. The amount often goes up based on hitting some sales goal for the month. On top of that there are other manufacturer incentives once again usually based on a specific sales goal whether on a particular model or just overall. Not to mention the profit on any trade in.
If often makes sense for the dealer to sell an individual car at a loss to help them make these goals.
What boggles me is the lady who drove the Lincoln and tried the Wrangler. The salesman should have suggested a different vehicle.
The other Jeeps are just cheap crossovers.
I found a perfect 4-door, 10-year-old Wrangler to buy while I waited for my Tesla, and then keep to take on the beach, but my wife decided she wanted a minivan instead.
[1] https://driving.ca/nissan/auto-news/news/suvs-on-cargo-ships...
[2] https://www.google.com/search?client=firefox-b-1-d&q=cars+st...
Many North American factories closed down or curtailed production in the March-April-May timeframe. There was a rebound in demand as spring turned into summer (which was a major point in the article), but the supply chain to deliver the vehicles to meet that demand had stalled.
"growth in supply has yet to catch up to demand" (11 Aug)
https://www.spglobal.com/marketintelligence/en/news-insights...
"Auto dealers in states with new virus outbreaks have a bigger problem: low inventory" (20 July)
https://www.detroitnews.com/story/business/autos/2020/07/20/...
"The car shortage is a big story. Between people moving to the suburbs and avoiding public transportation (so they need cars) and the factories having shut down or slowed down due to COVID, we're running out of available cars." (5 Aug)
https://twitter.com/TheStalwart/status/1291110174879514628
I couldn’t care less about personal interaction with sleazy salesman and when buying new car I just need the right price, not the sales dance done in person and all this “let me talk to the manager” BS.
When salesman quotes me MSRP on my answer on the best deal - this is conversation over.
When they stop treating customers like idiots they’ll get more business and more sales.
I bought my last new car with price negotiated on the phone before even showing up at the dealer.
The hardball approach never worked for me. It's best to just know your max OTD (Out the door with taxes and fees) price and offer that.
[1] https://www.costcoauto.com
If it would - that typically is a great deal
In the end, I went round-robin with a few dealerships (taking one dealership's offer to another dealership and asking them to beat it), and wound up with a price around $1000 less than the Costco Auto price. I had to drive an hour to get the car, but that's no big deal in the long run.
So my two cents is that Costco Auto maybe hits a sweet spot between "don't want to negotiate" and "good price". But if you enjoy the thrill of the hunt, you can probably do better than the Costco Auto prices.
The dance is extremely annoying, though. I've leased 4 cars since 2011: 3 Mercedes and 1 Honda CR-V. I wanted to lease another CR-V, but the dealership reneged on the price so we just went back to our trusty sales rep at the Mercedes dealership who always comes back with something reasonable in a matter of hours--not especially low, but no B.S. and no pressure tactics. The Mercedes is of course more expensive, but after splurging the first time it's hard to stop the cycle given the customer experience.
I want to buy something to replace our 20-year-old Civic. Probably not a Mercedes, because of long-term costs, unless we buy over our current lease. But it's really no fun dealing with typical dealerships, and the good family cars (e.g. Telluride, CR-V, etc) are really popular and the dealerships know this.
I recently learned that there's a boutique car shopping consulting industry where you pay a few hundred dollars for someone to provide advice on models (including family haulers, not just high-end sports cars), and then to solicit and secure offers on your preferred models. I might try that next time around.
I can relate about the dance though. The popular Japanese imports last basically forever and the salespeople’s tactics aren’t great. I’ve said to myself more than a few times I’d get a Tesla so I could just get everything done in a web browser.
I can't recommend these services enough. I've never actually paid them anything upfront to search for cars, but many of them are semi-retired car enthusiasts from finance or tech who can afford to get used dealership licenses and start their own business. They'll help anyone but their inventory is well curated and often priced for velocity rather than profit maximization. They'll hang onto $100k classic to get the right price but will happily take a client's low mileage 201x Toyota as a low risk trade-in to get them into a the right Mercedes they want and then flip the Toyota a week later for a few thousand under blue book just because they've got limited parking space.
A nice side benefit is that most of these mom and pop dealers will sell you secondary warranties at cost, which was a big deal when I was a first time car buyer with a post-BMW acquisition Mini Cooper with a CVT but I drove that car into the ground so it wasn't a consideration the second time around.
Not having to deal with the dealership model and salesmen to get the price is a lot better.
I don’t think I’ll buy a different brand for the foreseeable future.
It worked surprisingly well, and cut a lot of the bullshit out.
That "talk to the manager" BS worked out in my favor the last time I bought a car. I had been leasing a Honda CR-V, for stupid reasons [1], and when that lease was up wanted to buy a new CR-V.
I found a dealer online about an hour or so away with a good price for online purchases. But I wanted to at least do a test drive of the new models first, to make sure Honda had not made any changes that would sour me on it.
I went to a nearby dealer to do a test drive, intending to tell them I was just looking. If I liked it I'd then buy from the online dealer.
After the drive, the salesman names a price. I told him that I knew that the dealer an hour away would sell it to me for $X, which was less than the price he offered, but if they could match that price I'd buy from them.
He does the "I'll have to talk to my manager" thing. The thing is, this was a new salesman, and I think he was nervous. I don't think he actually listened to the price I named.
He comes back, and announces a new price they will let me have it for...and that new price is quite a bit lower than $X. I'm not kidding...I told him what I was willing to pay for the car, and he came back with a lower counter-offer!
I took it, and am still driving that car 14 years later.
[1] I normally buy rather than lease, but leased a CR-V for two years to see if I liked that form factor. When that was up, I leased another one for two more years, followed by one for three years. It was only then that I remembered that I has stupidly forgotten that the plan was after the first lease was up to either buy a CR-V, or go back to small sedans.
You could look at it as no haggling (and no sleazy salesfolks), you could look at it as everybody pays MSRP or you could say everybody gets the same deal.
Well, it technically does but at high unacceptable interest rate
'I don't like how you treat me. This makes me uncomfortable. Drop this attitude or I will walk'
If they don't, just walk. There is no point going through it feeling uncomfortable. The whole point of buying stuff is to be pampered and comfortable.
This doesn't work on me but whenever i ignore, walking out or confronting them - my wife typically trying to scold me for not being nice to nice saleman.
Which means their technique works really well on gullible people.
Don;t tell that to your wife :D
And yes, they use it because it works.
But on me it has the opposite effect. The moment the salesman tries to help/advice me differently I get this creepy crawly feeling.
And I am a big boy now, so they cut it off or i am walking.
As introvert pleasing people so you can blend-in was my common go-to method. Any skillful salesman will walk all over you if you let them.
I soon learnt salesmen are not your friends, so I don't treat them like you owe them something.
I might have walk away from some good deals, but in my mind supporting an asshole by doing business with them only propagates that culture and behaviour. And I rather walk away then be part of it.
My point is that the pretend song-and-dance of current car buying is ridiculous and anti-consumer.
And lots of people don't have complex requirements for their vehicles. Size, color, type etc. Which could probably literally be managed via an Amazon-style listing.
(I'd link to the original on Edmunds.com, but it seems to be hopelessly borked with 404s all over the place.)