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fwiw, fine wine (the ones over $20 sold in wine shops) is actually vary similar to car sales in that the distribution is protected by franchises & industry-sanctioned legislation. Because of blue laws from Prohibition, many states don't allow consumers to buy wine online or even for discounters to bypass the authorized 3-tier wholesale network. The consequence is the price of a bottle is fairly uniform from store to store in "protected" states, varying by only a few dollars. If a large shop with lower margins wanted to under-price their competitors they could actually be penalized by their distributor and find their allocation cut.
The only difference when shopping for a car is that consumers don't know upfront whether they're being screwed. It's that uncertainty and the feeling that certain other customers get preferential treatment (i.e. a lower price) that turns off buyers.
It's very easy to find out exactly what a car costs these days. Fortunatly most dealers also have a sales person dedicated to internet sales. Using these tools you can work several dealers at the same time until you get a price you are happy with.
I buy a lot of cars and every deal I've done in the last 5 yrs has been this way. I do my homework, find my options then contact the dealers with an exact list of options and a price i'm going to pay. If they accept then I buy from them. If they deny then I move on to the next. Pretty simple.
It's very easy to find out exactly what a car costs these days. Fortunatly most dealers also have a sales person dedicated to internet sales. Using these tools you can work several dealers at the same time until you get a price you are happy with.
I buy a lot of cars and every deal I've done in the last 5 yrs has been this way. I do my homework, find my options then contact the dealers with an exact list of options and a price i'm going to pay. If they accept then I buy from them. If they deny then I move on to the next. Pretty simple.
I suppose there are folks that don't mind investing the time to study prices, options, figure out dealer costs. Seems that this could be quite an undertaking for the average consumer that just wants to buy a car. I applaud those that are able to get a smoking deal on a new car, but it seems a little ridiculous that one has to go through this stand-off mentality to get what they want.
Going back to buying something from a normal retail store, I can see a situation where I might ask for a better deal. If I needed to buy a few cases of wine, maybe 24 bottles for a party or event, I might ask the manager if they can cut me a little better deal. Buying in quantity is usually justified to ask for a lower price.
TrueCar used to be good for that maybe a year ago. Honda in particular went to war and won. Now it's just like another other car buying service (CostCo or what have you). At some level it's still useful. It's the absolute most you should pay for a car, which if you suck at negotiate may still be a good deal. If you're good, you can easily beat it however. The best source of information is forums and seeing what actual people paid, but that's not available for everything and even when it is, it's a lot of research time which was why TrueCar was so nice. Oh, well. Man's got to eat, I can't fault him in that.
fwiw, fine wine (the ones over $20 sold in wine shops) is actually vary similar to car sales in that the distribution is protected by franchises & industry-sanctioned legislation. Because of blue laws from Prohibition, many states don't allow consumers to buy wine online or even for discounters to bypass the authorized 3-tier wholesale network. The consequence is the price of a bottle is fairly uniform from store to store in "protected" states, varying by only a few dollars. If a large shop with lower margins wanted to under-price their competitors they could actually be penalized by their distributor and find their allocation cut.
The only difference when shopping for a car is that consumers don't know upfront whether they're being screwed. It's that uncertainty and the feeling that certain other customers get preferential treatment (i.e. a lower price) that turns off buyers.
Like rental car lots. I think everyone (business majors) know a few people that ended up working for Enterprise. It's pretty fascinating. They buy a car, run it for a year or two, and then turn around and get at least within about a grand of what they paid for it, and often times less than that, on the used car market.
For example, '12 Prius with 26k miles. No-hassle TrueCar buying service you can get it for $23,000. Enterprise will sell you the year old one for $22. If you're any good at haggling, there's room to go under that $23,000 as well since TrueCar charges a fee to the dealer.
I agree, it would be very nice if everyone paid the same price for new cars. You just picked which dealer you liked and where to service your vehicle. CarMax should get into the new car business.
It's hilarious how the sales guy will go back and forth to the sales manager with each offer. Then they have you sign a piece of a paper saying you will buy the car if he agrees to it. LOL. I always just say let me talk to the wizard behind the curtain and save me a hour of my time.
It's hilarious how the sales guy will go back and forth to the sales manager with each offer. Then they have you sign a piece of a paper saying you will buy the car if he agrees to it. LOL. I always just say let me talk to the wizard behind the curtain and save me a hour of my time.
They played that game when my wife and I bought her Explorer. The guy was there that was in all the local commercials, I guess he was supposed to "wow" us... being a TV commercial star and all. My wife was ready to walk out, the whole process was exhausting. Think we spent over 3 hours at the dealership that day.
I agree, it would be very nice if everyone paid the same price for new cars. You just picked which dealer you liked and where to service your vehicle. CarMax should get into the new car business.
It's hilarious how the sales guy will go back and forth to the sales manager with each offer. Then they have you sign a piece of a paper saying you will buy the car if he agrees to it. LOL. I always just say let me talk to the wizard behind the curtain and save me a hour of my time.
Cm is in the new car business for some manufacturers, in some areas:
I think what OP and others are overlooking as that it's none of your business what a car dealer, or any other retailer, pays for their products. Even if you do know, that makes not one tiny bit of difference as to what the selling price should be. I've had people tell me they knew what my cost was on the products I used to sell, then demand a lower selling price from me. I told all of them that them knowing did not change the profit I needed/wanted to make. They are not qualified or entitled to decide what that profit should be. If they don't like the price I offer, they need to find another seller who will lower their price. Negotiation is one thing, but it MUST be a win-win situation. People have forgotten that business was done this way for thousands of years. Now it's all about trying to screw the other party out of everything for many people.
I have a buddy who trades a car every two years. He always tells me he screwed the dealer, and I just laugh. He doesn't understand that the dealer won't make a deal they can't make money on, plus his attitude of feeling he needs to win is just silly.
They played that game when my wife and I bought her Explorer. The guy was there that was in all the local commercials, I guess he was supposed to "wow" us... being a TV commercial star and all. My wife was ready to walk out, the whole process was exhausting. Think we spent over 3 hours at the dealership that day.
Maybe you shouldn't have allowed that to happen. The last new car I bought was wrapped up in less than an hour and a half from the time I set foot on the lot to when I left, and I felt even that was unnecessarily long.
I think what OP and others are overlooking as that it's none of your business what a car dealer, or any other retailer, pays for their products. Even if you do know, that makes not one tiny bit of difference as to what the selling price should be. I've had people tell me they knew what my cost was on the products I used to sell, then demand a lower selling price from me. I told all of them that them knowing did not change the profit I needed/wanted to make. They are not qualified or entitled to decide what that profit should be. If they don't like the price I offer, they need to find another seller who will lower their price. Negotiation is one thing, but it MUST be a win-win situation. People have forgotten that business was done this way for thousands of years. Now it's all about trying to screw the other party out of everything for many people.
Totally understand that the dealer has to make a profit/pay for overhead and I am all for paying a good commission to a salesman that does an outstanding job. The original point was that the MSRP price is usually thousands off from the actual price the dealer paid from the manufacturer. For an identical car, they might make $5k profit on one person and $500 profit on another.
It just seems to me that the system is stacked against the ordinary consumer who just wants a new car. The end price paid is significantly lower for someone who negotiated versus someone who didn't. I'm sure a dealer might knock off a little to the unsuspecting buyer to make them think they got a good deal. Or, give them a "better" price on their trade, but not budge from msrp.
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