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If You're Getting Owned at The Dealership, You're Not Alone

jellis4148

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You know. I would love to take out negotiations. It doesn’t matter if we do $5,000 off msrp or $15,000. Someone always says we can do better. I have no problem showing a customer the invoice and showing them what net net is on the car, what the dealer actually pays. Most of the time we are very close to the net price. What drives me crazy is we had Silverado’s at $18,000 off of MSRP last year and I can’t tell you how many people called wanting another $2,000. You calf damn near give the car away and some people are going to offer less.
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daveprice7

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You’d be surprised how many people think that. Especially with the way they treat us sometimes. I e been selling cars for 22 years at the same store. I do make good money, but I also take care of my customers. Unfortunately I have to bite my tongue a lot, because they sometimes talk down to me like I’m lower than dirt. The best is when they roll on at closing and expect me to hang out for 2 hours to sell them a car. I do, but it sucks. Been there for 10 hours and have to hang out for two more. They don’t ask the pimples up kid to do that at Best Buy. His ass locks the door in their face, and they are fine with. If I did that I would get bad google review and a call to the owner. Explain that shit. Most of times attitudes change once they see I’m sincere, but some people are just assholes to me for no reason. Just trying to pay the bills and provide for my family just like they do when they go to work.
I don't understand the hostility towards car sales guys. I always treat the sales folks at car dealerships with respect; but I also never haggle or wander around a lot aimlessly browsing. I've come to the lot because I saw a specific vehicle on a website/advertisement for a price I am willing to pay. There's a 100% chance that if that price isn't a good deal, you'll never get me within spitting distance of a car dealership.
 

aldo98229

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Several manufacturers tried no-haggle pricing but it didn’t work. Saturn came the closest to success. But it turned out that over time, timid buyers congregated in Saturn dealers to get a hug and buy products that were as generic as you could find.

Correctly, dealers are not large enough to affect pricing on the manufacturers. The economist’s best case for the use of independent dealers is that demand and supply vary significantly from region to region, and small fluctuations on a $30,000 or $50,000 purchase can represent thousands of dollars gained or lost.

Dealer associations punch above their weight at state legislatures. Unfortunately, over the decades they have used this influence to pass laws that “protect” them from the almighty automaker, usually at the expense of the customer.

Some states are still notoriously pro-dealer —and against individual customers.

It used to be that the dealer had a monopoly on the flow of information. But the Internet changed the balance of power forever.

Tesla is the first manufacturer to be allowed to sell directly to consumers, but it is still banned in many states. Usually the same states that are in bed with dealers. But Tesla sells a rather homogeneous product to barely 2% of market. It will be interesting to see how the Tesla business model copes as it enters new segments and sales continue to grow.
 

Pegleg

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The customers who suffer most at dealers, IMHO, are those who have no idea of their finances and fair to bad credit and people who are upside down on their trade causing larger than expected payments.

When I bought my Wrangler last fall I had no trade (I decided I could do better selling the trade myself), pre-approved financing and money in the bank to write a check or get a bank check for the down payment. I knew ahead of time roughly what my payments would be based on MSRP, down payment etc. At that point in time it is simply a case of agreeing on price. No stupid 4 square games or anything like that.
 

oceanblue2019

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Dealers shouldn't exist, period...they are nothing more than middle men to me...I never service my car at a dealer, so other than marking up the car to sell it to me, what does a dealer do? Jeep.com should sell the car directly to consumer, especially since it would benefit the manufacturer and the consumer to have it that way...oh I forgot this is where people tell me, the jeep dealer mechanics are the experts and do the best work! My bad, my bad, wrong thread lol 😆
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xylodan

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If you annoy them enough in this current market they'll eventually give you a deal so that you get out of their hair. I didn't intentionally annoy the local dealerships when shopping for my current Jeep, but I also always seemed to get a nice discount off MSRP on my last two Jeeps so when it came down to throwing down the money and saying yes, I kept declining on finalizing the sale. Finally I reached a good combination of features and price, and after walking away from the dealership I got an email from the GM the following day who worked to do a little better than the previous day's offer and I was satisfied. Still didn't get the normal discount, but I also understand the market we're in so that was that.

I definitely understand some people's frustrations with dealerships. Some sales people are at best lazy and lack any knowledge and at worst are deceptive in just looking to say and do anything to convert a unit into a sale. Once the deal is done, they become dead to you, even on things they promised to do to earn the sale. Sadly, I'd say they are the norm and not the exception in my 25 years of history buying cars. When you do end up having a legitimate issue with a car, they will most often punt the problem all day long until you reach out to headquarters so that they get corporate to take the financial hit and avoid having a negative affect on their own profits. Just a sad reality that was put front and center to me after a bad experience with BMW a few months ago.
 

daveprice7

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Several manufacturers tried no-haggle pricing but it didn’t work.
...

It used to be that the dealer had a monopoly on the flow of information. But the Internet changed the balance of power forever.
...
No-haggle works OK if you wait until the dealer is desperate to move a vehicle that's been languishing on the lot!

It does kind of make you wonder why AutoTrader or something similar doesn't act as a middle-man to facilitate the purchase & delivery of vehicles from out-of-area dealers. I've seen deals on AutoTrader for vehicles around the country that have the options I want for enough of a discount to justify paying $2K or so for vehicle transport, but I didn't want to deal with the headache of coordinating all that it would involve... I came close though... Oh, Mojito, how I would have loved you.
 

bigbaozi

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I think people like to imagine those state franchise laws as protecting the little guy in town from the big bad wolf, but just grabbing off Wikipedia:

Sonic has > 100 dealerships
AutoNation > 360
Lithia > 257
Group 1 > 283

This whole thing with Tesla is mostly a bunch of other Fortune 500 companies trying to make sure the various state governments give them their cut, because they know there is money to be made.

The care and feeding of these various dealerships also make it really difficult for traditional manufacturers to compete with Tesla. Tesla has to pay for a service center or a store for you to take a test drive. Jeep has to fondle a lot of balls and make sure that the dealer can afford to operate a store and make enough money that he can go off at night and flirt with the women at the bar while his wife is asleep at the big house on the hill. All this money goes into the price of your car. It isn't efficient and it isn't very "free-market" in a country where a lot of people on social security spend a lot of time grandstanding about it.

It was a model that made more sense back when manufacturers didn't have the resources to build out nationwide sales / service networks on their own. But when dealers started to see their money was under threat, they started pushing state legislatures to force manufacturers to deal with them. And then we got stuck with this mess.

One of the smartest things Tesla ever did was using every trick in the book to avoid getting shouldered with a bunch of different dealers to keep happy.
 

gato

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Car dealers and real-estate brokers in an era when price discovery tools, on-line pictures/reviews/info, etc are readily available to customers are a huge source of frustration to customers in the buying process.

The buying process at Tesla, specially in the states that allow full direct purchases, is what the majority of consumers want.

Having said that, with Jeep and most other legacy brands we are forced to go through dealers. So the key is to find the right dealers and avoid the bad ones.

You need to "shop for a dealer" as much or more than "shop for a car".
 
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LooselyHeldPlans

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I've never met a car dealer who doesn't win and make money...only morons think they got a deal lol 😆
That's entirely relative. I paid $47 for my fully loaded (everything except body colored flares/top, leather, and steel bumpers) ‘20 JLUR as a custom order in September of ‘19. I'm pretty sure there wasn't another $500 to be saved anywhere in the world.

A few weeks ago one of the online places gave me a quote to buy for $53 with 20k miles.
 

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Beaching631

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Dealers shouldn't exist, period...they are nothing more than middle men to me...I never service my car at a dealer, so other than marking up the car to sell it to me, what does a dealer do? Jeep.com should sell the car directly to consumer, especially since it would benefit the manufacturer and the consumer to have it that way...oh I forgot this is where people tell me, the jeep dealer mechanics are the experts and do the best work! My bad, my bad, wrong thread lol 😆
Manufacturers always tout their dealer-service network as being important to the consumer. And yes, service is important issues within the warranty time frame. But I don't understand why manufacturers don't get rid of the dealerships sales-end. they could just split the dealership's profit share of the sale 50-50 (they'll probably get greedy and go 80-20 though) and sell direct to the customer. Some company is going to try it at some point.
 

oceanblue2019

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Wonder what kind of problems were going to see with all the rushed chips.
You can't rush chips - that's the issue.

The fabs were all shut down which is the worst thing you can do next to a flood or earthquake exposure. It takes time to get them running again once shut down to get a stable process back in place, and once running the rate of production is very fixed without the ability to expand easily.

Waffers take time. Access to the lithography systems takes time. Cutting and packaging takes time. All of these steps count on manufacturing equipment that costs billions to setup a chip fab, takes 18+ months to get, and takes 12+ months to get up an running and reliably producing chips.

It shows how exposed the world is to what amounts to a handful of fabs that impact anything with a chip in them.

Trump and now Biden are trying to get more of these fabs built in the US which would be great for our self-sufficiency.
 

csjlu

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Manufacturers always tout their dealer-service network as being important to the consumer. And yes, service is important issues within the warranty time frame. But I don't understand why manufacturers don't get rid of the dealerships sales-end. they could just split the dealership's profit share of the sale 50-50 (they'll probably get greedy and go 80-20 though) and sell direct to the customer. Some company is going to try it at some point.
Direct to consumer sales is a predominant investment theme for me. Apple, Nike, Vans / North Face and a gaggle of upstarts have seen their values skyrocket as they took back their distribution from mediocre wholesalers and drove a greater mix of DTC revenues. It allows for higher margins once a certain scale is reached, and yields better consumer data that can inform strategic decision making and lock customers in. If you want to see how important DTC revenue is to investors, take Tesla’s market cap and subtract from it the market cap of every other publicly traded car manufacturer. Some of that premium is favorable labor relations, some of it is leading edge product, but a lot of it is direct distribution.
 

csjlu

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Nope. But common sense tells you corners are being cut right now. That’s how business operates under pressure. Of course they’ll never admit to it though.
Actually they did admit it. They decided to delay production of new chips and concede market share losses to competitors, rather than produce low quality chips.

Semi production is different these days. Foundries have the leading edge process technology. Licensed IP means chip customers can switch providers if output is poor. Nobody is captive anymore. Market share losses are fast and real for bad semi output…just ask any Intel shareholder, during the most steroidal bull market of all time.
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